Obama's the first Democrat to face down rising gas prices in an election year since Carter. But he has advantages his unfortunate predecessor didn't.
Cars line up for gasoline during the 1979 fuel shortage / Image: Wikipedia
Gas prices are up, and there's a Democrat in the Oval Office seeking reelection. What year is it?
For Politico, 2012 is 1980 all over again, and the newspaper is now pondering whether President Obama will end up "owning" high gas prices much the way Jimmy Carter did by the end of his term in the White House.
It's certainly possible that, as fuel costs inevitably rise in the coming months, enough cash-strapped voters will start casting blame on the president to cripple his reelection chances. You never know. But economically, comparing Carter's dire predicament, which he notoriously mishandled, with Obama's is silly, in part because you can't look at gas prices in a vacuum. The late 1970s were an economic nightmare in which fuel costs were one of several scourges. Today, we're looking at a strengthening recovery that's better equipped to withstand a bit of pain at the pump.
Here are four big reasons to ignore those Carter comparisons:
No. 1: The U.S. isn't in a fight to the death with inflation
If there's a single graph that captures the misery of America's economy in the 1970s and early 1980s, it's the one below. That blue line? It's the non-core inflation rate, which includes the cost of goods like food and energy which get left out of other measures. Notice that in late 1978, when the Iranian revolution helped send oil prices soaring, prices were already rising at more than 7 percent a year. U.S. policy makers had been trying and failing to slay inflation for most of the decade, and the sudden shock of high oil prices helped set the rate completely out of control. Expensive crude made gas, as well as consumer goods, more expensive. That sent workers bargaining for higher wages, which made prices to rise further. Presto chango: an inflationary spiral.
But it got worse. Federal Reserve Chairman Paul Volcker's early, haphazard attempts to slow down runaway prices and save the value of the dollar led to sky high interest rates, which sent the economy tumbling into recession by the summer of 1980 -- right in the middle of Carter's re-election campaign. By July, unemployment topped out at 7.9 percent (it eventually dropped back to 7.1 percent by November).
Today, inflation is just about dead last on America's list of potential economic problems. Workers also aren't in much of a position to bargain for higher pay based on their weekly gas tab. So high gas prices aren't going to lead to the same terrifying wage-price spiral that, along with some clumsy tinkering by the Fed, demolished the economy under Carter.
No. 2: We don't have ridiculous regulations on selling gas
The long lines of drivers waiting outside gas stations for a chance to fill up might be the iconic image of Carter-era economic malaise. But the gas shortages that yielded those lines weren't a direct result of high prices. Rather, they were the produced of an ill-designed system of price and distribution controls, which led gas stations to sell off what limited fuel they had on a first-come-first-serve basis, then close up shop early. To get a sense of how horribly the government's regulation distorted the market for gasoline, check out this 1979 paper from the Brookings Institute. Among their myriad unintended consequences, the controls actually made it more profitable for refineries to stash away gasoline supplies and sell them at a later date, even if there was an immediate shortage. Thankfully, those kinds of regulations went out of style along with disco.
No. 3: Iran (probably) isn't going to stop selling oil
One of the eeriest similarities between today and the Carter era is the role Iran is playing in sending up gas prices. Then, it was fallout from the Iranian revolution. Today, it's uncertainty generated by U.S. and European attempts to stop Tehran's nuclear program. But there are big, gaping differences between the challenges of of 33 years ago and today.
In December of 1978, following the revolution, Iran's new leaders halted all oil shipments (they resumed a small amount the following March). At the time, the country was the world's second largest oil exporter. The market panicked, and the price of crude increased 150 percent over the coming year. Gasoline prices followed, jumping 55 percent in six months.
The current confrontation between Iran and the West is scary, yes. But unless it erupts into outright war, chances are we won't see similar supply disruptions compared to what happened in 1979. The U.S. has levied sanctions on Tehran aimed at limiting it's ability to sell oil. But as I wrote yesterday, they're not intended to take all of their crude off the market. Iran, for its part, is reportedly so desperate to to sell oil that it's offering barter deals.
No. 4: We're used to high gas prices
There's no question about it: When oil prices rise rapidly, they can hurt the economy. But when it comes to determining just how bad the damage will be, it's important to look at where oil prices have been in the recent past. James Hamilton, a professor at the University of California, San Diego, has come up with a formula for doing this that I call the rule of three. He's found that when oil prices quickly spike to a new three-year high, they can cause a damaging shock to the economy. That's because both businesses and consumers suddenly have to rapidly adjust their budgets, and often drastically cut spending. The rule of three is not a hard and fast law, but more a decent rule of thumb. It happens to describe what happened in 1979 fairly well. At the time, the only frame of reference anybody had for an oil crisis was the 1973 OPEC embargo. Nobody expected a repeat.
While oil prices are rising pretty quickly today, they're still close to where they reached during the Libyan revolution last year. They could go higher -- I'm not going to try and predict -- but at this point, even if it's painful, most Americans have an idea of how to cope with higher fuel costs. Back in 1979, it was still relatively new and frightening. Today, it's old hat.
If the president and his aides will tell easily disproven falsehoods about crowd sizes and speeches, what else will they be willing to dissemble about?
One of the many things that is remarkable about the Trump administration is its devotion, even in its first days, to a particular variety of pointless falsehood.
Mendacity among politicians and the spokespeople hired to spin for them runs across eras and aisles, though it is true that some are more honest than others, and Donald Trump was a historically dishonest presidential candidate. But the Trump administration has displayed a commitment to needlessly lying that is confounding to even the most cynical observers of American politics.
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
In his first official White House briefing, Sean Spicer blasted journalists for “deliberately false reporting,” and made categorical claims about crowd-size at odds with the available evidence.
In his first appearance in the White House briefing room since President Trump’s inauguration, Press Secretary Sean Spicer delivered an indignant statement Saturday night condemning the media’s coverage of the inauguration crowd size, and accusing the press of “deliberately false reporting.”
Standing next to a video screen that showed the crowd from President Trump’s vantage point, Spicer insisted that media outlets had “intentionally framed” their photographs to minimize its size. After attacking journalists for sharing unofficial crowd-size estimates—“no one had numbers,” he said—he proceeded to offer a categorical claim of his own. “This was the largest audience ever to witness an inauguration, period, both in person and around the globe,” he said, visibly outraged. “These attempts to lessen the enthusiasm of the inauguration are shameful and wrong.”
The new president’s first actions in office suggest his style from the trail isn’t going away soon.
Inaugurations are America’s modern equivalents of Roman triumphs. Flanked by military and police vehicles, clad in the pomp of tradition, presidents of the United States take their solemn oaths and parade between the classical facades and colonnades lining Pennsylvania Avenue. Crowds of thousands—sometimes millions—of citizens look on. It is meant to be a celebration of the nation in all her stately, martial honor, and of the vir triumphalis who has claimed the status of its moral leader and commander-in-chief. But inauguration is also a transition, not only between presidents, but from the combat of the campaign to the peacetime of governance.
For President Donald Trump, however, that transition has not yet taken place. On Inauguration Day, Trump did not take off the laurel wreath and transform into a governor, but rather extended his fiery campaign. The earliest hours of his presidency suggest that, dogged by unprecedented public disapproval, confronting questions of legitimacy, relying on a base fueled by partisan conflict, and facing extensive grassroots opposition, Trump’s campaign will be indefinite.
Popular demonstrations can bring change and topple governments. They can also spark retaliation from those in power.
The signs were so clever.
“We shall overcomb.”
“Viva la vulva.”
“I MAKE THE BEST SIGNS I REALLY DO EVERYONE SAYS SO THEY’RE TERRIFIC.”
Someone even made a papier-mâché vagina dentata.
The people were so cheerful and happy to be with one another, forgetting the cold and enjoying what often seemed less like a protest and more like a block party. There were families there, with grandmas in wheelchairs and babies in strollers. They were ecstatic and in disbelief at the number of people. TheWashington Post reported that the organizers put the attendance at up to half a million. They had hoped for less than half that.
It was surreal how similar this all felt, and my Russian friends on social media confirmed it: “Totally Bolotnaya,” one of them wrote. Bolotnaya is the square in the center of Moscow, right across the river from the Kremlin, where on December 10, 2011 around 50,000 people came out to protest fraudulent parliamentary elections. They had expected 3,000 and were stunned by their success. It was cold and gray that day, too, and the feeling of being in that joyous crowd was unforgettable, which is why I remembered it so vividly today. It is the giddiness of watching people vent their political frustrations with a sense of humor and good cheer, and the euphoria of observing people discover that they are not alone, that there are thousands and thousands of people just like them.
Images of today’s marches in Washington, New York, Denver, Chicago, Boston, Los Angeles, Seattle, and from other cities in England, Ghana, France, Canada, Serbia, Australia, Kenya, Germany, India, and many more.
In Washington, DC, today, hundreds of thousands of protesters filled the streets in a demonstration called the Women’s March on DC, while even more marched in cities across the United States and around the world, one day after the inauguration of President Donald J. Trump. Larger-than-expected crowds of women and their allies raised their voices against the new administration, and in support of women's rights, health issues, equality, diversity and inclusion. Below are images of today’s marches in Washington, New York, Denver, Chicago, Boston, Los Angeles, Seattle, and from other cities in England, Ghana, France, Canada, Serbia, Australia, Kenya, Germany, India, and many more.
Driven by opportunism, pragmatism, or fear, many begin to forget that they used to think certain things were unacceptable.
In The Captive Mind, Czeslaw Milosz tells a story about a man who ventures out in the immediate aftermath of the fall of a regime. Papers full of state secrets lie in the streets, their knowledge less important for the moment than that of where to find something to eat. A little boy plays in a bombed-out street, whistling a song about the leader. “The song remains, but the leader of yesterday is already part of an extinct past.”
When authoritarians fall from power, even if they are secretly mourned, they must be publicly forgotten. Yet they remain as traces within the bodies of their people. The muscle memory to salute, to sing their songs, to fear their wrath, can be hard to shake. My years of studying Mussolini and his two-decade long regime have taught me not to underestimate the individual and collective work of disentanglement that comes with the ruler’s fall from power.
A history of the first African American White House—and of what came next
In the waning days of President Barack Obama’s administration, he and his wife, Michelle, hosted a farewell party, the full import of which no one could then grasp. It was late October, Friday the 21st, and the president had spent many of the previous weeks, as he would spend the two subsequent weeks, campaigning for the Democratic presidential nominee, Hillary Clinton. Things were looking up. Polls in the crucial states of Virginia and Pennsylvania showed Clinton with solid advantages. The formidable GOP strongholds of Georgia and Texas were said to be under threat. The moment seemed to buoy Obama. He had been light on his feet in these last few weeks, cracking jokes at the expense of Republican opponents and laughing off hecklers. At a rally in Orlando on October 28, he greeted a student who would be introducing him by dancing toward her and then noting that the song playing over the loudspeakers—the Gap Band’s “Outstanding”—was older than she was.
Most presidents view inaugural addresses as a rare opportunity to appeal beyond “the base.” This was base-only.
For my sins, I have read every U.S. presidential inaugural address ever given, and played a small part in writing one of them—Jimmy Carter’s, delivered 40 years ago today.
The first one I remember hearing, John F. Kennedy’s in 1961, I saw on a fuzzy black-and-white TV from my 7th-grade American history classroom in California. The arctic conditions that day in Washington practically radiated through the TV screen. I remember seeing the revered 87-year-old poet Robert Frost hunch against the wind and squint in the low-sun glare as he tried to read the special inaugural ode he had composed. Then Richard Nixon, just defeated by Kennedy in a hair’s-breadth race, reached across to block the glare with his top hat. Frost waved him off and began reciting from memory one of his best-known poems, “The Gift Outright.” [Update: Other images suggest it could have been VP Lyndon Johnson who was offering Frost the hat. I didn’t really notice at the time; whoever it was, the lasting image was of Frost’s struggling with his script and then beginning to recite.]
In its first episode of the new administration, the NBC sketch show skewered Vladimir Putin, Kellyanne Conway, and the “lower-case KKK.”
Donald Trump didn’t make an appearance on the first Saturday Night Live of his presidency, at least not in the guise of his TV alter ego, Alec Baldwin’s pouting, preening impersonation. But Trump’s presence dominated the show, from the cold open featuring Beck Bennett as a joyful Vladimir Putin to a video skit in which Kate McKinnon’s Kellyanne Conway sang a musical tribute to her newfound fame. This much was clear: The NBC sketch show has no intention of easing up on the new commander-in-chief, and at times seemed to actively position itself as a force of resistance.
SNL’s determination to keep being a thorn in the side of the 45th president, who’s complained on Twitter that its portrayal of him is a “complete hit job,” was crystallized in the opening monologue of the January 21st episode, delivered by the comedian and first-time host Aziz Ansari. For almost nine minutes, Ansari pondered the new president (“He’s probably at home right now watching a brown guy make fun of him”), Islamophobia in the media, and the alt-right, which he dubbed the “lower-case KKK.”