From: Barbara Lamar (blamar@satx.rr.com)
Date: Sun Mar 02 2003 - 09:19:28 MST
Last week I posted a comment on the vulnerability of the U.S. (and world)
economy to increases in the price of oil. A couple of people seemed to
disagree with this; one person even claimed that the U.S. economy is
presently "in good shape."
I didn't have time to respond last week, and I don't have time for a lengthy
post today. I'll let David Leonhardt of the NYTimes speak for me.
Excerpt from today's paper:
============================
http://www.nytimes.com/2003/03/02/business/02ECON.html?th
Oil Price Jump Adds to Jitters Over Economy
The most common cause of recessions, a surge in oil prices, is again
afflicting the global economy.
Just as they have before every American downturn over the last 40 years,
energy costs have risen significantly in the last year, capped by a sharp
spike since December.
[...]
"The economy is extremely fragile," said Mark M. Zandi, the chief economist
at Economy.com, a research company in West Chester, Pa. "We've got some real
problems if this drags on for any length of time."
[...]
"The single best cyclical indicator for the world economy is the price of
oil," said Andrew J. Oswald, an economist at the University of Warwick
outside Coventry, England. "Nothing moves in the world economy without oil
in there somewhere."
[...]
In 1991, oil prices fell almost as soon as the United States attacked Iraq,
and many economists think the same could happen this year.
============================
Barbara Lamar
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