What are the implications of that, beyond the effect that having that price stick might have?
Krugman says, that among other things, as this 2008 presidential campaign is unfolding, "we’re having the wrong discussion about foreign policy."
As he puts it:
Almost all the foreign policy talk in this presidential campaign has been motivated, one way or another, by 9/11 and the war in Iraq. Yet it’s a very good bet that the biggest foreign policy issues for the next president will involve the Far East rather than the Middle East. In particular, the crucial questions are likely to involve the consequences of China’s economic growth.Krugman's argument is, I believe, right on target. We have to have a rational discussion about how we deal with China's economic growth, which finds the nation absorbing increasing amounts of global resources, all the while its government represses millions and menaces others.
Turn to any of several major concerns now facing America, and in each case it’s startling how large a role China plays.
Start with the soaring price of oil. Unlike the oil crises that followed the Yom Kippur War and the overthrow of the shah of Iran, this crisis wasn’t caused by events in the Middle East that disrupted world oil supply. Instead, it had its roots in Asia.
It’s true that the global supply of oil has been growing sluggishly, mainly because the world is, bit by bit, running out of the stuff: big oil discoveries have become rare, and when oil is found, it’s harder to get at. But the reason oil supply hasn’t been able to keep up with demand is surging oil consumption in newly industrializing economies — above all, in China.
Even now, China accounts for about only 9 percent of the world’s demand for oil. But because China’s oil demand has been rising along with its economy, in recent years China has been responsible for about a third of the growth in world oil consumption.
As a result, oil at $100 a barrel is, in large part, a made-in-China phenomenon.
For some time, I have been arguing that over the long haul, China is a greater threat to the peace and security of the United States--and of the world, particularly of Asia--than the radical jihadists. The jihadists, like all violent fringe groups will, eventually, burn themselves out, wear out their welcomes, or be co-opted. This doesn't mean that the US and the rest of the civilized world shouldn't deal with these thugs. But their movement simply doesn't have historical "legs." China--or, more accurately, the government of China--poses a more long term and a much bigger threat than the jihadists.
This is true even if the intentions of the government in Beijing are as benign as Krugman apparently believes them to be, that their only interest is in economic growth.
Krugman apparently ascribes no malevolence to the regime there. To take such a view means, I believe, overlooking the alarming growth of the Chinese military, the continued commitment of the government to repressing any movement toward democracy, and the continued menacing rhetoric regarding Taiwan. The Beijing government, I believe, is trying to use the country's remarkable economic growth to buy off a nation starved for the stuff of Western prosperity, gaining the population's acceptance of repression in exchange for HDTVs and cars.
Whatever Beijing's intentions, the country's growth, often at the expense of the environment, the safety of its products, and the economy of countries like the United States, poses a huge threat to this nation's economic and military security.
It deserves to be discussed in the presidential campaign.
But will it be?
[Of course, the US itself uses a disproportionate amount of the world's resources and needs to find ways to beat its addiction to oil. That too, is a topic worthy of more discussion in this presidential campaign.]
For more on the Chinese government's threat to the peace and security of the US and the world, go here, here, here, here, here, here, here, here, and here.