No longer a nation of movers
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What backup plans exist for oil supplies amid conflict?
There is a kind of backup plan for oil supplies. It could soon be under threat as well. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. The Iran war continues to escalate. Yemen's Houthis have entered the fight, launching attacks on Israel over the weekend. That raises concerns they could again start disrupting oil and cargo moving through the Red Sea. The Red Sea is Saudi Arabia's backup export channel for some limited amounts of oil and other cargo. Julia Coronado is founder of Macro Policy Perspectives and a professor at UT Austin and is here to talk about it. Good morning, Julia. Good morning. So now that we've got Houthis on the other side of Saudi Arabia threatening supplies there, what does that mean for oil disruptions and beyond?
Yeah, I think the longer this conflict drags on, and not only the Strait of Hormuz is closed, but now we're looking at possible disruptions in the Red Sea, the more we worry about disruptions beyond just oil. Other industrial products like aluminum and helium, which are necessary for the semiconductor production process, and also consumer goods in the Red Sea. So a much broader potential set of supply chain disruptions is possible.
Does this add to worries about inflation? Or when do we start worrying about economies around the world actually slowing down because of this?
Well, the challenge is that both are at risk. This is inflationary.
How could disruptions in the Red Sea affect global supply chains?
It is also something that can destroy demand and cause recessions, certainly in many countries, if not the U.S. So both are concerns, and that's the challenge for central banks. The risks to both sides of their mandates are very high right now.
Later this week, we will get a bunch of U.S. economic data, the jobs report being the big one. Do you think we'll see the war enter into that data in any way?
Probably the March report is a little early to see a war impact. In fact, we're going to have the return of about 30,000 striking workers and a very warm month, probably boosting job gains in March. So I think it's a little bit early to see it in the jobs numbers.
Julia Coronado, founder of Macro Policy Perspectives. Thank you so much.
My pleasure.
The Trump administration is reversing course on blocking oil shipments to Cuba and will allow Russia to deliver crude oil there. The estimated 730,000 barrels of oil are expected to arrive today. Cuba has been experiencing nationwide blackouts, severe fuel shortages and shutdowns of schools and non-essential businesses due to the U.S. blockade.
In states like California, New York and Washington, there are legislative proposals to introduce new higher taxes on millionaires and billionaires. This is reigniting a very old debate. Do the wealthiest of people move away when their taxes go up? And how about the rest of us? William Fry is a demographer at the Brookings Institution. William, good morning. Good morning. So, you know, whenever there are proposals to tax the wealthy in a given city or state, the counter argument is, you know, don't kill the golden goose because they will leave. Do wealthy people flee high tax places for low tax places?
Well, it's certainly possible that they do. Many studies have shown that very rich people, when they have to make a decision of where they want to live and there's a significant tax on their income, maybe even on their wealth to some degree, they're going to say, well, gee, I can do better somewhere else and save a lot of my money. But when you're talking about those people, the very high people, This is not a group that, you know, makes a big dent in the overall state or urban area population. So, yeah, it's something to be considered, but let's not overdo it.
What about, you know, the rest of us? There's some research suggesting we are all moving less as a nation. Internal migration is falling. Why is that?
Well, if you look at this historically and go back to the 1950s, about one fifth of the population moved every year. Oh, it's now down to I think this last year is maybe nine percent rather than 20 percent.
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