Wednesday, October 11, 2006

That 70s Blog

As I've mentioned in previous postings, I'm intrigued by what the past can tell us about the challenges that lie ahead. Two months ago I highlighted a Wall St. Journal op-ed that drew clever analogies between the current world situation and several pivotal years in the 20th century, including 1938, 1942, 1948 and 1972. As appealing as I found the 1948 perspective, I've lately been leaning toward 1972 as the better comparison. The last couple of months of news have generated an atmosphere that feels uncomfortably reminiscent of the Seventies. Having come of age in that confused and conflicted decade, I had hoped sincerely never to see its like again. Unless we avoid some fairly obvious traps, though, we could find ourselves just as powerless to improve our situation as we seemed back then.

No analogy is perfect, but here are some disturbing points of correspondence:
  • A war on the far side of the world has brought our international standing to a multi-decade low point, and anti-Americanism is rampant. The consequences of withdrawal look at least as bad as those of staying and failing.
  • American politics are fractured by partisanship and scandal, undermining the effectiveness of government in addressing the large problems we face.
  • Despite current strength, trade and fiscal deficits cast a pall over the economy and the dollar. It's worth recalling that the Dow Jones Industrial Average broke 1000 for the first time in late 1972--and didn't see that level again until nearly four years later, when 1000 was only worth about $735 1972 dollars.
  • International terrorism is again a major factor in our lives. Besides the tragic loss of life, this has triggered responses that make air travel even more of an ordeal than it already was.

Why is any of this worth mentioning on a blog devoted to energy? Well, even though oil prices have been falling since August, and gasoline is back down to $2.26/gallon, our underlying energy problems haven't disappeared. The best-case scenario for conventional energy would hold domestic oil and gas production level, putting the burden on coal and renewables to stem the otherwise inevitable growth of energy imports. Although we certainly have much better energy technology and market options than we did in 1973, capitalizing on them calls for a confident and coherent bi-partisan approach.

Ironically, while two energy crises contributed considerably to the economic malaise of the 1970s, we've weathered three years of unusually high energy prices with minimal disruptions. Perhaps we learned a few things the last time, because however much we groused about it, we let the market do its job, thereby avoiding gas lines and odd-even-style rationing. In any case, energy plays a smaller role in the economy today, and that's a healthy development. But if we don't manage today's other big challenges and restore confidence in our government and economy, we won't have the wherewithal to reduce our steadily increasing reliance on imported fossil fuels. Frankly, I'd much rather hear where the candidates for elected office stand on that, than all the current posturing about which party is better equipped to attend to housekeeping matters within the Congress.

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