The world has gone through this ceremonial interment time and again. And those conducting it have proven premature just as many times. Remember the oil cartel and how it brought the industrialized West to its knees with the oil embargoes of the 1970s? The picture of an American president named Jimmy Carter wrapped up in a cardigan and telling the nation it had to turn down its thermostats, ration gasoline and just shiver in the cold is still vivid in memory. Even this long after Ronald Reagan came along to set the American economy free.
American ingenuity, enterprise and persistence have proved more than enough to turn the tables on the oil sheikhs. And now it is the United States of America that is the world's petropower. And it is the oildoms that are shaking in their sandals. And it couldn't happen to a more deserving bunch.
The wheel turns, in this case, on all the Cassandras who used to talk about peak oil and how the world was burning a finite fuel that can never be replaced. The sun can't be replaced, either, but nevertheless it goes on burning brightly and creating still more deposits of petroleum under the surface. Like in the tar sands of Alberta in Canada and in the Fayetteville Shale here in Arkansas. The process of fracking, another product of American ingenuity and persistence, has turned the economic world upside down, and now it's this country that's exporting oil to the rest of the world.
Happily, our oil and gas industry is using its power cautiously, perhaps because it's gone through this cycle before. Memories of previous booms followed by busts can make even the most exuberant enterprise cautious, which is a welcome sign that perspective, like the oil industry, is coming back. To quote Phil Flynn, an energy analyst with the Price Futures Group: "Despite the cautious optimism by some of these companies, they aren't ready to jump in 100 percent now. I think there's some trepidation." Free translation: It always pays to look before leaping.
Or as Dave Lesar of Halliburton, the worldwide supplier of oil-drilling equipment, says of the oil companies: "There is a spring in their step that I didn't see earlier in the year, and in almost every case, they are talking about adding rigs, buying assets. In short, they are getting back to business." What goes up must come down, and doubtless will in the case of the oil industry, but not now, not yet. Workers who had to be let go during the slump are being rehired instead of being retrained for less remunerative occupations as life and hope return to the oil patch. But the oil business has always been a crap shoot and still is.
"There seems to be a sense that the worst is over," to quote Phil Flynn again, "but you still have a lot of challenges going forward." As in every business and in life itself. To mention just one of those challenges to those ready to proclaim that happy days are here again and won't ever go away, there's the worldwide oil glut.
There are worse problems to have. The country should be happy to have such a problem, for it still runs on oil, and the consumer still benefits when supply exceeds demand instead of the other way around. Yet the same old demagogues or their latter-day progeny still proclaim that these are the worst of times and look for any handy scapegoat to blame for today's prosperity. Like the oil industry. Or the rich or Muslims or you name it -- because the designated villain from day to day matters less than the politics of rousing voters' fear and envy, which is the essence of the demagogue's art.
The sage Friedrich von Hayek, the philosopher-economist and champion of the free market, once explained how this blame game works. For the demagogue must set up an enemy of the people to blame for all the country's and world's troubles in order to "weld together a closely coherent and homogeneous body of supporters. ... It seems to be almost a law of human nature that it is easier for people to agree on a negative program ... than on any positive task. The contrast between the 'we' and the 'they,' the common fight against those outside the group, seems to be an essential element in any creed which will solidly knit together a group for common action. It is consequently always employed by those who seek, not merely support of a policy, but the unreserved allegiance of huge masses. From their point of view it has the great advantage of leaving them greater freedom of action than almost any positive program. The enemy, whether he be internal, like the 'Jew' or the 'kulak,' or external, seems to be an indispensable requisite in the army of a totalitarian leader."
The same applies to a democratic leader who's just looking to get elected on a hate-the-rich program, however rich he or she may be personally. Like the Democratic nominee in this year's presidential race, who heads not just her party's ticket but Clinton Inc., another worldwide cartel.