The history of the United States of America since 1981 has been greatly affected by oil resources. As a matter of fact, oil has largely shaped the socio-economic and political history of the U.S since the 1980s. In addition, it is worth noting that oil has been the center of focus bearing in mind that it is the major source of energy that the country relies on. In addition, the United States of America has been a dependant importer of oil throughout her economic history (Baker 12).
It is against this backdrop that the United States often undergoes tense economic and political moments when the oil prices fluctuate in the world market. For instance, consumers always feel the burden of high oil prices both economically and socially since they have to shoulder the extra burden of increased taxation. On the same note, the political arena was also affected as a result of high prices in oil products.
The nation relied heavily on building political leadership so that it could be in a vantage position to control oil resources. It is against this background that this paper discusses how oil played a role in shaping the American history in three main areas of life namely politically, socially and economically.
To begin with, it is important to explore the economic impact of oil in the history of United States of America. Monetary spending on importation of oil has indeed acted against the United States economy since there is a lot is spent on the importation of crude oil compared to the value received on exports although the latter is still impressively high. The U.S. financial system has become significantly reliant on foreign oil.
It is interesting to note that most of the oil resources used in the country is imported (Baker 42). In addition, transport department had used a great percentage of oil than any other department. Transport has consumed more because many of the citizens have vehicles that guzzle a lot of fuel. The nation has spent most of its finances on importing oil and this has affected the cost of life for the American public.
Since 1981, the U.S history has experienced lasting price deflation through high oil price. High oil price has worked against economic development of United States. This phenomenon has also affected the price of basic commodities in the market and consequently hindered economic expansion. From the same period of time, price instability has of basic consumer goods has more than doubled bearing in mind that any slight change in the price of oil has a direct effect on the production of other goods and services.
Price shocks slow down the rate of development and decreases the level of productivity. Low rate of growth coupled with weak level of production have been on the forefront towards aggravating recession. Consequently, this has led to the rise in price level of consumer goods and other important services offered by the government.
The Iranian revolt in 1979 was behind this worldwide recession. Later, Iraqi invaded Kuwait in 1990 and America’s economy was affected negatively by another recession. It is apparent that high price of oil was the result of the same economic decline during the same period of time (Baker 57). The recession that occurred in 2001 was to a certain extent caused by the sharp rise of oil price. That was after California suffered energy crisis and socio-economic pressures emanating from the Middle East.
The price of oil also rose quite highly between 2003- 2008 largely due to market fears. For instance, it is worth noting that the Middle East region was under war while Iran was fast on track with its nuclear threats. As a result, the supply of oil was equally put under threat leading to unstable supply of the commodity in the United States. The oil prices were pushed up as a result of this fight for looming oil shortage.
In yet another encounter, the economy of the nation was affected and living standard of many Americans was distressed (Baker 68). The fear of oil shortage was also coupled with high rate of unemployment as well as lower wages which led to poor living standards.
Oil had its social role in American history. A good example was when two key engines of the local boom became unsuccessful in 1980s.
The failure brought a bust in oil market. What happened later were compound social problems related to lasting decline in job opportunities at New Orleans port. The latter was one of the metropolitan regions that were left in a state of depression. Worse still, the American citizens were affected socially since they could not find jobs during the same period of time. The overall result of the depressive economic times was the poor standards of living.
Another social role played by oil was contributed by the fact that the Americans has accustomed their way of life purely on oil consumption from domestic to industrial applications. Whenever shortage of oil was reported, their social life was equally changed negatively.
This means that throughout history, America has found it cumbersome to do without depending on foreign oil. Their expensive lifestyles heavily rely on oil resources that are also scarce at the same time. Their history proved that despite trying to look for other sources of energy, they were not able to survive without importing oil from other countries.
Oil has also affected the political history of America. The Americans have always yearned to vote political leaders who would come up with favorable government policies concerning oil. Since 1989, it was the government policy to minimize over dependence on foreign oil. The political leadership including the presidency introduced political policies towards oil importation.
One of the policies was that of the free-market economy. The adherents of this policy were Presidents Ronald Reagan and George H. W. Bush. Reagan forsook conservation and optional energy initiatives and decided to regulate oil prices. President Bush sustained these policies further until his term in office expired.
One of the outcomes of this policy was a boost in imports from the Middle East. Free-market policy increased oil supply in America and during the 1990s, the Persian Gulf regions were exporting oil in huge volumes. During the same period of time, the American public enjoyed high standards of living due to reduced rate of inflation on the economy.
The Gulf War that took place in 1991 affected the supply of oil in America. It was through President Bush administration that national energy rule was crafted in order to chart the way forward for a stable energy policy in United States. President Bush was concerned over the need to have some lasting supply of oil as well as security in the country.
At latest, subsequent administrations tried to cut down on finances used on oil importation by establishing nuclear energy firms. Despite the preservation efforts of these administrations, the demand for petroleum products persisted for a considerably long period of time. By the onset of the 21st century, the nation was already using million barrels of petroleum on daily basis.
This demonstrates how oil has been significant According to the above information on how America as a nation had depended on foreign oil for many years in history, it is imperative to mention the following points. First of all, it is quite cumbersome to separate the role of oil in the history of America be it socially, politically or economically. The nation had experienced high rate of inflation due to hikes in oil price.
Furthermore, it is also worth noting that the justifications of the 2003 war on Iraq by the Bush Administration did not single out ‘oil interests’ as one of the reasons for the attack. Definitely, the American public and the world at large could not have expected such a rationale to be put forward. Nonetheless, critics of the Bush Administration reiterated that the latter had some underneath agenda on the oil resources found in Iraq.
An earlier blue print by the neo-conservative group known as the Project for the New American Century (PNAC) emphasized the dire need for the United States government to restore its 20th century superpower image and global domination. Indeed, the acquisition of Iraq oil resources through indirect control was thought as one way of advancing U.S foreign policy in Middle East and t also a way of building a robust U.S economy through cheap or ‘near-free’ imports of crude oil from Iraq (Baker 76).
Baker, Dean. The United States Since 1980. New York: Cambridge University Press, 2007. Print.