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.
The talk-radio host claims that he never took Donald Trump seriously on immigration. He neglected to tell his immigration obsessed listeners.
For almost a decade, I’ve been angrily documenting the way that many right-wing talk-radio hosts betray the rank-and-file conservatives who trust them for information. My late grandmother was one of those people. She deserved better than she got. With huge platforms and massive audiences, successful hosts ought to take more care than the average person to be truthful and avoid misinforming listeners. Yet they are egregiously careless on some days and willfully misleading on others.
And that matters, as we’ll come to see.
Rush Limbaugh is easily the most consequential of these hosts. He has an audience of millions. And over the years, parts of the conservative movement that ought to know better, like the Claremont Institute, have treated him like an honorable conservative intellectual rather than an intellectually dishonest entertainer. The full cost of doing so became evident this year, when a faction of populists shaped by years of talk radio, Fox News, and Breitbart.com picked Donald Trump to lead the Republican Party, a choice that makes a Hillary Clinton victory likely and is a catastrophe for movement conservatism regardless of who wins.
Which is a different way of asking: Can a bot commit libel?
Facebook set a new land-speed record for situational irony this week, as it fired the people who kept up its “Trending Topics” feature and replaced them with an algorithm on Friday, only to find the algorithm promoting completely fake news on Sunday.
Rarely in recent tech history has a downsizing decision come back to bite the company so publicly and so quickly.
Practices meant to protect marginalized communities can also ostracize those who disagree with them.
Last week, the University of Chicago’s dean of students sent a welcome letter to freshmen decrying trigger warnings and safe spaces—ways for students to be warned about and opt out of exposure to potentially challenging material. While some supported the school’s actions, arguing that these practices threaten free speech and the purpose of higher education, the note also led to widespread outrage, and understandably so. Considered in isolation, trigger warnings may seem straightforwardly good. Basic human decency means professors like myself should be aware of students’ traumatic experiences, and give them a heads up about course content—photographs of dead bodies, extended accounts of abuse, disordered eating, self-harm—that might trigger an anxiety attack and foreclose intellectual engagement. Similarly, it may seem silly to object to the creation of safe spaces on campus, where members of marginalized groups can count on meeting supportive conversation partners who empathize with their life experiences, and where they feel free to be themselves without the threat of judgment or censure.
Like a little white Lazarus with red eyes, the paralyzed mouse was walking again.
A few days earlier, the mouse had been sprawled on an operating table while two Chinese graduate students peered through a microscope and operated on its spine. With a tiny pair of scissors, they removed the top half of a fingernail-thin vertebra, exposing a gleaming patch of spinal-cord tissue. It looked like a Rothko, a clean ivory rectangle bisected by a red line. Cautiously—the mouse occasionally twitched—they snipped the red line (an artery) and tied it off. Then one student reached for a $1,000 scalpel with a diamond blade so thin that it was transparent. With a quick slice of the spinal cord, the mouse’s back legs were rendered forever useless.
Many asset-management companies fear a program that would reduce something they depend on: consumers’ confusion.
Today, half of American households have exactly zero retirement savings, not counting traditional pension plans, which are becoming ever less common, or Social Security. There are two basic reasons for this distressing state of affairs. The first is that many families don’t make enough to cover their basic living expenses. The second is that even people who could put money aside often don’t have easy access to retirement savings programs—which is particularly the case for workers whose employers don’t offer any kind of retirement plan.
To address this second problem, several states are experimenting with public programs that automatically enroll employees in a retirement plan if their employer doesn’t offer one. California’s plan (which still must be finalized after different versions passed the two houses of the state legislature last week) would automatically cover anyone who works at a company with five or more employees. By default, each participant would save 3 percent of her income, but workers would have the choice to change their contribution percentage or to opt out altogether.
A look back at one of Gene Wilder’s most memorable roles, in a film that is as much about technology as it is about childhood
The lesson you learn right away, when you are a small child who has devoured a heap of Roald Dahl books, is that childhood is dark and dangerous—and yet still an adventure worth taking. In Dahl’s simultaneously sinister and gloriumptious worlds, to use one of his many invented adjectives, breaking the rules can yield both great rewards and terrible punishment.
Navigating this not-always-straightforward relationship between what people deserve and what they get is part of growing up. It’s also a central theme in one of Dahl’s most beloved books, Charlie and the Chocolate Factory, and an idea explored thoroughly by Willy Wonka, the quirky candy maker at the center of the story.
Gene Wilder, in his outstanding portrayal of Wonka in the 1971 adaptation of Dahl’s 1964 tale, captures this theme by oscillating between sincerity and deadpan sarcasm with unnerving grace. Wilder, who died Monday morning at age 83, was so well suited for the role that his Wonka seems to have sprung to the silver screen directly from Dahl’s mind. (It’s somewhat disorienting, then, to return to Dahl’s physical description of Wonka as a little man with a black goatee and quick squirrel-like movements—none of which is evident in Wilder’s portrayal—though Wilder exactly fits Dahl’s version of a Wonka with blue eyes “marvelously bright... sparkling and twinkling at the same time.”)
The 49ers quarterback’s decision to sit during the national anthem is being framed by some as an affront to the American military.
In a recent episode of Hard Knocks, an HBO series that follows one team a year through the rigors of an NFL training camp, the Los Angeles Rams head coach Jeff Fisher called a team-wide meeting that covered the protocol for the national anthem. Fisher gravely and emphatically explained the rules to the roughly 60 assembled men. Helmets belong under the left arm, he declared, and feet on the white of the sideline. “It’s a respect thing,” he said. “It’s a self-respect thing, it’s respect for your teammates, it’s respect for this game, and it’s respect for this country.” Fisher proceeded to show the group footage of a past Rams team following the procedures and, turning to face the screen himself in the silence of the room, said, “That’s how you start a game.”
Paul LePage suggested he might resign amidst an uproar that began when he blamed blacks and Hispanics for his state’s heroin epidemic and endorsed racial profiling.
For years, it seemed like no outrageous remark was too far for Paul LePage. That is, there was practically nothing he would not say; and there was no indication that his ever more erratic remarks carried a political cost. But now the Maine governor may have pushed his luck too far.
During a radio interview Tuesday morning, LePage implied that he might resign. “I’m looking at all options,” he said. “I think some things I’ve been asked to do are beyond my ability. I’m not going to say that I’m not going to finish it. I’m not saying that I am going to finish it.”
It’s a remarkable moment for the Republican, who has made his reputation by offering up outlandish and often plainly offensive comments. The story began in January, when LePage complained that “guys by the name D-Money, Smoothie, Shifty … come from Connecticut and New York. They come up here, they sell their heroin, then they go back home. Incidentally, half the time they impregnate a young, white girl before they leave.”
As pay TV slowly declines, cable news faces a demographic cliff. And nobody has further to fall than the merchant of right-wing outrage.
Updated at 12:05 p.m.
October 7, 2016, will be the 20th birthday of the Fox News Channel, and at the moment, the network is experiencing the soap-operatic highs and lows typical of any teenager on television. In many ways, the summer of 2016 may go down in Fox News history as the company’s nadir. Its founder and leader Roger Ailes has been dishonorably dispatched, the remaining executives are dealing with a flurry of sexual harassment lawsuits, and one of its most public faces, Sean Hannity, has ignominiously remodeled himself as a gutless Trump whisperer.
And yet Fox News’ fortunes are ascendant, at least in the most quantifiable sense. The network’s annual profit in 2015 soared by about 20 percent. For the first time ever, Fox News has been the most-watched cable network among both primetime and daytime viewers for several months, with a larger audience than its nominal rivals, CNN and MSNBC, combined. Led by “The O'Reilly Factor,” Fox News doesn’t just have the best-rated news show on cable television; according to The Wrap, it has the 13 best-rated news shows on cable television.
The meaning of HBO’s hypnotic miniseries lay in its characters’ eyes.
One of the most memorable images of The Night Of, the now-concluded HBO miniseries that seemed only to ever deal in memorable images, was among its simplest. In Sunday’s finale, the lawyer John Stone (John Turturro) presented his client Nasir Khan (Riz Ahmed) with the difficult decision of whether to report his other lawyer, Chandra (Amara Karan), for kissing Naz. Doing so could result in a mistrial—which could be a good thing for Naz, but would ruin Chandra’s career.
Naz said almost nothing as he listened to Stone. But his eyes were steadily focused, glassy, reflecting the white light of a window across the room. “What do you care, you like her like you like Andrea?” Stone asked, referring to Chandra and the woman Naz is accused of killing. He told Naz to think about looking in the mirror, 20 years from now, regretting his choice today.