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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (45637)	5/19/2004 11:18:37 PM
From: LindyBill	Respond to of 793813

The "Times" backs Bush on the SPR. Hey, does that mean we are doing the wrong thing? May 19, 2004 Gasoline Hysteria With the election season moving into full swing as Americans start thinking about their summer travel plans, it's sadly predictable that politicians will try to curry favor with voters by playing silly blame games and proposing simplistic quick fixes for rising gasoline prices, which are averaging more than $2 a gallon. A case in point is the demand made yesterday by 20 Senate Democrats that the government release as much as 60 million barrels of oil from the Strategic Petroleum Reserve over the next two months. President Bush is rightly resisting the call. Since 9/11, the administration has been adding to the reserve in a disciplined manner, and it is closing in on its goal of filling up the reserve's capacity, 700 million barrels. Tapping the reserve to assuage motorists at a time of increasing security threats to already tight fuel supplies would be foolish. As the energy secretary, Spencer Abraham, correctly noted yesterday, "The reserve is not there to simply try to change prices." In fact, the law calls for it to be tapped only in the event of supply disruptions. And even if Washington wanted to alleviate rising fuel costs, the reserve is not a very effective instrument for doing so, as President Bill Clinton learned in the fall of 2000. Experts estimate that at most, turning on the spigot now would knock only a few cents off a gallon. Senator John Kerry, the presumptive Democratic presidential nominee, knows this, of course, and he demeans the seriousness of his own candidacy when he suggests that President Bush could single-handedly bring down fuel costs. Senator Kerry has urged the administration to stop buying oil for the reserve, as if that would make a difference. Fortunately, some residue of shame has kept him from joining the other Democrats calling for the reserve to be raided. The government's oil purchases have taken place at a time of higher prices, but they are not a major cause of the increase. The real culprit behind rising energy costs is the roaring demand from growing economies, especially China's and the United States', though the volatile situation in the Middle East does seem to add a risk premium. Most of China's energy demand is for industrialization, which, in turn, contributes to the global economic recovery. In contrast, roughly half of the United States' petroleum demand is for personal consumption, primarily for cars, trucks and S.U.V.'s, a situation that, in turn, makes the nation ever more dependent on an increasingly endangered supply of foreign oil. If $2-per-gallon sticker shock slowed sales of Hummers — which get about 11 miles per gallon — that would hardly qualify as a national tragedy. Still, even Americans who don't drive gas-guzzling S.U.V.'s are feeling pain at the pump, and responsible political leaders have to prepare the public for this new reality. No comprehensive energy policy should overlook long-term means of encouraging conservation and minimizing our dependence on oil from the Persian Gulf region. Rather than pretending that there are facile switch-flipping fixes, Senator Kerry should be talking about bolstering conservation efforts and fuel economy standards, and encouraging new investment in refining capacity. In the meantime, we all need to keep the shrill hyperbole about "record high" oil prices in perspective. A barrel of oil now costs more than $40, but when adjusted for inflation, that price is less alarming. During past spikes, oil has cost well over twice that amount in today's dollars. Yes, high fuel costs could ultimately endanger the economic recovery, but there is no reason to believe that they will do so at this level. Copyright 2004 The New York Times Company

To: LindyBill who wrote (45637)	5/19/2004 11:42:17 PM
From: kumar	Read Replies (1) \| Respond to of 793813

Hard to tell. Theres good news and "not so good" news. Good news is that a member of the Gandhi (not to be confused with MK Gandhi) clan declined a top job. That is unheard of. The nominated new PM is known for industrial and market reforms, and to be a better partner in the global economy. Time will tell. Not so good news is the volatility in the indian stock markets. A week should see that stabilize. Thats my 2 bits from Down Under (its winter here and the daytime temp is in the mid-70s!).