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Wednesday, February 27, 2008

NEW YORK TIMES: Gas Prices Soar, Posing a Threat to Family Budget

Gas Prices Soar, Posing a Threat to Family Budget

David Ahntholz for The New York Times

Phyllis Berry, a factory worker in Cleveland, is taking her children, including daughter, Cirenna, 9, to the movies less often.

Published: February 27, 2008

Gasoline prices, which for months lagged behind the big run-up in the price of oil, are suddenly rising quickly, with some experts saying they could approach $4 a gallon by spring. Diesel is hitting new records daily, and oil settled at a record high of $100.88 a barrel on Tuesday.

The increases could not come at a worse time for the economy. With growth slowing, energy increases that were once easily absorbed by consumers are now more likely to act as a drag on household budgets, leaving people with less money to spend elsewhere. These costs could worsen the nation's economic woes, piling a fresh energy shock on top of the turmoil in credit and housing.

"The effect of high oil prices today could be the difference between having a recession and not having a recession," said Kenneth S. Rogoff, a Harvard economist.

The depth of the nation's economic problems became clearer Tuesday with the release of figures showing that prices at the producer level rose 1 percent in January from December, driven in large measure by energy costs. Compared with a year ago, prices were up 7.4 percent, the worst producer price inflation in the United States since 1981.

Other new figures showed that home prices around the country are falling at an accelerating pace, suggesting no end is in sight for the housing slump.

As of Tuesday, regular gasoline was selling at a nationwide average of $3.14 a gallon, according to AAA, the automobile club, up from $2.35 a year ago. The price has jumped 19 cents a gallon in two weeks.

Energy specialists predict that, as demand picks up further this spring and summer, retail prices will surpass the high of $3.23 a gallon set last Memorial Day weekend. That high fell short of the inflation-adjusted record of $3.40 in today's money that was set in 1981.

On Tuesday, diesel prices rose to a record $3.60 a gallon, compared with $2.62 a gallon last year.

For a decade, rising oil prices failed to dent global economic growth. In the United States, consumers absorbed the higher costs because of easy credit and rising prosperity, while in developing countries, government subsidies helped ease the pain. The rise in energy prices was a result of growing demand around the world.

The price of oil has quadrupled in six years, and the close Tuesday was not far below the inflation-adjusted high set in April 1980, after the Iranian revolution. That record, $39.50 a barrel, equals $103.76 in today's money.

As oil prices spiked last fall, low wintertime gasoline demand helped keep prices in check. But now, experts say, the price of oil is finally showing up at the pump.

For ordinary Americans like Phyllis Berry, a 31-year-old factory worker for General Motors in Cleveland, gasoline costs are starting to hurt.

"I used to fill it up pretty regularly, but now I drive it until the tank is almost empty, looking for the cheapest place to buy gas," said Ms. Berry, who drives a beat-up Dodge Caravan.

She said that she used to take her four children to the movies four or five times a month. But with the cost of gas, tickets, popcorn and soda adding up to $70, they now go only once a month.

Still, things are not quite as bad as during the 1970s and 1980s oil shocks. In the early 1980s, at the height of the last energy crisis, energy accounted for about 8 percent of household spending. As prices fell and the economy became less energy-intensive, energy costs fell under 4 percent of household spending in the early 1990s.

With the run-up in prices in recent years, economists say energy's share of disposable income is slowly creeping up again. In December, that figure reached 6.1 percent, the highest level since 1985. The increase of two percentage points — amounting to $200 billion — is a huge sum, a little less than half what Americans spend each year on new cars and automobile parts.

"You're adding an oil shock on top of a crunch on credit and a housing collapse," said Nigel Gault, an economist at Global Insight. "Even the U.S. economy cannot withstand all of that at the same time."

American consumers have responded belatedly by cutting back on their energy use. Oil demand in the United States grew by just 0.4 percent in 2007 and is expected to be flat in 2008.

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Rodrigo González Fernández
DIPLOMADO EN  RESPONSABILIDAD SOCIAL EMPRESARIAL DE LA ONU
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Renato Sánchez 3586
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Democrats Clash on Trade, Health and Tactics

Democrats Clash on Trade, Health and Tactics

Damon Winter/The New York Times

Senators Hillary Rodham Clinton and Barack Obama faced each other for the final Democratic debate before the March 4 primaries. More Photos >

Published: February 27, 2008

Senator Hillary Rodham Clinton confronted Senator Barack Obama on health care, Nafta, Iraq and his political tactics on Tuesday night in one of her most pugnacious debate performances of the campaign, as she fought for fresh momentum before four potentially decisive nominating contests next Tuesday.

Mr. Obama, pursuing a front-runner's strategy of nonconfrontation after winning 11 straight contests, mostly defended his positions and views, though he said he and his team had not "whined" about the Clinton camp's attacks on him. Sitting a couple of feet from Mrs. Clinton at a circular table, he appeared to listen intently to her attacks before responding in even tones.

The debate — the 20th for Democrats — was the final one before the March 4 contests in Ohio and Texas, states that the Clinton camp has labeled as must-win if she is to keep her campaign alive.

Questions about which approach Mrs. Clinton would take to sway voters were quickly answered as she immediately confronted Mr. Obama, and she was relentless throughout the meeting. She insisted on responding to virtually every point that he made — often interrupting the debate moderators, Brian Williams and Tim Russert of NBC, as they tried to move on.

At the same time, it was one of the most detailed and specific of all the debates, with both Mrs. Clinton and Mr. Obama giving long explanations of their records and views.

Unlike their debate last Thursday, a more cordial affair that ended with Mrs. Clinton saying she was "honored" to share the stage with Mr. Obama, this exchange had a belligerent edge. Mrs. Clinton did not nod along as Mr. Obama made standard Democratic points, as she has been known to do. She was more apt to call him "Senator Obama" than the friendlier "Barack." She did not smile at him.

At one point, after the moderators asked her a series of pointed questions, Mrs. Clinton even vented her long-simmering frustrations with news coverage of Mr. Obama, citing a "Saturday Night Live" sketch from last weekend that portrayed debate moderators as fawning fans of Mr. Obama.

"Can I just point out that in the last several debates, I seem to get the first question all the time?" Mrs. Clinton said, to a mix of boos and applause. "I do find it curious, and if anybody saw 'Saturday Night Live,' you know, maybe we should ask Barack if he's comfortable and needs another pillow."

(In fact, in their two other one-on-one debates, Mrs. Clinton was asked to answer the first question and then was asked more questions over all.)

The tenor of the debate was set from the beginning, when the moderators played clips of Mrs. Clinton praising Mr. Obama at the debate last Thursday and then declaring "Shame on you, Barack Obama" on Saturday, after his campaign sent fliers to voters in Ohio suggesting that she viewed the North American Free Trade Agreement as a boon.

Nafta is hugely unpopular in Ohio, and the two candidates have records of both praising and criticizing it, though Mrs. Clinton never used the word "boon." In some of her strongest language to date, she said at the debate that she would "opt out" of the trade pact if Canada and Mexico did not renegotiate it.

Saying Mr. Obama had sent out mailings that were "very disturbing to me," Mrs. Clinton defended her newly aggressive tone — a posture that advisers have encouraged in recent days as she faces increasingly tighter races in both Ohio and Texas. (Rhode Island and Vermont also vote Tuesday.) "I think it's important that you stand up for yourself," Mrs. Clinton said about her broadsides against Mr. Obama.

Mr. Obama denied misleading voters through the Nafta flier or another one about her health care plan's mandate that would require all Americans to buy insurance.

Mrs. Clinton criticized the health care flier, taking a strong swipe at Mr. Obama.

"What I find regrettable is that in Senator Obama's mailing that he has sent out across Ohio," she said "it is almost as though the health insurance companies and the Republicans wrote it."

Mr. Obama responded energetically to the accusation, and for 16 minutes they engaged in a terse back-and-forth over the now-familiar specifics of their health plans.

Their respective plans are quite similar; they both seek to make health insurance more affordable, and both have universal coverage as their goal. But the Clinton campaign has argued that 15 million Americans would go uncovered under Mr. Obama's plan, a number that relies on estimates by health care experts but is difficult to pin down depending on how a plan is devised.

"Senator Clinton, her campaign at least, has constantly sent out negative attacks on us," Mr. Obama said. "We haven't whined about it."

Contáctense con nosotros, opinen, escríbannos libremente.
Saludos
Rodrigo González Fernández
DIPLOMADO EN  RESPONSABILIDAD SOCIAL EMPRESARIAL DE LA ONU
www.Consultajuridicachile.blogspot.com
www.lobbyingchile.blogspot.com
www.el-observatorio-politico.blogspot.com
www.biocombustibles.blogspot.com
 
Renato Sánchez 3586
teléfono: 5839786
e-mail rogofe47@mi.cl
Santiago-Chile
 
Soliciten nuestros cursos de capacitación   y asesorías en Responsabilidad Social empresarial RSE   a nivel internacional y están disponibles para OTEC Y OTIC en Chile