Even the wealthy are feeling the pinch of $4 a gallon gas.
Paying for gasoline easily tops the list of economic woes facing families in the United States, according to a survey on how changes in the economy have affected people's lives.
In America, drivers are fuming and politicians are demanding explanations because gasoline has hit about $3.50 per gallon. That's less than half the price being paid by motorists in most industrialized countries. High to us is low to them. Then there are the oil refiners. Relative to the $120 price of crude, $3.50 for gasoline is so cheap that their margins have virtually disappeared. So "high" in Cambridge, Massachusetts and Oxford, Mississippi is "low" in similarly named cities in the UK, and "high" for motorists is "low" for refiners. It depends where you live, and at which point in the supply chain you find yourself.
But assume that prices are "high", which indeed they are by historic standards. We are mistaken when we think these "high" prices are causing inflation. High oil prices can force consumers to spend more on gasoline and heating oil, at the expense of other purchases. Ask any suffering restaurateur or clothes retailer if you doubt that. But high oil prices can't trigger a rise in the general price level -- inflation -- unless someone pumps money into the economy so that, to use an oldie but goodie from the economists' lexicon, there is more money chasing the same amount of goods.
If you want something to blame for inflation, don't look at oil prices, look at the billions the Federal Reserve Board's monetary policy gurus and their confederates at the U.S. Treasury are pouring into the economic system. The cost to taxpayers of saving the financial services sector from ruin is not only making good any collateral the Fed has accepted that might prove worthless, but the run-up in the rate of inflation.
High gas prices are not an economic or political problem. They are the result of the natural workings of markets. There is nothing wrong with the market -- and no reason, other than self-preservation and the false appearance of being able to do something, for politicians to intervene. Supplies are decreasing -- both temporarily through unexpected refinery shut-downs and permanently through stock depletion.
Demand is increasing -- both in the U.S. and worldwide. Both of these will cause gas prices to rise and that's good. If gas prices don't rise, we will consume gas even faster and run out sooner. Higher gas prices encourage conservation and encourage investment in alternatives. High gas prices might be uncomfortable while we search for viable long-term solutions, but they're more comfortable than the alternative: no gas and no solutions.
Barack Obama faces the press and denounces his former pastor, Jeremiah Wright.
Barack Obama probably thought that Jeremiah Wright would try to fade from the scene. Instead, Obama's former pastor spent recent days making increasingly strident racial remarks in increasingly public venues. And so, on Tuesday afternoon, Obama did what he had to do to contain the damage: He repudiated Wright.
It seems one reason both Wright and Obama are in this mess is they share a way of thinking about themselves and their respective projects. Obama expressly said that Wright represents the "black community." Wright says an attack on him is an attack on the "black Church." Obama often suggests that a vote for him is a vote for "change" and for moving beyond division and discord and all bad things. And while he's wisely refrained from expressly saying that his skin color is the medium of exchange for this grand world-historical purchase, that's certainly been the subtext for him and the plain text for many of his supporters.
The problem with this sort of thing is that people aren't abstractions, they cannot in fact "personify" anything, not really.
I thought Obama handled the latest Wright flap admirably. He put distance between himself and Wright. Now the big question. Does this make any difference to Obama's crtiics?
Frankly, I expect new themes of criticism. One started on Fox last night when one commentator suggested Obama orchestrated the latest flap, presumably so he could respond. Another trumped up theme will be that Obama wasn't angry enough and didn't go far enough --- whatever that means. Expect calls for him to leave the church where Wright no longer is pastor. And if he does that, look for the bar to move one more time to ask him to do somethng else.
By all accounts, the press conference, like Obama's race speech a month earlier, reflected Obama. Strategists would never have advised the race speech and might have advised more outward anger toward Wright. What we got from Obama is what we've seen this entire campaign... a measured speaker who gets his point across without arrogance. That's poise, not weakness.
Can they debate without a moderator?
They've already debated 21 times, but Hillary Clinton wants one more crack at Barack Obama -- this time, though, without the modern encumberances of network anchors running the show.
We have all become used to candidates appearing at events where the audience is made up of ideologically sympathetic supporters. Most candidates for president know all too well how to get cheers of approval from their bases with well delivered poll-tested partisan talking points. However, it would be a different situation entirely if candidates had to consistently appear in front of people who are not inclined to be in agreement with them. Add to that, someone from the other party who will challenge their positions, then add to that someone from the media who knows how to cut through the rhetoric. Now, that is a much more substantial challenge and one likely to produce a much better quality of meaningful dialogue about how to meet the many challenges facing the country.
Such a level of meaningful exchange is critical to our democratic process. First and most importantly, it requires candidates to know what they stand for. A candidate must know more than talking points; he or she must know the substance of the material. They must be able to draw on historical parallels to support their arguments. They must know the audience and understand something about their worldview in order to relate to them. Candidates must be clear. They must provide real solutions to our challenges. But even all of that is not nearly enough. They must persuade.
Persuasion is what counts in a free society. If you cannot persuade, you cannot succeed in solving America's challenges because in the end, the American people must support your solutions or nothing can get done. It's time for a new model.
I understand the Obama campaign's decision to refuse more media-driven debates before the North Carolina primaries. The last one was an unenlightening debacle, and a distraction from the issues of the race.
But now the Clinton campaign is challenging Obama to unmediated, Lincoln-Douglas style debates. I'd certainly watch. And though it's easy to forget, Obama and Clinton actually look great when talking about real issues in a serious way. If both campaigns actually decided to run out the rest of the primaries in serious, respectful debates, I'd feel a lot more sanguine about the race's impact on the Democratic Party. I doubt there's anywhere near the level of trust between the two camps necessary to make this happen, but a wonk can dream.
