Elsewhere in this issue, you will find advice Barack Obama can act on to ensure that history views him as the transformational figure he hoped to be when he took office, from saving Europe from itself to taking nuclear weapons off alert. But transformation cuts both ways. So in the interest of further assisting the president, consider a pitfall he and the country must avoid if this period in U.S. history is not to be someday seen as when it all went wrong for the onetime greatest country on Earth.
Of course, given the clown-show antics that predominate in Washington and the complexity, volatility, and risks that confront the United States in the world, the president faces potential peril almost wherever he looks. Rather than focusing on the country's more obvious problems, however, I'd like to look at one that is perhaps more worrisome precisely because it comes cloaked in opportunity: America's energy boom.
That's right: the boom. The technological breakthroughs enabling America to tap vast reserves of previously inaccessible oil and natural gas have been heralded as a bonanza for the United States, not least by Obama, who told everyone tuning in to his speech at the Democratic National Convention that "we can cut our oil imports in half by 2020 and support more than 600,000 new jobs in natural gas alone." Analysts at Citibank are predicting that the United States will be the world's fastest-growing oil and gas producer well into the next decade. Great, huh? Not so fast.
It looks like the United States is showing the early symptoms of a particularly nasty case of the Resource Curse. The dreaded syndrome, also known as Hugo Chávezitis, tends to strike countries when they tap into large finds of oil, gas, or other valuable natural resources. Although such bonanzas clearly have their advantages, the influx of new wealth often leads countries to neglect real underlying problems or the requirements of long-term growth simply because they can spend their newfound riches to paper over their troubles. Political leaders don't have to do the hard work of building human capital and promoting sustainable economic growth -- they can just coast along, riding the benefits of the resource boom.
You can understand the appeal, especially to America's dysfunctional governing class. That is precisely what is so worrisome about all the talk of how these new energy finds will literally fuel the country's next period of economic expansion. You heard it during the recent presidential campaign from both candidates. You heard it in a slew of reports from Wall Street and international organizations. America is on the verge of energy independence. It will soon overtake Saudi Arabia as an energy producer. It will no longer have to worry about the messy realities of the Middle East. New boomtowns like those springing up in Canada and North Dakota will spread across the United States. Cheap energy will attract foreign investment! Revitalize U.S. manufacturing! Help America beat China and India!
Here's the biggest problem with all those assertions: They are plausible. America's energy boost is possibly the biggest geopolitical change to hit the world since China's rise. It almost certainly will stimulate U.S. growth, reduce U.S. dependency on foreign oil, and provide Americans with large amounts of comparatively clean natural gas. And since growth leads to higher revenues, it may help cut the federal deficit. Because America won't be as dependent on the Middle East, it may even be able to reconsider its involvement in the region. Already, U.S. monthly oil imports have nearly halved from their high in November 2005, and annual natural gas production has increased almost 30 percent from 2005 to 2011. What's not to like?