But I do disagree with how it will turn out. (I also think the economy has yet to crash. They’re still arguing about whether there will be a recession. If had crashed, they would be arguing about when it started and if it was over yet.)

The problem this time is that demand is catching up with the United States for the first time.

That is exactly why I think it’s a problem. Last time, the root cause of the energy crisis was depletion of US oil fields. We use to be Saudi Arabia, setting the price by opening and closing the oil taps. We lost that ability around 1970 as our oil fields began to dry up, and that’s what allowed OPEC to put the screws to us with the embargo.

But it was a fake crisis. There was plenty of oil, it just wasn’t getting to us in the usual manner. This time, supplies actually are tight. It’s not going to be a short term problem.

We’ve been paying a tenth of what the rest of the world has for gasoline, and now the dollar is deflating and China and India are demanding more oil than ever.

Not true. We are paying less than many other countries, but that’s because our taxes are low. It’s most expensive in Norway, where it’s roughly twice what we pay – not 10 times. Many people in the world are paying much less than we are, because there are no taxes at all, or their government actually subsidizes the cost of gasoline. Gas costs something like 20 cents a gallon in Venezuela. Americans amuse the locals by taking photos of the gas pumps, they’re so amazed at the price.

But yes, China and India’s increased demand is a factor as well. That is what led Matthew Simmons to write his influential book, Twilight in the Desert. He’s an investment banker who funds energy projects, and he started wondering if there was enough oil in the world for China to achieve a US standard of living. He found that there wasn’t. Even the level of Japan in 1960 was iffy.

The reality is we’re just going to have to adjust like everyone else did 50 years ago.

Everyone else didn’t. They’re going to have a hard time, too. In fact, in many countries, they already are.

The point is, the dollar is at a low point; it’s much more likely to improve than to get worse

I disagree about that, too. I think they’ll be forced to keep the dollar fairly weak. Given a choice between inflation and deflation, they’ll pick inflation. “Helicopter Ben” fixed the recent credit crisis (temporarily) by firing up the helicopters, and he’ll do it again.

last few Congresses their fair share of the credit/blame for economic woe.

But don’t say I didn’t warn ya!

FDR didn’t take over until well after the Great Depression had started, so he avoided the blame.