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.
Hillary Clinton and Donald Trump prepare for the final sprint to Election Day.
It’s Wednesday, October 26—the election is now less than two weeks away. Hillary Clinton holds a lead against Donald Trump, according to RealClearPolitics’ polling average. We’ll bring you the latest updates from the trail as events unfold. Also see our continuing coverage:
A dustup between Megyn Kelly and Newt Gingrich shows why Donald Trump and the Republican Party are struggling to retain the support of women.
The 2016 presidential campaign kicked off in earnest with a clash between Megyn Kelly and Donald Trump over gender and conservatism at the first GOP debate, and now there’s another Kelly moment to bookend the race.
Newt Gingrich, a top Trump surrogate, was on Kelly’s Fox News show Tuesday night, jousting with her in a tense exchange stretching over nearly eight minutes. Things got off to a promising start when Gingrich declared that there were two “parallel universes”—one in which Trump is losing and one in which he is winning. (There is data, at least, to support the existence of the former universe.) After a skirmish over whether polls are accurate, Kelly suggested that Trump had been hurt by the video in which he boasts about sexually assaulting women and the nearly a dozen accusations lodged against him by women since. Gingrich was furious, embarking on a mansplaining riff in which he compared the press to Pravda and Izvestia for, in his view, overcovering the allegations.
Evangelicals at the school are tired of politics—and the party that gave them Trump.
LYNCHBURG, Va.—When Jerry Falwell founded Liberty University in 1971, he dreamed of transforming the United States. As heput it, “We’re turning out moral revolutionaries.”
Forty-five years later, the school formerly known as Liberty Baptist College has become a kingmaker and bellwether in the Republican Party. Politicians routinely make pit stops in Lynchburg; Ted Cruz even launched his ill-fated presidential campaign from Liberty’s campus in March of 2015.
That’s why it was such a big deal when, two weeks ago, a group of Liberty students put out a letter explaining why they’re standing against the Republican presidential nominee. Jerry Falwell Jr., who has run the school since his father died in 2007, announced his support for Donald Trump back in January, and he has since spoken on the candidate’s behalf in interviews and at events. “We are Liberty students who are disappointed with President Falwell’s endorsement and are tired of being associated with one of the worst presidential candidates in American history,” the students wrote. “Donald Trump does not represent our values and we want nothing to do with him.”
With the candidate flailing in the polls, some on the right are wondering if a better version of the man wouldn’t be winning. But that kinder, gentler Trump would’ve lost in the primaries.
Last week, Peggy Noonan argued in the Wall Street Journal that an outsider like Donald Trump could’ve won handily this year, touting skepticism of free trade and immigration, if only he was more sane, or less erratic and prone to nasty insults:
Sane Donald Trump would have looked at a dubious, anxious and therefore standoffish Republican establishment and not insulted them, diminished them, done tweetstorms against them. Instead he would have said, “Come into my tent. It’s a new one, I admit, but it’s yuge and has gold faucets and there’s a place just for you. What do you need? That I be less excitable and dramatic? Done. That I not act, toward women, like a pig? Done, and I accept your critique. That I explain the moral and practical underpinnings of my stand on refugees from terror nations? I’d be happy to. My well-hidden secret is that I love everyone and hear the common rhythm of their beating hearts.” Sane Donald Trump would have given an anxious country more ease, not more anxiety. He would have demonstrated that he can govern himself. He would have suggested through his actions, while still being entertaining, funny and outsize, that yes, he understands the stakes and yes, since America is always claiming to be the leader of the world—We are No. 1!—a certain attendant gravity is required of one who’d be its leader.
A society that glorifies metrics leaves little room for human imperfections.
A century ago, a man named Frederick Winslow Taylor changed the way workers work. In his book The Principles of Scientific Management, Taylor made the case that companies needed to be pragmatic and methodical in their efforts to boost productivity. By observing employees’ performance and whittling down the time and effort involved in doing each task, he argued, management could ensure that their workers shoveled ore, inspected bicycle bearings, and did other sorts of “crude and elementary” work as efficiently as possible. “Soldiering”—a common term in the day for the manual laborer’s loafing—would no longer be possible under the rigors of the new system, Taylor wrote.
The principles of data-driven planning first laid out by Taylor—whom the management guru Peter Drucker once called the “Isaac Newton … of the science of work”—have transformed the modern workplace, as managers have followed his approach of assessing and adopting new processes that squeeze greater amounts of productive labor from their employees. And as the metrics have become more precise in their detail, their focus has shifted beyond the tasks themselves and onto the workers doing those tasks, evaluating a broad range of their qualities (including their personality traits) and tying corporate carrots and sticks—hires, promotions, terminations—to those ratings.
Trump’s greatest gift to the GOP may be the distraction he’s provided from other party meltdowns.
Even though 2016 appears to be the year of painful, public disqualification from higher office, you may be forgiven for not noticing the extraordinary implosion of New Jersey Governor Chris Christie. After all, the Trump surrogate and White House Transition chair has benefitted from his early endorsement of the Republican presidential nominee in unusual fashion: Christie’s power in the Grand Ole Party has decreased, rather than increased. The likelihood of a plum position in the Trump administration—Attorney General, perhaps, since Christie was spurned as the Republican running mate—is decidedly dim, what with the presently apocalyptic predictions about November 8.
Instead, Trump’s gift to Christie has been shadow: the top Republican’s national meltdown has obscured that of the one-time rising Republican star and sitting New Jersey governor. But make no mistake—Christie’s is a fall of epic proportions, precipitated by an unfathomably petty revenge plot. The contrast of the two, the top-heavy-ness of the fallout compared to the insignificance of the initial transgression, would be comic, were it not so tragic. Remember that in November of 2012, Governor Christie had a 72 percent approval rating. Today, it stands at 21 percent.
Services like Tinder and Hinge are no longer shiny new toys, and some users are starting to find them more frustrating than fun.
“Apocalypse” seems like a bit much. I thought that last fall when Vanity Fair titled Nancy Jo Sales’s article on dating apps “Tinder and the Dawn of the ‘Dating Apocalypse’” and I thought it again this month when Hinge, another dating app, advertised its relaunch with a site called “thedatingapocalypse.com,” borrowing the phrase from Sales’s article, which apparently caused the company shame and was partially responsible for their effort to become, as they put it, a “relationship app.”
Despite the difficulties of modern dating, if there is an imminent apocalypse, I believe it will be spurred by something else. I don’t believe technology has distracted us from real human connection. I don’t believe hookup culture has infected our brains and turned us into soulless sex-hungry swipe monsters. And yet. It doesn’t do to pretend that dating in the app era hasn’t changed.
Years of racial profiling and ignoring a federal judge’s order to stop his immigration sweeps may have finally caught up.
Joe Arpaio has reigned as Sheriff of Arizona’s largest county, Maricopa, since 1993, when Latinos made up less than a fifth of the state’s population. In this time, he has forced prisoners to wear pink underwear, don striped black-and-white jumpsuits, work chain gangs, and serve time beneath the desert sun in Army-surplus tents. He calls it his “concentration camp.” Most famously, he has dispatched his deputies to largely Latino neighborhoods where officers arrest people with the goal of checking their immigration status, then queue them up for deportation. It is for continuing these immigration sweeps against a federal judge’s injunction that Arpaio was officially charged Tuesday with misdemeanor contempt of court.
In the 1970s, a new wave of post-Watergate liberals stopped fighting monopoly power. The result is an increasingly dangerous political system.
It was January 1975, and the Watergate Babies had arrived in Washington looking for blood. The Watergate Babies—as the recently elected Democratic congressmen were known—were young, idealistic liberals who had been swept into office on a promise to clean up government, end the war in Vietnam, and rid the nation’s capital of the kind of corruption and dirty politics the Nixon White House had wrought. Richard Nixon himself had resigned just a few months earlier in August. But the Watergate Babies didn’t just campaign against Nixon; they took on the Democratic establishment, too. Newly elected Representative George Miller of California, then just 29 years old, announced, “We came here to take the Bastille.”
Biology textbooks tell us that lichens are alliances between two organisms—a fungus and an alga. They are wrong.
In 1995, if you had told Toby Spribille that he’d eventually overthrow a scientific idea that’s been the stuff of textbooks for 150 years, he would have laughed at you. Back then, his life seemed constrained to a very different path. He was raised in a Montana trailer park, and home-schooled by what he now describes as a “fundamentalist cult.” At a young age, he fell in love with science, but had no way of feeding that love. He longed to break away from his roots and get a proper education.
At 19, he got a job at a local forestry service. Within a few years, he had earned enough to leave home. His meager savings and non-existent grades meant that no American university would take him, so Spribille looked to Europe.