terça-feira, 11 de março de 2008

The Triumph of OPEC

"Look no further than last week's OPEC meeting in Vienna. Oil ministers declined to increase production despite a fairly obvious case for doing so. Not only were oil prices fluttering just above $100 a barrel, but the United States is either in or near a reces­sion and much of the rest of the world faces a noticeable econom­ic slowdown. The OPEC ministers were unmoved. Indeed, they indicated that they might actually reduce production if weak de­mand—presumably reflecting weak economies—threatens to de­press prices. Not good.

What's wrong is that a fall of oil prices is one of the mecha­nisms by which a recession or economic slowdown corrects itself. Lower prices for gasoline, home heating oil and diesel fuel improve consumer purchasing power. They muffle inflation and in­crease confidence. In this sense, they're an important "automatic stabilizer" for a faltering economy. If the automatic stabilizer is disarmed—or, worse, transformed into an automatic "destabiliz­er"—then the slowdown or recession may get worse."

Robert J. Samuelson, In Newsweek

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