Follow the Oil Money

And it doesn’t lead to a good place. U.S. dependence on foreign oil has led to both a wealth transfer and a power transfer

Just the other day, I paid $4.80 per gallon for regular gas in San Francisco. But the high cost at the pump is not the greatest problem created by skyrocketing oil prices.

Far more serious is the massive wealth transfer that high oil prices are creating from the U.S. to not-so-friendly governments including Russia, Iran, Nigeria, and Venezuela. As their leaders accumulate massive personal wealth and sense their increased power in the world, these “new rich” nations are distancing themselves from the U.S. and moving steadily away from democracy.

This wealth transfer has staggering implications for the relative power of the U.S. in the world. A nation’s strength is based on the strength of its economy, much more than its military might. Witness the collapse of the old Soviet Union in the 1980s. If our country’s leaders do not respond aggressively to skyrocketing oil prices by encouraging people to reduce consumption and working to increase supply, the power and influence of the U.S. will inevitably decline, and so will our standard of living.

Bill George: The former chairman and chief executive of Medtronic, he serves on the boards of ExxonMobil, Goldman Sachs, and Novartis.

Business Week