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Dra w ing by Da n Hu nearly tenfold in that decade, the decade which President Carter’s “energy czar” James Schlesinger referred to as “the Golden Age of the Oil Industry.” The conclusion must be drawn that Big Oil did all right, bad publicity or not. The oil majors did spend plenty in the American media to blur the issues, if not dominate their very presentation. Robert Sherrill and OIL FOLLIES touch on many more aspects of the game not recounted here, including, for instance, the role of industry-produced information on the creation of public policy, the dumping of federal onshore and offshore oil leases on the market in cooperation with the Department of Interior \(long before James Watt’s of oil produced and taken from federal lands. The world is still reeling from the oil price shocks of the last decade. Even the industrial nations of North America and Europe find themselves dramatically more vulnerable, particularly in financial markets, than a decade ago. An economic shock in the form of higher prices followed each of the two major disruptions the Arab Oil Embargo of 1973-74 and the Iranian Revolution of 1979 which nearly tripled the rate of inflation and almost doubled the unemployment rate in the United States. The “price shocks” of the 70s rippled throughout the global economy, underscoring the fact that the world is far more interdependent in economy and trade than was previously recognized by most authorities. The average annual oil import bill for the Third World as a whole stood at $3.5 billion in 1972. In 1982, that figure swelled to $50 billion. For those unfortunate nations of the Third World that did not produce oil for export, the cost of importing oil over the same period increased from $8 billion to over $80 billion. Higher oil prices were quickly translated to higher rates of inflation as world consumers, including entire nations, shifted their spending patterns away from manufactured goods and toward those commodities more necessary for survival. And Western financial circles were more than willing to loan the Third World all the funds needed to keep those economies humming, by financing over a longer term the oil import bills of those smaller nations. Combined, these factors created and sustained balance-of-payment deficits throughout the developing world. These higher oil prices resulted in the transfer of an ocean of funds from the oil-consuming to the oil-producing nations, a reflection of a similar transfer of wealth from consumers to petroleum producers in America. The extent of the international transfer of wealth was so great that oil-producing nations could not absorb the increase within their own economies and instead invested this in the industrialized Western world, whose bankers, in turn, recycled the petrodollars in the form of loans to the Third World to pay for their oil imports. Get the picture? As the industrialized economies slowed, demand for products of the Third World also slowed, sending those less-developed nations into a devastating recession that ultimately encompassed every national economy. The debt of the Third World is expected to have exceeded $660 billion for 1983, with the bulk of that owed by a handful of Latin American nations. It should become obvious to the many concerned over possible coups d ‘etat in Central America that a military solution for the region would simply be a “BandAid solution” to causes that are principally economic. The international debt of these countries \(now termed “the international debt crisis” in the nation’s the interests of the United States than any of the more conventional antagonists, whether real or imagined, dealt with to date. The culmination of the oil price shocks of the 70s, in combination with our own burden of the 80s \(e.g., Ronald the highest unemployment rate, the highest interest rates, the highest number of business failures, etc., since the Great Depression. In reading Sherrill’s OIL FOLLIES, the politically astute will recognize the Reagan policies as the same or similar to the policies applied in the preceding decade, though now ardently masked in ideological garb. The dumping of federal offshore oil leases onto the market at fire-sale prices by the Reagan Department of the Interior is, in effect, no different from earlier attempts to give away the American endowment the nation’s wealth in natural resources for pennies under the veil of “increasing production for America’s consumer.” Reagan has always thought that government regulation was inherently evil and has justified the Great Reversal in American public policy principally on those grounds. So, we take note of a Reagan Department of Energy that wishes to settle with the major oil companies for little or nothing for past violations of price controls on oil. \(Criminal justice aside, the Department offered to settle with Mobil Oil for three cents on the dollar for their billion-dollar outstanding $10 billion in oil overcharges is still pending before the Department of Energy. Reagan’s free-market ideology \(“the administration to such an extent that even the threat of an impending disruption or cut-off of Persian Gulf oil, and the economic disaster that would ensue for this country and Western Eruope, has not altered his basic ideological principle of “das Market uber alles.” The General Accounting Office, the International Energy Agency, and the Congressional Research Service have all indicated that, under a Reagan “policy” of an uncontrolled market in which prices are set at the world level, even assuming that the U.S. imported no oil, that policy would add from $34 to $130 to the price of a barrel of oil. These agencies variously estimate the impact on the American economy, ranging from adding 3 to 11 percent to the current inflation rate, reducing real GNP growth between three and thirteen percent, and increasing the unemployment rate for American workers by an additional one to six percentage points \(over six million the President has not wavered in his belief that the market is the most rational THE TEXAS OBSERVER 21