Roger from the Netherlands, Unfortunately, you may be right. Politicians necessarily act on problems where ther is a ray of hope of a resolution before the next election, a rather unfortunate price we pay for living in republics. Only a lame duck or an out-of-power has been can address those issues,, and he (or she) will be ignored and marginalized. As examples, look at Al Gore on global warming or Jimmy Carter on world peace. They are emenently reasonable, even statesmen, but they are like contagious plague carriers to the national political parties of the United States.
  We have a country to huge that no one can expect to act much different and still be in the ploitical process. Maybe the size of the Netherlands makes statesman-like behaviour possible. The antceint Greeks thought democracy was impossible in any polis with more than about 5,000 citizens, and I'm not seeing much to change my opinion.  

We have a small response in the US, driven by our current "high" prices.  I know they are low in comparison to Europe, but they've moved a few people.

As I say, a small response:

According to Ford, the full-size SUV category shrunk to 800,000 units in 2005, from a 2003 high of more than 1,000,000. That's 20 percent less high-profit hardware hitting the highways in just 24 months, including the biggest-of-the-big Ford Excursion, which was pastured a year ago.

http://www.herald-mail.com/?module=displaystory&story_id=154713&format=html

Pushed by the Toyota Yaris, Honda Fit and Nissan Versa -- small, front-wheel-drive, fuel-efficient subcompacts introduced this year -- the low-price end of the small-car market is up 42.2% through November, compared with a year ago, industry tracker Autodata says.

http://www.freep.com/apps/pbcs.dll/article?AID=/20061221/BUSINESS01/612210378

I can only think that such things will accelerate if and when "peak oil" becomes apparent to the average consumer.

... if you are an arch-cynic, that's the kind of thing you just didn't expect to happen ... yet.

After thinking about this for a few years, I come back to the same conclusion.

I do believe the problems are going to really ripple through the financial sector. Seeing the amazing statistics regarding  consumer negative savings rates and debt levels, it would appear that a significant portion of the populus is poorly prepared for rapidly increasing energy costs.

So, once the peak oil is out of the bag, I imagine that many will start to drastically cut back on discetionary items that fuel the economy, and keep people employed.

Look at the auto industry. Ford and GM cannot survive without the sales of SUV's and trucks. Their business model is dependant on those high margin vehicles, for now. From what I remember, about 1 in 5 domestic jobs are tied to auto industry. From manufacturing, subcontractors (Johnson Controls, Dana, etc) all the way to the person selling you the vehicle. Oh, and don't forget the refiners that make gasoline. So about 20 percent employment!

The average person owing 20k on an SUV will have a hard time unloading a highly undesireable vehicle to go buy a hybrid, or Corolla. Will they be able to continue to fill up the SUV? Ford or GM will have to look alot different when the peak oil news breaks, or one of them is going to fail quickly. (Rather than the slow death they are now experiencing)

How about the Marine industry? I would expect that would suffer a huge contraction. This will be one of the first industries to take a big hit.

RV Industry: Ditto the Marine Industry.

Dining out. Mid tier and up will start to suffer. (Chili's, TGI Fridays, etc) This is about the first to go when consumers are pinched. (in this case, rising energy costs)

Housing. The exurbs will be a undesireable place. I see a shift toward consolidation around employment centers. What happens to those institutions holding paper that financed this housing?

IMHO, these are the things that I would expect to suffer in "Phase I". By no means a comprehensive list.

When the consumer starts cutting back, or eliminating the need for the aforementioned items, I would expect unemployment to skyrocket. An unemployed individual does not  pay his bills, let alone buy much other than basic necessities.

Conclusion: A viscous circle of layoffs, foreclosures, failing industries (reliant an discrentionary income), higher taxes, inflation, declining wealth from a depressed stock market and finally bank failures.

Capitalism cannot work without growth. Nothing has been proven yet to provide the energy density and transportability of oil (save nuclear), and that oil has fueled alot of growth.