Bina on Iraq

Doug Henwood dhenwood at panix.com
Thu Feb 20 04:59:31 PST 2003


budge wrote:


>What I want to know, and I am surely no economist, what does
>the price of oil have to do with the US ecenomy when
>consumers in the US pay oh (guessing now) about 1/4 of what
>anybody else pays for it, including residents of producing
>nations (Nigeria comes to mind, more that the EU in my
>perspective).

The level of prices doesn't have much effect, but changes do. When oil prices collapsed in 1986, it helped extend the 1980s boom; when they rose a few years ago, it helped end the 1990s boom.


>profound 'economic decline'? At least relatively speaking?

Current account deficit is one candidate - it's big and chronic. But there's a difference between a problem and profound decline. It's a problem now, though it could cross the border into profundity. But we're not there yet.

Doug



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