Americans Watching a Way of Life Disappear?
Yesterday, crude oil reached $126 per barrel for the first time. That is a 25 percent increase year-to-date, and it isn't finished. Search the web, and it is easy to find broad-ranging opinions pointing towards $200 a barrel.
This is a life-changing catastrophe for Americans. As gas quickly approaches $4.00 a gallon, we must start to grapple with the concept of gas at the pump costing $5.00 to $6.00 and up.
For me personally, I now spend $75.00 each time I fill my 2002 Ford Windstar. Every time I make a 20-trip, I need to tack on an additional $4.00 in fuel expenses. Moreover, how will I respond when I have to pay $175.00 to fill my vehicle each time? I won't be able to afford to drive it.
Unlike many Americans, I am still fortunate. Most of my required travel (work, church, school, etc.) is within a relatively short distance from my home. There are many, however, who travel 40 to 50 miles or more each way from their home to their workplace. That will add up quickly! What will happen when millions of Americans start spending hundreds of dollars every month just to get to work?
You will start to see a spill-over effect in many other sectors of the economy. As Americans watch their discretionary income dry up due to high gas prices, large segments of the economy will struggle. Simply put, Americans will not be able to afford many extras as they pour their hard-earned money into their gas tanks.
Unfortunately, there is not a quick, easy fix to this problem. Wouldn't it be nice to have cars that rely on clean, affordable electricity instead of gasoline? Wouldn't it be nice if the US had a high-speed rail network operating on Electricity (like Europe) that connects the major cities in every state?
The problem is easy to see: even if our government leaders made the decision to "fix" the problem next week (A "War on Foreign Oil Dependency"), the relief is years away. Meanwhile, the American economy will shrivel and die.
As a historian, I am always looking for parallels, and this one appears easy to see: the years 1928-1932. If I was Barak Obama or John McCain, I would find some good books on Herbert Hoover and his Administration and study the decisions they made during this critical time period in American history. Hoover was a good man, and in normal times, would have made a good president. Unfortunately for him, he was the wrong man at the wrong time. America's bill came due during his term, and we couldn't pay it. Moreover, the policies his Administration implemented in an effort to combat the economic crisis only exasperated the problem. Ten years of hard economic depression followed.
Like Hoover, whoever wins the 2008 presidential election will likely face a historic crisis during his term in office. Like America in 1930-32, we will be incapable of dealing with the problems that could confront us in 2010 to 2012. It will take a couple of years of real pain before Americans of all levels are willing to accept the inevitable change that has come upon them. It is in times like these that either greatness or evil will rise. The United States elected FDR in 1932; Germans elected the Nazi party to a majority in the Reichstag and Adolf Hitler became chancellor.
Regardless of what the future holds, it is likely we are watching a way of life Americans have enjoyed since 1946 come to an end. Our dependency on foreign oil is the root cause. We have enjoyed a carefree lifestyle for many decades, but now it's time to pay the bill.
References
$200 Oil Could Happen This Year - May 06, 2008
A Goldman Sachs analyst on Tuesday predicted that oil prices could reach $150 to $200 a barrel over the next 6 months to two years, but said that how far prices could climb still "remains a major uncertainty." Oil for June delivery hit a record of more than $120 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. MSNBC
China Projected to be World's Biggest Auto Market by Middle of Next Decade - May 06, 2008
China boasts the world's second-longest highway system at 1.1 million miles and has seen its auto production rise quickly, from only 220,000 passenger cars in 1993 to 2.34 million in 2004, according to IBM. With millions of new Chinese purchasing their first automobile, the demand for fuel in China will grow exponentially. MSBBC