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Time To Panic?

By Daniel Politi
Posted Monday, June 9, 2008, at 6:36 AM ET

The Los Angeles Times leads with a look at how analysts will be keeping a close eye on this week's economic reports for hints about the state of the U.S. economy after Friday's news of surging oil prices and unemployment sent stocks tumbling. Investors will be looking at the reports—including ones that will reveal data on the real-estate market, inflation, and consumer confidence—to try to figure out how worried they should be about the future. "It shouldn't be a surprise that the economy is weak," one economist said. "The question now is whether it's accelerating to the downside." USA Today leads with (and the Wall Street Journal fronts) news that according to AAA, the national average price of gasoline hit the $4 mark for the first time yesterday.

While high gas prices are causing economic strain in household budgets across the country, those living in rural areas are being affected most by the increases, the New York Times says in its lead story. People in rural areas usually drive longer distances in vehicles that eat up more gas while making less money, which means gasoline is taking up a bigger chunk of the family budget and is competing with other necessities such as food and housing. The Washington Post leads locally but off-leads a look at the new leader of the Revolutionary Armed Forces of Colombia. When the man known as Alfonso Cano, "a bookish communist intellectual," took over the leadership of the FARC after the recent death of its founder, he inherited an organization struggling to survive amid a military crackdown and mass desertions. Some think the next few weeks will see a surge in violent activity by the FARC in an effort to show that it's still relevant. But that won't change the fact that many military commanders are predicting that the revolutionary movement could soon be defeated or, at least, pushed into peace talks. The WSJ plays weekend catch-up and leads its world-wide newsbox with Sen. Hillary Clinton dropping out of the presidential race and throwing her support to Sen. Barack Obama.

In the past few months, Wall Street investors had been acting on hopes that the U.S. economy would rebound in the second half of the year. But after Friday's double dose of bad news, investors began to fear that their predictions had been too optimistic and sent the Dow Jones industrial average tumbling almost 400 points. There are fears that "a vicious circle is underway," as the LAT puts it, because negative economic reports lead to a weaker dollar and higher commodity prices, as investors look for refuge in economies abroad. These higher oil prices then lead to less consumer spending, which drives even more investors away from the dollar.

Although consumers often fret about high gas prices, so far the increases haven't caused as much widespread pain as the oil crises of the 1970s and 1980s. That's mostly because Americans spend, on average, a mere 4 percent of their after-tax income on fuel for transportation. But in some rural counties, that figure is now higher than 13 percent and it's wreaking havoc on local economies as people are drastically decreasing their consumption in order to keep up.

The surging price of gas is only one part of a flurry of bad economic news that has hit Americans recently and is raising doubts about the future. USAT fronts results from a new poll showing that a slim majority of Americans believe their standard of living is no better now than it was five years ago. In addition, a mere 45 percent of Americans think their children will have a better standard of living than they do. "So is the American Dream dead? Well, it's at least wounded," says USAT.

With this ongoing concern about their economic future, it's little wonder that the economy continues to rank as the No. 1 issue in the minds of voters. "The issue provides one of the starkest contrasts" between the presumptive presidential nominees, says the WSJ. Obama will highlight these differences in a two-week campaign tour that will focus on the economy and include stops in some of several key swing states. While Democrats want to keep talking about the economy, Sen. John McCain is pushing his foreign-policy experience as the main rationale behind his candidacy. In his first general-election TV ad, the Republican reminds voters that he has seen the consequences of war up close and says he's "running for president to keep the country I love safe."

As the general election officially gets underway, McCain doesn't just have to counter Obama's claims that electing the Republican is akin to giving President Bush a third term; he also has to unify social conservatives, many of whom are still reluctant to get behind his candidacy, note the LAT and NYT in front-page pieces. Interestingly enough, both papers mention Lori Viars, an activist who spent months campaigning for Bush in 2004 but so far is waiting to hear more from McCain before deciding whether to volunteer. The LAT reports from Ohio, where some Republicans are openly fretting about the fact that McCain has been slow in mobilizing the base of voters who were critical to Bush's crucial victory in that state in 2004. The NYT says McCain's campaign knows it has lagged behind on courting evangelicals, and over the past month it has quietly stepped up efforts to gain their support. But it's a tricky proposition because McCain also wants to appeal to independent voters who might turn their backs on the Republican if he begins espousing too many socially conservative views.

The WSJ goes inside with a dispatch from Burma and reports that despite the government's pledge to allow foreign-aid workers inside the country's borders, "little has changed for relief staff here." A few aid groups can now access the worst-hit region, but many workers are still being denied access to the Irrawaddy River delta and the country as a whole. The government continues to deny visa applications from aid workers and has been restricting access to some areas previously open to outsiders.

Late last month we learned that Al Gore's An Inconvenient Truth is being turned into an opera, and today the NYT reports that Brokeback Mountain will also suffer the same fate. The New York City Opera has commissioned composer Charles Wuorinen to create an opera based on the short story that led to Ang Lee's award-winning film. It is scheduled for a 2013 premiere.

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Daniel Politi writes "Today's Papers" for Slate. He can be reached at .
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