id you ever think you would live to see $100 a barrel for crude?
Conservative talk show host John McLaughlin must have. Three weeks before the cost of oil nearly hit triple digits last week, McLaughlin predicted the lofty price on his syndicated television program.
At the same time, Howard Dean, chairman of the Democratic National Committee, said, “Unfortunately, ‘I told you so,’ is an incredibly unsuccessful campaign slogan.”
We now know both comments have turned out to be oh-so true.
Another inescapable truth about the high cost of crude is a corresponding increase in the price of gas. From here in OC to Orange County, Fla., gasoline is on the rise again. Now that the dots have been connected, it’s time to ask the all-important question: What is it going to take to reduce this country’s dependence on foreign oil?
Late last spring, after having written several articles on the topic, I argued that the cost of gas would reach $4 a gallon during the summer.
Thankfully, I was wrong. Today, with the cost of crude exceeding near $100 a barrel, I think my initial instinct was right but my timing was off.
If the international market’s volatility continues much longer, I am convinced my prediction will arrive before Santa does this year. How do the 2008 presidential candidates expect to deal with this impending crisis?
Moving from the brackish color of crude to something greener makes a lot of sense. It not only is a noble cause, it will help inoculate the U.S. against unpredictable events around the world and economic chaos at home. Honestly, I can’t think of anything more patriotic.
I only wish George Bush’s potential successors thought so. To their credit, they all mention energy independence from time to time; however, none of them has made it a major cornerstone of their campaign. Witness former Sen. John Edwards’ mid-October appearance at the Disneyland Hotel. He was the keynote speaker at the Democratic Party’s annual Harry S. Truman Dinner, which was attended by more than 1,000 people. Edwards never mentioned the topic.
No sooner does one of the presidential candidates float a big idea,say, about healthcare,than everyone, Democrats and Republicans alike, gets out his or her long knife and begins carving it up. Ditto for the war in Iraq, immigration reform or No Child Left Behind. The irony is we really don’t know how these issues will play out socially, militarily or economically.
We do, for a fact, know how $4 a gallon for gas will.
The economic impact will be quick and devastating. Coupled with the existing slowdown in the housing market, $4 a gallon will drive the U.S. economy into full retreat (dare I say recession?). If true, it’s no wonder none of the presidential candidates wants to bring up the topic. Even if it is half-true, they won’t unless asked.
But don’t take my word for it. Here’s what dailyfueleconomytip.com recently reported: When asked “If gas hits $4 per gallon, will it cause you to travel less?” Seventy-four percent of respondents stated that they would in fact travel less.
Back in August of 2005, after several U.S. refineries had been shut down and King Fahd of Saudi Arabia had died, the price of crude shot up to $62 a barrel. Today, it is more than 50% higher. Two years ago I asked, “Is this any way to run an oil business?” Now, I’m wondering, “Is this any way to run a country?”
The increasing price of crude may be good news for a handful of oil giants and their investors, but it is bad news for every day folks. For all their talk about patriotism, I say the time has come for the presidential candidates to rally ’round this impending crisis.
If they do, I am confident a new economic model can be forged that serves this nation’s best interest. If they don’t, I am afraid America faces an economic meltdown of unbelievable proportions. My guess is both McLaughlin and Dean would agree on both counts.
Freidenrich is the founder of consulting firm First Strategies LLC in Laguna Beach.
