WASHINGTON — The world economy is experiencing a disorienting flashback to the 1970s.
Oil prices are once again surging in the wake of war in the Middle East, driving up the cost of gasoline, diesel and jet fuel and threatening a return to stagflation – the toxic mix of higher prices and slower growth that made economic life so miserable a half century ago.
But the U.S. and world economies are less vulnerable now than they were when Saudi Arabia and other Middle Eastern petroleum producers withheld oil supplies to punish countries that supported Israel in the 1973 Yom Kippur War.
In response to that shock — and another triggered six years later by the Iranian revolution — countries embarked on a new course to increase their energy efficiency, reduce their dependence on Middle Eastern oil, stockpile fuel against future threats, and find and develop alternative sources of…
