Wednesday, July 11, 2007

What If?
Could we have broken our Oil Habit?

It is a sad truth that I buy books much faster than I can read them. Thus, the late John Kenneth Galbraith's 1994 work, A Journey through Economic Time has been sitting on my shelf since I purchased it, used, a few years ago.

This summer, however, it has finally made the the journey from bookshelf to nightstand...the book is full of nuggets, but here is one I just couldn't pass up.

In Chapter 20, "The Dim Years", Galbraith is describing the "stagflation" that gripped the economy of the 1970s: unemployment levels are rising along with prices, while the country is reeling from Vietnam, Watergate, and massive social upheaval. This is the environment which breeds Archie Bunker.

In the middle of all of this, Arab nations flexed their political muscles for the first time, sending gas prices flying and tempers soaring. It is not hard to make the argument that the mistakes we made then, and the policy we set (or failed to set) has helped push us into the current Iraq debacle with which we struggle.

Galbraith describes a meeting of Carter's advisers as they determine how to wrestle with the economic shocks of the 1970s...
Proposals for rationing the supply and the controlling the domestic price of petroleum products, the natural answer to embargo and an external control of supply, were dismissed out of hand. Urging a simple gasoline rationing program at a meeting of economists at Camp David in the summer of 1979 at the peak of the oil-price crisis, I managed only to establish myself as mildly eccentric.

If we had taken that advice then, if we'd broken our oil addiction, and thus the power that the Middle East wields over us...just imagine how different today might have been.

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