Moving in Uncharted Territory

By James Howard Kunstler, kunstler.com. Posted December 10, 2005.

When people of any political persuasion cry for America to pull out of Iraq they should be ready to understand that things won't be "back to normal."

When people of any political persuasion cry for America to pull out of Iraq, what do they suppose will be the result? That America will go back to being the same nation of easy-motoring, McMansion-buying consumpto-trons we were in 1999? Things have changed.

The world oil markets have changed. Their stability through the 1990s was a transient phenomenon, and a circumstance which, unfortunately, put us to sleep. During that time, OPEC, led by Saudi Arabia, was the world's "swing producer" -- the oil producer with spare capacity that could always open the valves and pump more. And they did, even cheating on their own official quotas, which only had the effect of flooding the market with "product" and driving down the prices -- so by the end of the last century oil had sunk to $10 a barrel.