OIL CHANGE.(The Talk of the Town)(petroleum and the US)

Publication: The New Yorker

Publication Date: 02-MAY-05

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It was sometime last spring that the dreaded words "oil shock" first began to appear regularly in commentary on the United States economy. As the price of oil rose past forty dollars a barrel, many economists and Wall Street analysts predicted that higher petroleum prices would slow the economy and perhaps even throw it into recession. They recalled the reverberations of previous oil shocks (in 1973, following the Arab oil embargo; in 1979 and 1980, after the Iranian revolution and the Iran-Iraq war; and in 1990, after Iraq's invasion of Kuwait) and suggested that we'd soon be feeling them again. Since then, the price of oil has gone well above fifty dollars a barrel, and the oil-price anxiety is as acute as ever. Last week's news that inflation had jumped in March had people talking about stagflation and Gerald Ford. Before we know it, it will...

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