The unfolding scandal in Washington should be seen in a wider context. In this case, writes PNS editor Franz Schurmann, a comparison with the events surrounding Watergate and the resignation of Richard Nixon, is particularly instructive. Schurmann is the author of "The Foreign Politics Of Richard Nixon" (University of California, Institute of International Studies, 1987).

As a Perjurygate now appears a real threat to the Clinton presidency, we might learn something by recalling the events -- beyond Watergate -- that finally forced Richard Nixon to resign.

The Senate Select Committee on Watergate began hearings on January 11, 1973. Nixon resigned on August 8, 1974. Though he fought off the Watergate challenges for more than 18 months, there is evidence that he started to fold in November of 1973. At that time the prominent right-wing columnist Joseph Alsop, who had close ties to the Pentagon, suddenly dropped his vehement defense of Nixon and asked the President to resign. That switch came shortly after the October "Yom Kippur" War. For the entire world, the chief effect of that war was a 400 percent rise in the price of oil -- an increase that came from actions taken by key oil producer Saudi Arabia, America's chief ally in the Middle East. It was a drastic act of protest against Nixon's bungled Middle Eastern policy.

Over the years since October 1973, oil prices have fluctuated, but despite occasional upward spikes, sooner or later settled down at some rough equilibrium level. This year they have been going down and down. A few weeks or so ago $13 per barrel was supposed to be a floor price. Now prices have gone to $12.

It's called "deflation" and Federal Reserve Board chairman Alan Greenspan has started officially worrying about it.

Few items so affect the U.S. and world economies as oil and the explosive politics that accompany it. If oil prices are unstable -- moving too much, up or down -- there's a good chance the entire world economy will also become unstable.

That's what happened in 1974 and 1975 -- the years of the "energy crisis," when the country plunged into the worst recession since the Great Depression. On October 20, 1973 the Saudis announced an oil boycott -- sparking a huge increase in the price of oil. Five days later the U.S. proclaimed a military "red alert," but it was canceled before people had enough time to fear another Cuban missile crisis.

Nixon was nowhere to be seen. The Secretary of State, Henry Kissinger and Secretary of Defense James Schlesinger seemed to be running national security affairs. Rumors flew suggesting Nixon had suffered a nervous breakdown or was in an alcoholic stupor.

Nixon was unable to undo the damage of those days. Nothing he did in his remaining nine months in office -- not even a June trip to the Middle East -- mattered much.

This year, the Iraqi "crisis" has dominated the news. Clinton ordered a huge military build-up and was on the brink of ordering the military to start bombing.

Oil prices went up as buyers feared shortages -- as did gold prices, which climb whenever war threatens. But nothing happened. Instead, Clinton faced a broad array of nations saying No! There were the French, Russians and Chinese, but, most damaging, the entire Arab world also said No! -- Saudi Arabia louder than anyone else. To make sure their No! was heard, the Saudis invited Iran's Hashemi Rafsanjani -- recently their arch-enemy -- to tour Saudi Arabia for some three weeks.

When U.N. Secretary General Kofi Anan met with Clinton in the White House, it was evident that Clinton had lost control of Middle Eastern policy. Congress fumed -- calling for a policy to overthrow Saddam and voting unanimously to indict him as a war criminal.

But those were nothing more than tantrums. What counts for Congress and the American people is the state of the economy. Clinton's high standings in the polls are mainly due to credit given him for the fine state of the economy -- many, if not most, Americans have been experiencing wonderful economic times.

As stories of sex scandals continue to unfold, it might be well to look over the horizon, beyond questions about the president's truthfulness. If these are not ordinary times -- if falling oil prices are a sign that things are out of control -- then our concern should not be whether or not the president lied but whether he can still lead.