Oil: James Pethokoukis of US News looks at life with $200 oil.

It's an economic experiment I would rather not take part in: seeing how $200-a-barrel oil would affect the U.S. and global economy. "The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty'' is what Goldman Sachs economist Arjun Murti wrote earlier this week. (Note that Murti blames the weak dollar for a good part of the continuing rise in oil prices.)

Murti is hardly alone in such seemingly spectacular speculation. Analysts at Deutsche Bank and CIBC World Markets, investor Jimmy Rogers, and the current president of OPEC have all made such forecasts.

And what would such a price rise do to the economy? Market strategist Ed Yardeni thinks he has a pretty good idea (bold is mine):

A super-super spike would most likely put a stake in the heart of global economic growth. A global economic downturn would be the most likely outcome, led by a longer and deeper recession in the US. Then again, in this scenario, the price of oil would probably fall rapidly and sharply back down to $100 a barrel, or even lower, as demand weakened. Wouldn't the drop in oil prices then revive economic growth? Normally, it would, but if the super-super spike occurs, the resulting longer and deeper recession could trigger the dreaded "negative feedback loop" from the credit crisis. http://www.usnews.com/blogs/capital-commerce/2008/5/7/can-the-economy-survive-200-a-barrel-oil.html?s_cid=rss:capital-commerce:can-the-economy-survive-200-a-barrel-oil

Scandal times at the Office of Special Counsel chief Scott Bloch: Ongoing investigation that I’ve ignored till now. Two posts:

A veteran Republican lawmaker called on Office of Special Counsel chief Scott J. Bloch to resign yesterday, one day after nearly two dozen FBI agents raided OSC headquarters and carted off boxes of documents and equipment that officials said were related to a probe of Bloch's activities.

"In light of the various investigations into Mr. Bloch's conduct, including the FBI probe revealed yesterday, it's hard to believe he can continue to operate effectively," Rep. Thomas M. Davis III (Va.), the top Republican on the House Oversight and Government Reform Committee, said in a statement. "It's time the OSC put this turbulent period behind it."

Bloch, appointed by President Bush in 2003 to protect government whistle-blowers and to enforce prohibitions on political activity in the federal workplace, is facing allegations of political bias, obstruction of justice and mismanagement. The inspector general at the Office of Personnel Management has investigated Bloch since 2005 over alleged mistreatment of employees and his handling of whistle-blower cases, but Tuesday's raid was a significant escalation.

Bloch and more than a dozen current and former OSC employees have been served with subpoenas to appear before a grand jury, which will probably begin hearing testimony the week of May 19, sources familiar with the investigation said. The lead prosecutor is Assistant U.S. Attorney James Mitzelfeld, who works on public corruption cases.

Other critics have also called for Bloch's ouster, including the Project on Government Oversight (POGO) and Public Employees for Environmental Responsibility -- both nonprofit groups -- and a lawyer representing several current and former OSC employees. http://www.washingtonpost.com/wp-dyn/content/article/2008/05/07/AR2008050703971_pf.html

FBI agents investigating government watchdog Scott Bloch have subpoenaed any records that would reveal whether concerns about the 2004 elections prompted him to clear Secretary of State Condoleezza Rice of ethics violations.

Bloch, the U.S. special counsel who investigates federal employee whistleblower complaints, found no merit to allegations that Rice, then President Bush's national security adviser, timed some of her trips to boost Bush's 2004 reelection campaign.

The FBI is investigating whether Bloch obstructed justice by destroying computer files to hinder an outside inquiry into allegations that he retaliated against employees who opposed his policies. He's also suspected of making false statements to investigators.

FBI agents, who searched Bloch's office and home Tuesday, subpoenaed 17 of his current and former employees to appear before a federal grand jury and asked them to bring any documents related to possible tampering of records in the office's electronic investigative tracking system, McClatchy has learned.

Officials with knowledge of the investigation also told McClatchy that the FBI has subpoenaed records about the decision to assign Rice's case to an investigator. The officials asked to remain anonymous because they weren't authorized to discuss the investigation.

It's unclear whether the FBI is looking into Bloch's decision to clear Rice or whether agents are seeking evidence in separate obstruction and false-statements investigation. http://www.mcclatchydc.com/251/story/36329.html

Burma: Almost unimaginable situation, as the Burmese government continues to slow aid. Bodies everywhere, a lack of clean water, epidemics feared:

As hungry, shivering survivors waited among the dead for help after a huge cyclone in Myanmar, aid agencies and diplomats said Wednesday that the delivery of relief supplies was being slowed by the reluctance of the country’s secretive military leaders to allow an influx of outsiders.

With conditions growing worse in the vast, flooded Irrawaddy Delta region, the top United States diplomat in Myanmar estimated that the death toll could rise as high as 100,000, from the official tally of 22,500. An accurate assessment might take days or weeks to emerge.

Relief workers and survivors described scenes of horror as people huddled on spits of dry ground surrounded by bodies and animal carcasses floating in the murky water or lodged in mangrove trees.

With Myanmar mostly closed to foreign journalists, information was coming from aid agencies, residents and diplomats based there. Witnesses spoke of fights over dwindling supplies of food and clean water, of hordes of people overwhelming the few shops still open. http://www.nytimes.com/2008/05/08/world/asia/08myanmar.html?_r=1&oref=slogin&ref=todayspaper&pagewanted=print

Zimbabwe: Opposition activists are killed: the ruling party is “quieting” opponents, and targeting teachers and aid workers:

Gangs of youths loyal to Zimbabwe's ruling party beat to death 11 opposition activists in a remote town this week in an escalation of post-election violence, opposition party officials and witnesses said Wednesday.

Two large truckloads of youths, led by two senior members of President Robert Mugabe's party, marauded through Chiweshe, a rural area about 90 miles north of the capital, Harare, and beat prominent opposition members with branches, gun butts, bicycle chains and whips, party officials said. Four of the victims were teachers, and at least two were elderly.

Several calls to police spokesman Wayne Bvudzijena were not answered, though telephone service in Zimbabwe is often poor, one of many elements of the country's infrastructure that has deteriorated in recent years. http://www.washingtonpost.com/wp-dyn/content/article/2008/05/07/AR2008050702252.html

Lebanon: The Shiite and Sunni battle has flared up:

The decision by the Lebanese government to shut down a private telephone network operated by the Iranian-backed group Hezbollah was an act of war and Hezbollah would defend itself, Sheik Hassan Nasrallah, Hezbollah’s leader, said on Thursday.

The comments were among Mr. Nasrallah’s strongest since the beginning of Lebanon’s months-long political crisis and may signal a new level of confrontation between Hezbollah and its supporters and the Western-backed government. Tensions have escalated in recent days, and clashes and gunfire continued on the streets of Beirut on Thursday as Hezbollah tried to enforce a general strike called by labor unions.

On Tuesday, the government said that it would send troops to shut down a telephone network operated by Hezbollah in south Lebanon and the southern suburbs of Beirut.

“This decision was a declaration of war and the start of war on the resistance and its weapons,” Mr. Nasrallah said, speaking via satellite at a news conference convened by Hezbollah in the southern suburbs of Beirut. http://www.nytimes.com/2008/05/08/world/middleeast/09lebanon.html?_r=1&hp=&oref=slogin&pagewanted=print

Iraq: Using the Medically “Non-Deployable: The Pentagon has done this since 2003.

More than 43,000 U.S. troops listed as medically unfit for combat in the weeks before their scheduled deployment to Iraq or Afghanistan since 2003 were sent anyway, Pentagon records show.

This reliance on troops found medically "non-deployable" is another sign of stress placed on a military that has sent 1.6 million servicemembers to the war zones, soldier advocacy groups say.

"It is a consequence of the consistent churning of our troops," said Bobby Muller, president of Veterans For America. "They are repeatedly exposed to high-intensity combat with insufficient time at home to rest and heal before redeploying."

The numbers of non-deployable soldiers are based on health assessment forms filled out by medical personnel at each military installation before a servicemember's deployment.

According to those statistics, the number of troops who doctors found non-deployable but who were still sent to Iraq or Afghanistan fluctuated from 10,854 in 2003, down to 5,397 in 2005, and back up to 9,140 in 2007.

The Pentagon records do not list what — or how serious — the health issues are, nor whether they were corrected before deployment, said Michael Kilpatrick, a deputy director for the Pentagon's Force Health Protection and Readiness Programs. http://www.usatoday.com/printedition/news/20080508/1a_lede08_dom.art.htm

USA: End of a Superpower(?) Michael Klare posits that oil is our downfall, our Berlin Wall (being torn down).

Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel crude oil roared past $110 on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4.00. As was true of the USSR following the dismantling of the Berlin Wall, the USA will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

That the fall of the Berlin Wall spelled the erasure of the Soviet Union's superpower status was obvious to international observers at the time. After all, the USSR visibly ceased to exercise dominion over an empire (and an associated military-industrial complex) encompassing nearly half of Europe and much of Central Asia. The relationship between rising oil prices and the obliteration of America's superpower status is, however, hardly as self-evident. http://www.tomdispatch.com/post/174929

CAMPAIGN: Mixed signals, as campaign chief Howard Wolfson negotiates a book contract, i.e. the campaign is wrapping up, while she pushes on and continues to fire away.

USA Today: Clinton fires up the Race issue; Is everyone too tired, too ‘moved on,’ just wanting to ignore her? Is that why there’s no reaction?

Hillary Rodham Clinton vowed Wednesday to continue her quest for the Democratic nomination, arguing she would be the stronger nominee because she appeals to a wider coalition of voters — including whites who have not supported Barack Obama in recent contests.

"I have a much broader base to build a winning coalition on," she said in an interview with USA TODAY. As evidence, Clinton cited an Associated Press article "that found how Sen. Obama's support among working, hard-working Americans, white Americans, is weakening again, and how whites in both states who had not completed college were supporting me."

"There's a pattern emerging here," she said…

Obama spokesman Bill Burton said that in Indiana, Obama split working-class voters with Clinton and won a higher percentage of white voters than in Ohio in March. He said Obama will be the strongest nominee because he appeals "to Americans from every background and all walks of life. These statements from Sen. Clinton are not true and frankly disappointing."

Clinton rejected any idea that her emphasis on white voters could be interpreted as racially divisive. "These are the people you have to win if you're a Democrat in sufficient numbers to actually win the election. Everybody knows that." http://www.usatoday.com/news/politics/election2008/2008-05-07-clintoninterview_N.htm

Mike Barnicle:

Now, faced with a mathematical mountain climb that even Stephen Hawking could not ascend, the Clintons -- and it is indeed both of them -- are just about to paste a bumper sticker on the rear of the collapsing vehicle that carries her campaign. It reads: VOTE WHITE. http://www.huffingtonpost.com/mike-barnicle/race-is-all-the-clintons_b_100660.html

Rumors/Speculations: Why is she staying in?

(1) Clinton is angling for help retiring her debt… help from Obama. I doubt that contributors to Barack would want their money spent to bail out the failed Clinton campaign.

(2) She’s seeking to force a VP offer from Obama, one that he’s hardly wanting to make. (Would you want her and Bill hanging around?)

Super-delegates: He’s 8 behind, though counts differ. http://www.politico.com/superdelegates/

McCain the Maverick: He did ‘good cop, bad cop’ with Cindy (‘I won’t reveal my finances- ever.’) McCain: She said ‘John will run an honorable, respectful campaign.’ John said that Obama is the candidate of Hamas.

As to his reputation, it’s time to challenge the notion that he is a man of principle.

Over the years, Sen. John McCain has publicly condemned Republican Party leaders and occasionally voted against the GOP on selected issues. But an Arizona Republic analysis of his Senate votes on the most divided issues in the past decade shows that McCain almost never thwarted his party's objectives.

....During the 10 years The Republic examined, McCain crossed over to vote with Democrats 19 times in 82 close votes. He did so just once in the four years he was running for president: 1999, 2000, 2007 and 2008. http://www.azcentral.com/arizonarepublic/news/articles/0507mccainvotes0507.html

-R