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.
Black poverty is fundamentally distinct from white poverty—and so cannot be addressed without grappling with racism.
There have been a number of useful entries in the weeks since Senator Bernie Sanders declared himself against reparations. Perhaps the most clarifying comes from Cedric Johnson in a piece entitled, “An Open Letter To Ta-Nehisi Coates And The Liberals Who Love Him.” Johnson’s essay offers those of us interested in the problem of white supremacy and the question of economic class the chance to tease out how, and where, these two problems intersect. In Johnson’s rendition, racism, in and of itself, holds limited explanatory power when looking at the socio-economic problems which beset African Americans. “We continue to reach for old modes of analysis in the face of a changed world,” writes Johnson. “One where blackness is still derogated but anti-black racism is not the principal determinant of material conditions and economic mobility for many African Americans.”
As Coldplay blandly strained for the universal, she and Bruno Mars pulled off something more specific and more daring.
What a perfect Beyoncésong name: “Formation.” All great pop involves people acting in formation. So does all great change. And while fans scream that Beyoncé’s a “queen” and “goddess,” her core appeal really is as a drill sergeant. With Beyoncé in command, greatness is scalable, achievable, for the collective. Everyone waves their hands to the same beat. Everyone walks around like they have hot sauce in their bag.
But in pop and in politics, “everyone” is a loaded term. Stars as ubiquitous as Beyoncé have haters, the “albino alligators” who “Formation” informs us she twirls upon. And in a more general historical sense, “everyone” can be a dangerous illusion that elevates one point of view as universal while minimizing others. Beyoncé gets all of this, it seems. As a pop star, she surely wants to have as broad a reach as possible. But as an artist, she has a specific message, born of a specific experience, meaningful to specific people. Rather than pretend otherwise, she’s going to make art about the tension implied by this dynamic. She’s going to show up to Super Bowl with a phalanx of women dressed as Black Panthers.
Most people in the U.S. believe their country is going to hell. But they’re wrong. What a three-year journey by single-engine plane reveals about reinvention and renewal.
When news broke late last year of a mass shooting in San Bernardino, California, most people in the rest of the country, and even the state, probably had to search a map to figure out where the city was. I knew exactly, having grown up in the next-door town of Redlands (where the two killers lived) and having, by chance, spent a long period earlier in the year meeting and interviewing people in the unglamorous “Inland Empire” of Southern California as part of an ongoing project of reporting across America.
Some of what my wife, Deb, and I heard in San Bernardino before the shootings closely matched the picture that the nonstop news coverage presented afterward: San Bernardino as a poor, troubled town that sadly managed to combine nearly every destructive economic, political, and social trend of the country as a whole. San Bernardino went into bankruptcy in 2012 and was only beginning to emerge at the time of the shootings. Crime is high, household income is low, the downtown is nearly abandoned in the daytime and dangerous at night, and unemployment and welfare rates are persistently the worst in the state.
Will the Democratic Party nominate a candidate who hasn’t been a member of their party, and who has long denounced it?
When a party chooses its presidential candidate, it also chooses its party leader in the election. This year the Democrats face an unusual situation. Bernie Sanders isn’t just an outsider to the party establishment; he’s not even been a member of the party, and has long excoriated it in unsparing language. Although the media haven’t much focused on this history, the early signs suggest it could become a problem for Sanders in getting the nomination—and a problem for the party if he does get it.
According to the entrance polls at the Iowa caucuses, there was a 30-percentage-point split between self-identified Democrats and independents in their support for Sanders. Hillary Clinton won 56 percent of self-identified Democrats but only 26 percent of independents, while Sanders won only 39 percent of Democrats but 69 percent of independents.
In Homs, Syria, where entire city blocks have been reduced to rubble by years of civil war, a Syrian wedding photographer thought of using the destruction of the city as a backdrop for pictures of newlywed couples “to show that life is stronger than death.”
In Homs, Syria, where entire city blocks have been reduced to rubble by years of civil war, a Syrian wedding photographer thought of using the destruction of the city as a backdrop for pictures of newlywed couples “to show that life is stronger than death,” according to AFP photographer Joseph Eid. Here, Nada Merhi, 18, and her husband, Syrian army soldier Hassan Youssef, 27, pose for a series of wedding pictures amid heavily damaged buildings in Homs on February 5, 2016.
For decades the Man of Steel has failed to find his groove, thanks to a continual misunderstanding of his strengths.
Superman should be invincible. Since his car-smashing debut in 1938, he’s starred in at least one regular monthly comic, three blockbuster films, and four television shows. His crest is recognized across the globe, his supporting cast is legendary, and anybody even vaguely familiar with comics can recount the broad strokes of his origin. (The writer Grant Morrison accomplished it in eight words: “Doomed Planet. Desperate Scientists. Last Hope. Kindly Couple.”) He’s the first of the superheroes, a genre that’s grown into a modern mass-media juggernaut.
And yet, for a character who gains his power from the light of the sun, Superman is curiously eclipsed by other heroes. According to numbers provided by Diamond Distributors, the long-running Superman comic sold only 55,000 copies a month in 2015, down from around 70,000 in 2010—a mediocre showing even for the famously anemic comic-book market. That’s significantly less than his colleague Batman, who last year moved issues at a comparatively brisk 150,000 a month. Mass media hasn’t been much kinder: The longest-running Superman television show, 2001’s Smallville, kept him out of his iconic suit for a decade. Superman Returns recouped its budget at the box office, but proved mostly forgettable.2013’s Man of Steel drew sharp criticism from critics and audiences alike for its bleak tone and rampaging finale. Trailers for the sequel, Batman v Superman: Dawn of Justice, have shifted the focus (and top billing) to the Dark Knight. Worst of all, conventional wisdom puts the blame on Superman himself. He’s boring, people say; he’s unrelatable, nothing like the Marvel characters dominating the sales charts and the box office. More than anything, he seems embarrassing. Look at him. Truth? Justice? He wears his underwear on the outside.
One professor is borrowing a method from Harvard Business School to engage students and inspire better decision-making skills.
In a spacious classroom in Aldrich Hall on the Harvard Business School campus, 100 students are passionately discussing a case called “Battle Over a Bank.” But these aren’t MBA students deliberating over how much the government should regulate the financial sector. This group of mostly undergraduates, guided by the award-winning Harvard Business School professor David Moss, is diving into the fierce 1791 debate over whether the Constitution could be interpreted to allow the fledgling U.S. government the power to form a bank at all.
This class, “History of American Democracy,” is no pedestrian historical survey course. It uses the case method—the business school’s signature teaching technique—to immerse undergraduates (as well as a limited number of HBS students) in critical episodes in the development of American democracy.
A photo series reveals what expectant mothers in various countries bring with them to the hospital.
For most expecting mothers in the Western world, a hospital bag is something that makes the birthing process marginally more comfortable. You’ve just brought a new being into the world; you deserve to wear your own sweatpants.
But in some parts of the world, hospitals are so bare-bones that women in labor must tote everything with them, from rubber gloves to water pans to gauze.
To draw attention to the difficulty of giving birth in regions where water is scarce, the organization WaterAid recently dispatched photographers to ask expecting and brand-new moms in various countries to open up their hospital bags. Here are their photos, as well as lightly edited interviews with the moms conducted by WaterAid.
The trust people tend to feel toward others in the same ethnic, racial, and political groups makes them easy targets for scammers.
Last week’s ABC mini-series chronicled the most famous financial fraud in recent American history: Bernard Madoff’s $50 billion Ponzi scheme, which devastated elite institutions and families of the American Jewish community. The scale of Madoff’s crimes was breathtaking. There’s much to be said about his crimes—not least about the incompetence of the regulatory apparatus that failed to stop him despite repeated warnings and what researchers Greg Gregoriou and Francois Lhabitant quite appropriately called “a riot of red flags” over many years.
The former president’s heated assault on Bernie Sanders is a reminder of how the Clintons have long reacted to any opposition.
One of my oldest Hillary Clinton memories: Twenty-six years ago, I stood in the second-floor rotunda of the Arkansas Capitol half-listening to a news conference by Tom McRae, an earnest Democrat challenging Governor Bill Clinton for re-election. Then I heard it: Click. Clack. Click. Clack. Click. Clack.
The sound of Hillary Clinton’s low-heeled shoes on a hidden marble hallway jarred McRae, who in 1990 was Bill Clinton’s biggest obstacle to a fifth term and a presidential bid two years later. The first lady of Arkansas rounded the corner and stormed his news conference. “Tom!” she shouted. “I think we oughta get the record straight!”
Waving a sheaf of papers, Hillary Clinton undercut McRae’s criticism of her husband’s record by pointing to McRae’s past praise of the governor. It was a brutal sandbagging. “Many of the reports you issued not only praise the governor on his environmental record,” she said, “but his education and his economic record!”