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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: ChinuSFO who wrote (24934)	6/28/2008 5:03:10 PM
From: tejek	Respond to of 149317

Can any Chinese walk up to a GM dealership in China and buy a car like the Americans do? I thought private ownership in China continues to be regulated I don't think so......I think they buy cars like we buy cars......you walk into a dealer. This article talks about a Chinese family buying a car and then sums up what China is all about in terms of its economic system.....its sounds a lot like the US: With payments from the local health insurance fund capped at $4,300 a person per year, Mr. Li has had to sell many of his possessions, and still he has had to go into debt. He wore a cap to the family dinner this week, self-conscious about the loss of his hair from chemotherapy. In two weeks, he will go to a leading hospital in Shanghai for more surgery, a five-hour drive to the north, followed by two more rounds of chemotherapy. But he will not be going in the family car: he sold it for nearly $8,000 last year to help cover his medical expenses. It is a common occurrence in this country, nominally communist, but with little or no safety net. While many families are scrambling into the middle class and buying cars, others are falling out of the middle class because of business reversals, medical bills or other problems, and are unable to buy replacements for their first car." nytimes.com

To: ChinuSFO who wrote (24934)	6/28/2008 8:39:15 PM
From: tejek	Read Replies (1) \| Respond to of 149317

Krugman actually refutes the whole issue of speculation in oil by comparing it to the increasing price of iron ore. ;-) Fuels on the Hill By PAUL KRUGMAN Published: June 27, 2008 Congress has always had a soft spot for “experts” who tell members what they want to hear, whether it’s supply-side economists declaring that tax cuts increase revenue or climate-change skeptics insisting that global warming is a myth. Right now, the welcome mat is out for analysts who claim that out-of-control speculators are responsible for $4-a-gallon gas. Back in May, Michael Masters, a hedge fund manager, made a big splash when he told a Senate committee that speculation is the main cause of rising prices for oil and other raw materials. He presented charts showing the growth of the oil futures market, in which investors buy and sell promises to deliver oil at a later date, and claimed that “the increase in demand from index speculators” — his term for institutional investors who buy commodity futures — “is almost equal to the increase in demand from China.” Many economists scoffed: Mr. Masters was making the bizarre claim that betting on a higher price of oil — for that is what it means to buy a futures contract — is equivalent to actually burning the stuff. But members of Congress liked what they heard, and since that testimony much of Capitol Hill has jumped on the blame-the-speculators bandwagon. Somewhat surprisingly, Republicans have been at least as willing as Democrats to denounce evil speculators. But it turns out that conservative faith in free markets somehow evaporates when it comes to oil. For example, National Review has been publishing articles blaming speculators for high oil prices for years, ever since the price passed $50 a barrel. And it was John McCain, not Barack Obama, who recently said this: “While a few reckless speculators are counting their paper profits, most Americans are coming up on the short end — using more and more of their hard-earned paychecks to buy gas.” Why are politicians so eager to pin the blame for oil prices on speculators? Because it lets them believe that we don’t have to adapt to a world of expensive gas. Indeed, this past Monday Mr. Masters assured a House subcommittee that a return to the days of cheap oil is more or less there for the asking. If Congress passed legislation restricting speculation, he said, gasoline prices would fall almost 50 percent in a matter of weeks. O.K., let’s talk about the reality. Is speculation playing a role in high oil prices? It’s not out of the question. Economists were right to scoff at Mr. Masters — buying a futures contract doesn’t directly reduce the supply of oil to consumers — but under some circumstances, speculation in the oil futures market can indirectly raise prices, encouraging producers and other players to hoard oil rather than making it available for use. Whether that’s happening now is a subject of highly technical dispute. (Readers who want to wonk themselves out can go to my blog, krugman.blogs.nytimes.com, and follow the links.) Suffice it to say that some economists, myself included, make much of the fact that the usual telltale signs of a speculative price boom are missing. But other economists argue, in effect, that absence of evidence isn’t solid evidence of absence. What about those who argue that speculative excess is the only way to explain the speed with which oil prices have risen? Well, I have two words for them: iron ore. You see, iron ore isn’t traded on a global exchange; its price is set in direct deals between producers and consumers. So there’s no easy way to speculate on ore prices. Yet the price of iron ore, like that of oil, has surged over the past year. In particular, the price Chinese steel makers pay to Australian mines has just jumped 96 percent. This suggests that growing demand from emerging economies, not speculation, is the real story behind rising prices of raw materials, oil included. In any case, one thing is clear: the hyperventilation over oil-market speculation is distracting us from the real issues. Regulating futures markets more tightly isn’t a bad idea, but it won’t bring back the days of cheap oil. Nothing will. Oil prices will fluctuate in the coming years — I wouldn’t be surprised if they slip for a while as consumers drive less, switch to more fuel-efficient cars, and so on — but the long-term trend is surely up. Most of the adjustment to higher oil prices will take place through private initiative, but the government can help the private sector in a variety of ways, such as helping develop alternative-energy technologies and new methods of conservation and expanding the availability of public transit. But we won’t have even the beginnings of a rational energy policy if we listen to people who assure us that we can just wish high oil prices away. nytimes.com