Middle East Update

Voices around the world, from Europe to America to Libya, are calling for U.S. intervention to help bring down Moammar Gaddafi. Yet for bringing down Saddam Hussein, the United States has been denounced variously for aggression, deception, arrogance and imperialism.

Is Islam the Problem?

The high cost of oil: We accept instability and even war in the Middle East to maintain our addiction

The problem, however, is not that the United States has had the wrong foreign policy. The problem lies in the failures of U.S. domestic policies. For 40 years, we have had no effective response to what eight presidents — from Nixon to Barack Obama — have called our addiction to oil. The fundamental problem, of course, is that notwithstanding all the laws Congress has enacted since the oil embargo of 1973, we have still not solved the nation's energy problems.

The fundamental difficulties that brought energy into the policy forefront then remain unabated. The United States has 4% of the world's population, but we consume 25% of the world's oil. Today, we import more than 50% of our oil, compared with 35% in 1973, the year the Arab oil embargo shocked consumers at the pump. 

Our domestic energy policies have failed us. Although we have succeeded in eliminating oil from electricity production (reducing oil-based electricity generation from 17% in 1973 to less than 1% today), this has come at the cost of substantially increasing our reliance on dirty coal-fired electricity, boosting our carbon emissions considerably. 

Likewise, automobile fuel efficiency standards have reduced somewhat U.S. oil consumption, but in an unnecessarily costly manner, and they do nothing to reduce the miles we drive. Economists have estimated that a gasoline tax of just 25 cents a gallon would have saved as much oil as these fuel efficiency standards at one-third the cost to the economy. 

We have also decreased our oil imports by creating a heavily subsidized ethanol industry that now supplies about 7% of the fuel our automobiles burn. The costs of this wasteful pork-barrel program, however, have substantially outweighed its benefits, except to the corn farmers and ethanol refiners for whom it has been a bonanza. 

Decades after the Arab oil embargo, we accept instability and even war in the Middle East as inevitable. We take it for granted that we will pay the costs in lives and treasure. And although we know that high gasoline prices change people's behavior, Congress refuses to impose taxes that would raise petroleum prices, even though it could devise a way to return all of the revenues from such taxes to the American people based on their household size or level of income. As a result, our growing oil consumption and our reliance on imports continue. 

The president recently described Libya's oppression of popular unrest as unacceptable. It is. But so is our longstanding failure to address our inadequate domestic policies concerning oil.

Economic forces behind everything: Middle East edition

What has made the situation especially volatile is that, during the past thirty years, many Arab countries have greatly expanded their higher-education systems. In Egypt, about a quarter of students now attend college of some sort, and there are few suitable jobs for them when they graduate. Unlike in the United States and other Western countries, the unemployment rate increases with the level of educational attainment. “Joblessness among Egyptian college graduates is almost ten times that of people with primary education,” Marcus Noland, deputy director of the Washington-based Institute for International Economics, and Howard Park, an economist at Wharton, have pointed out. “It is no surprise that the leaders of the current unrest are univesity graduates.”