Inside every recession there’s a silver lining and in this one it’s falling oil prices, down from $147 a barrel in July to $48 this week and maybe headed toward $40.
And inside falling oil prices there’s another silver lining: It shuts up people like Iranian President Mahmoud Ahmadinejad. Oh, he’s still ranting away in Tehran but he lacks that old anti-U.S. fire and focus. For one thing, he is in danger of losing his job.
He looked like a genius in July but now that oil revenues have slackened Iranians can see what a shambles he has made of the economy. Unemployment is high, inflation even higher and Mr. Ahmadinejad, having squandered the oil revenues when times were good, is forced to consider cutting spending and raising taxes, which should make his real popular with the bazaar crowd. He is up for re-election in June, and without oil money to throw around and the United States to kick around he may face a second career driving a cab.
Another silver lining is that Russia, also overly dependent on oil revenues, has become notably less grandiose along with its new best friend in Latin America, Venezuelan blowhard Hugo Chavez.
In Moscow, work has stopped on what was to be Europe’s largest and tallest — 1,968 feet - office building. The Associated Press quoted the developer as saying that because of the credit crisis there was no money to pay for the building and no demand from tenants to fill it. That’ll do it to you.
Like Mr. Ahmadinejad, Russian Prime Minister Vladimir Putin tried to blame Russia’s economic problems on the United States — “cheap money doping and mortgage troubles.” Curiously, that kind of stuff flies when times are good, not so well when times are bad.
“Cheap money doping” is a tough argument to make when the dollar is getting stronger and the ruble is cratering. And just as in the United States, one suspects the Russian people are less interested in hearing from their leaders about who is to blame for the crisis and more interested in hearing how they’re going to get out of it.
Some analysts say Russia will be in a major economic crisis early next year. That should keep the Kremlin too busy to castigate our hedge fund managers. We’ll take care of that ourselves.
Another silver lining in the global slowdown is less whining about how China will be the next economic super power and we’ll become Venezuela, only without the oil.
True, China has had a booming economic growth rate, now dropping toward 9 percent, but has to grow at least 8 percent just to accommodate its 20 million or so new work-force entrants each year.
The Chinese have long given up on castigating us for our decadent materialistic ways. Now, to light a fire under the economy, the leadership is trying to get the country’s notoriously thrifty peasants to indulge in a little decadent materialistic spending of their own.
Beijing has stepped up building subsidized housing so the peasants will have to buy furniture, TVs and appliances when they move in. But getting them to spend is an uphill task, as the New York Times reports.
Its reporter asked a farm wife, Zhang Fengxia, if she would use a credit card if one were given to her. She replied, “What’s a credit card?”
Zhang Fengxia doesn’t know it, but she’s her own silver lining.
Dale McFeatters is a columnist for Scripps Howard News Service.