Here's the framework I would propose for answering the question of how much the price of oil should have risen since 2005-- the price of oil needed to go up by whatever it took to persuade places like the U.S., Europe, and Japan to reduce their consumption by the amount that China, the newly industrialized countries, and oil-producing countries were increasing theirs.
Lawrence Summers (one of Clinton's Treasury Secretaries) is advising Barack Obama on the economy (according to Obama himself on this week's Meet the Press). He has an op-ed in the Washington Post and the Financial Times which fleshes out the feeling that one gets from blogs that current bail-out is a stop-gap measure and seems to obliquely suggest that it will eventually be necessary to nationalise Fannie Mae and Freddie Mac.
In this scenario, the government would operate the GSEs as public corporations for several years. They would then be in a position to extend credit where appropriate to support resolution of the housing crisis. Once the crisis has passed, the federal government would divide their functions into government and private components, the latter of which would be sold off in multiple pieces. The proceeds could be used to fund the low-income housing support activity that was previously mandated to the GSEs.
The McCain campaign continues to look like a pack of chumps. Every single story seems to be about who is in who is out, how they are operating. Everyone out of the campaign seems to think that it is "dimishing John McCain" and one has to agree. Tonight's WP for example. Obama's superior campaign message and discipline was the story of the primaries, how is it that the Republican campaign could not get its act together in the months when no one was paying attention?
The most interesting of the many McCain process stories concern the foreign policy clashes between the neoconservatives and the realists advising him. This NYT story covers the cast of characters. It should be interesting to New Zealanders (and not a little ironic) that McCain appears to have adopted the realist view on nuclear disarmament, which is currently that it would be a good thing.
Mr. McCain’s advisers were divided, for example, over a speech he gave on nuclear security policy in Denver in May. Two Republican pragmatists who advise Mr. McCain, the former secretaries of state Henry A. Kissinger and George P. Shultz, supported a call in the speech for a nuclear-free world, an idea they endorse as part of a “Gang of Four” of national security statesmen. But other McCain advisers, including John F. Lehman, a former Navy secretary, and Fred C. Ikle, a defense official in the Reagan administration, were opposed to the idea because, in their view, nuclear weapons act as a deterrent against an attack on the United States and its allies. In the end, Mr. Lehman said, Mr. McCain made the call in favor of a nuclear-free world.
“He wanted to do it,” Mr. Lehman said. “That position is McCain’s position. It’s not a cabal of Kissingerites or a cabal of neo-cons.”
But some of Mr. McCain’s pragmatist advisers remain uneasy that conservatives close to Mr. McCain — among them Mr. Scheunemann and Robert Kagan, a scholar at the Carnegie Endowment for International Peace — will help him mold a more bellicose message than they would like on Iran and its threat to Israel, particularly at a time when there is widespread speculation in the Israeli news media that Israeli may bomb Iran’s nuclear facilities.
Some more specific discussion of who might be involved in a McCain administration can be gleaned from this account in the Washington Note
Democrat Brzezinski said he worried that under a McCain Administration, a Secretary of State Lieberman, or Secretary of Defense Giuliani might jump at the use of force against Iran, but that a Secretary of State or Defense Armitage "may be different".
On that, Scowcroft smiled his best enigmatic smile and studied the ceiling tiles...
A Secretary of State or Defense Armitage would be very good for Australia and New Zealand. I prefer not to speculate on what "Secretary of Defense Giuliani" would get up to.
In case you have been wondering why Obama keeps praising Bush Snr's foreign policy, it's clearly to achieve the silence of these old Republican realists
At CSIS today, Republican Scowcroft (who has rather pointedly not endorsed anyone so far this year)
Oh and if you are interested in the realist case for nuclear disarmament it is here. We seem likely to hear a lot more about it whoever is the next US president.
To my shame, the first time I heard Dick Cheney say that we will have to spend time "on the dark side, time in the shadows", or words to that effect, I didn't think much of it. I spent the early part of the decade living in the United States and we all went a little crazy after 9/11. Anyway go read New Yorker staff writer Jane Mayer's book the Dark Side, discussed here. The video inteview here is an hour long but worth every minute.
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