Interesting story about a news broadcast yesterday–CNBC anchor implies US must support dictators to keep cheap oil flowing.
The recent political conflicts in North Africa seem to have prompted the story, especially the ongoing protests in Egypt. If the conflicts continue and spread to the Middle East, commentators claim that possible regime changes in places lie Saudi Arabia could send oil prices soaring to very high levels.
This is interesting to me because Americans now seem willing to admit that economics is more important to US politics than political ideals of democracy and freedom. For a long time, America has supported non-democratic monarchies because American companies–especially the oil companies–have business interests there. Simply put, supporting big business is much more important to the US government than the ideals on which the country was supposedly founded.
“One more thing,” Burnett remarked. “If this spreads, the United States could take a huge hit because democracy in a place like Saudi Arabia, you’ve talked about who might come in power, what that means for oil prices. They’re going to go stratospheric.”
“There’s no doubt about it,’ MSNBC host Joe Scarborough said. “No doubt about it!”
News from the US: President Obama’s suggestion that the federal government should freeze spending has been well received by the financial markets and exchange markets.
The U.S. dollar held near a 10-week low against a basket of currencies on Wednesday ahead of a statement from the U.S. Federal Reserve, which is expected to reaffirm the central bank’s focus on supporting growth.U.S. stock index futures ticked higher after President Barack Obama delivered the annual State of the Union address, pointing to a modestly firmer opening on Wall Street on Wednesday.
Obama proposed a freeze on domestic spending over the next five years to help reduce the national deficit but analysts said the speech provided no surprises.
The idea is to minimize the deficit, which will allow–without fear of inflation–some expansion of money supplies, which–among other things–will keep the value of the dollar low against other currencies and encourage exports out of the US.
All a good idea for the US, but probably not realistic politically. Government spending in the US is decided by Congress, not the Executive branch, and I do not think Congress has the ability to freeze spending levels.
We will see, but I think we will see a reversal in policy.
With apologies to my students and other readers, I am happy to let you know that I have finally found a reliable path around the Chinese block of this site.
New posts will begin again in short time.