CNBC's Michelle Caruso-Cabrera made the stunning statement on Morning Joe today while reporting on a change in Chinese policy that should lower the price of crude oil world-wide.
View video here.
MICHELLE CARUSO-CABRERA: Joe, Mika, I have wonderful news this morning. I have probably some of the best news that American people have heard in months and months and months.
JOE SCARBOROUGH: This is great: the Brady Bunch is doing another movie?
CARUSO-CABRERA: No. The Chinese people are going to have to pay more for gasoline.
SCARBOROUGH: Wow, that is --
CARUSO-CABRERA: That is a huge deal because remember, the Euros are always complaining: "oh, you Americans. You have such cheap gasoline–because in Europe they have those very high gas taxes to pay for all their outdated socialist programs that they should have gotten rid of a long time ago–but they never mention the fact that China, India, all of the Middle East, nearly every emerging-market economy in this entire world, puts caps on gasoline prices. So that their drivers never have to pay beyond a certain price. So in China, for example, you never paid more than $2.42 a gallon. That is, until this morning, where they've now raised the price to $3 per gallon. Now personally I think they should get rid of price caps completely.
Why this is significant is because in China, you never saw what economists call "demand destruction." Here in the United States, prices have gone up to $4 a gallon. What's happened? People drive less. So you have less demand. Never happened in China because to the average Chinese person it didn't look like gasoline was getting more expensive. Now it will. And this is significant because for the first time ever, in history, emerging market economies are now buying more oil than the United States. Happened for the first time last month. They're buying 25,000 new cars a day in China, that were never on the road before. It's a big deal.
Oh, that factoid I teased at the top? Caruso-Cabrera is an unreconstructed free-market advocate despite having graduated from that liberal incubator, that Hillary alma mater . . . Wellesley. Let's hear it for Michelle and market forces.
