Yet despite -- or perhaps because of -- all that money, Saudi Arabia is becoming "Osama Arabia." In light of the continuing attacks on Americans and other foreigners working in that nation, it is worth taking a closer look at what it is doing with its petrodollars. The desert kingdom recently announced a crackdown on "charities" caught funding terror, but the targeted groups were relatively small. The just-dissolved Al-Haramain Islamic Foundation, for example, distributed a mere $50 million a year. Meanwhile, the Saudis are promising to set up a new, "transparent" philanthropic entity, the Saudi National Commission for Charitable Work Abroad, which is to give away $100 million a year. Even assuming that that $100 million is all "clean," one is left wondering what the Saudis will do with the other $99.9 billion they'll receive for oil over the next 12 months. A Washington source told me that Saudi Arabia has in fact given an average of $4 billion a year in "foreign aid" over the past decade.

Where's all the money going? Nobody really knows. And nobody -- at least in the United States -- seems very interested in finding out. On Saturday, the New York Times reported that a task force on Saudi terror funding at the Council on Foreign Relations is about to announce that Riyadh has "not fully implemented its new laws and regulations, and because of that, opportunities for the witting or unwitting financing of terrorism persist." But, the Times notes, one sentence was deleted from the task force's final document -- "The Bush administration has done very little to push the implementation of the rules and regulations" -- possibly at the behest of the Bush White House.

Thus even after 9/11 and the resulting war on terror, the U.S.-Saudi relationship appears fundamentally unchanged. Saudi Arabia sells us oil while telling us -- via high-priced P.R. spokesmen and lobbyists -- that it is our ally. In return, America offers the Al-Saud family a geopolitical security blanket and a cloak for financial transactions.

The consequences of the free market's "invisible hand" are now visible: People who hate America are engorged with American money. Having worked for the Gipper for five years, I believe that if he were in office today, he would concede that blind fealty to the free market has brought unintended consequences -- big-time. And so he would take a second look at renewable energy. Although Reagan believed in free markets and limited government, he was pro-science; he strongly supported the space program, for example, and the never-built superconducting supercollider. Reagan also would understand what was required to win the war on terror -- the de-funding of those who are funding terrorists, even at the risk of upsetting big GOP constituencies.

It's time for a geostrategic shift -- and a return to the idea of energy independence. It's time to revisit energy conservation; we must get serious about hydrogen, solar, wind and other renewable-energy sources.

It won't be easy to gain complete energy independence from the oilocratic foes we are financing, but at least we can start reducing the terror tax. After a long detour -- and after realizing that the free market is paradoxically aiding our worst enemies -- we can get back on the path to energy independence.

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