Paul Krugman: Dealing With the Dragon

On both Wednesday and Thursday, the price of oil briefly hit $100 a barrel. The new record made headlines, as well it should have. But what does it mean, aside from the obvious point that the economy is under extra pressure?

Well, one thing it means is that we’re having the wrong discussion about foreign policy.

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.