Dudder: Deja vu, Again

High oil prices, a falling dollar, economic and societal malaise? It's not the 1970s, but the next best thing to it-today.

I never thought I'd live to see a repeat of 1976, but it is looking like we are about to enter a prolonged period of retreat on many fronts as the "malaise" of the recent years settles upon the electorate.

I never thought I'd live to see a repeat of 1976, but it is looking like we are about to enter a prolonged period of retreat on many fronts as the "malaise" of the recent years settles upon the electorate. Of course, one big difference is that I'm not about to graduate from high school again, nor is it likely that Dorothy Hamill, still a looker, will once again sweep me-and most of my peers-off our feet. However, the car I am driving the week this is written-a Ford Focus coupe-does remind me of the Pinto Dad bought that year, and that I would inherit upon his death in 1980. Like its predecessor, it stands as an example of what brought Ford to its current situation just as the Fiesta, then and now, represents what it needs to do in order to put things right.

It's on a broader front, however, that things are most like 1976, and most troubling. The country is tired of the war in Iraq, commodity prices are rising, oil has shattered records no one ever thought it would reach, and politicians are readying initiatives on a number of fronts that promise to make things better, but only will make them worse. As happened in when the first windfall profits tax was passed, these taxes will reduce exploration, limit supply, and increase costs by collapsing the market and driving independent oil producers-the very companies that do the most to produce domestically-out of business. This is the very scenario that drove the large oil companies, the ones some of the candidates and many of the members of congress have targeted for "excessive profits," to shift their purchases to overseas sources. To this day, there are fewer active drilling rigs in the U.S. than were in operation in the 1970s. And, though the politicians bemoan our "addiction" to foreign oil, their actions were the ones that increased our dependence on countries that have little love for the United States.

Add to this the fact that there have been no new refineries built in the country for more than 30 years, despite the increase in demand around the world for processed oil. Until recently, Europe sold us their excess unleaded gasoline while we shipped our surplus diesel to them. But this trade has slowed as demand has risen for those products around the world. True, it's more profitable for the refineries to run at or near capacity more often, as is the case today, but any disruption-think Katrina and the devastation that hurricane had on the Gulf Coast where the majority of our refinery capacity stupidly sits-ripples through the global system with effects that last for years. Perversely, "NIMBY" ("Not In My Backyard") keeps new refineries held up in endless litigation on environmental and even aesthetic grounds.

The same is true for oil drilling, whether it is off shore or in a small portion of the Arctic National Wildlife Refuge. Every excuse possible-from the amount of time it will take for this oil to enter our economic bloodstream to the minute potential for ecologic disaster to the aesthetic ugliness of off-shore rigs-is used to prevent exploration within the legal boundaries of the United States. This happens while China and Cuba ink an agreement for the former to drill off the coast of the latter, and not far from the coast of Florida. It takes little imagination to expand this scenario to include angle drilling into "our" reserves while we argue over whether we should drill at all.

As if this wasn't enough, the dollar has dropped in value as the Federal Reserve chairmen-both Greenspan and his replacement, Bernanke-overinflated the money supply and tried to use low interest rates to restart the economy. And, just like the 1970s and early 1980s, the economy has shown signs of stagflation-stagnant growth coupled with inflation-and rising commodity prices. In another eerie similarity, there is call for more government intervention, more programs, more taxes, more conservation-witness the increase in CAFE standards and the ridiculous ban on incandescent light bulbs-and less exploration.

When sanity returns, and I am not making any predictions just how far into the future that might be, we will find that the only resources in short supply are hope, brains, and guts necessary to take a positive view of the future. With luck it will happen before we have to answer the question so many oil company executives and resources ministers asked of their U.S. counterparts at a global conference in Houston recently: "Why does your country insist on committing economic suicide by restricting its energy exploration?" Why, indeed.