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 Comey memos are more revealing than they seem.
One feature of the truth is that it doesn’t change much. A lie is hard to sustain. The details may change in each retelling because the liar is not actually remembering the events, but instead remembering the telling of the events. The truth, by contrast, is sticky. Consistency is not the only hallmark of truth—some people’s memories are better than other people’s memories, to be sure—but there’s a reason that inconsistency tends to discredit a witness.
If someone had told you a year ago, when news first broke that James Comey had made memos of his conversations with President Trump, that those memos would eventually come out and make little news, you probably wouldn’t have believed it. These memos are, after all, a big deal. They will play a major role in corroborating Comey’s story in the investigative setting.
Floyd Landis, a former teammate of the cyclist’s, just won more than $1 million in a legal case against Armstrong. Here are his thoughts on the suit, cycling, and his onetime rival.
At 5:19 p.m. on Friday, April 30, 2010, Floyd Landis hit send on what would prove the most consequential email of his life. Addressed to the then-CEO of USA Cycling, Steve Johnson, the email bore the subject line “nobody is copied on this one so it’s up to you to demonstrate your true colors….” It went on to detail, year by year, how Landis and other members of the United States Postal Service team had used illegal performance-enhancing drugs and methods to dominate the sport of cycling and claim victories at the sport’s premier event, the Tour de France. The email, later included in Landis’s 2012 affidavit for a United States Anti-Doping Agency (usada) investigation, clearly implicated many of his former teammates—most famously, the seven-time Tour winner Lance Armstrong (who declined to comment for this article).
The Trump administration shouldn’t get too excited about Kim Jong Un’s pledge to limit his weapons program.
Over the past four months, North Korea has been saying all the right things. After weeks of silence regarding his intentions for upcoming summits with South Korea and the United States, Kim Jong Un, the leader of North Korea, made a dramatic announcement on Saturday morning, pledging unilateral limits on his nuclear weapons and missile programs. Though the announcement has been widely hailed as encouraging—President Donald Trump declared it a sign of “big progress”—it does not, in fact, set up a path to denuclearization. It does, however, open the door to capping Kim’s arsenal, keeping America and its allies safer while talks are underway.
Speaking before the central committee of his country’s governing party, Kim described six so-called “decisions” on nuclear-weapons policy. These included a declaration that North Korea was satisfied with its existing nuclear warhead designs, and that it had discontinued all nuclear and intercontinental-range ballistic missile (ICBM) tests and closed its nuclear test site at Punggye Ri. Kim also announced that North Korea would suspend nuclear testing, and reiterated his commitment not to use nuclear weapons “unless there is [a] nuclear threat,” and to stop the proliferation of nuclear technology. In addition, he said that North Korea would concentrate on developing its economy and improving dialogue with neighboring countries.
For years he used fake identities to charm women out of hundreds of thousands of dollars. Then his victims banded together to take him down.
By the spring of 2016, Missi Brandt had emerged from a rough few years with a new sense of solidity. At 45, she was three years sober and on the leeward side of a stormy divorce. She was living with her preteen daughters in the suburbs of St. Paul, Minnesota, and working as a flight attendant. Missi felt ready for a serious relationship again, so she made a profile on OurTime.com, a dating site for people in middle age.
Among all the duds—the desperate and depressed and not-quite-divorced—a 45-year-old man named Richie Peterson stood out. He was a career naval officer, an Afghanistan veteran who was finishing his doctorate in political science at the University of Minnesota. When Missi “liked” his profile, he sent her a message right away and called her that afternoon. They talked about their kids (he had two; she had three), their divorces, their sobriety. Richie told her he was on vacation in Hawaii, but they planned to meet up as soon as he got back.
The psychological origins of waiting (... and waiting, and waiting) to work
Like most writers, I am an inveterate procrastinator. In the course of writing this one article, I have checked my e-mail approximately 3,000 times, made and discarded multiple grocery lists, conducted a lengthy Twitter battle over whether the gold standard is actually the worst economic policy ever proposed, written Facebook messages to schoolmates I haven’t seen in at least a decade, invented a delicious new recipe for chocolate berry protein smoothies, and googled my own name several times to make sure that I have at least once written something that someone would actually want to read.
Lots of people procrastinate, of course, but for writers it is a peculiarly common occupational hazard. One book editor I talked to fondly reminisced about the first book she was assigned to work on, back in the late 1990s. It had gone under contract in 1972.
It only took five minutes for Gavin Schmidt to out-speculate me.
Schmidt is the director of NASA’s Goddard Institute for Space Studies (a.k.a. GISS) a world-class climate-science facility. One day last year, I came to GISS with a far-out proposal. In my work as an astrophysicist, I’d begun researching global warming from an “astrobiological perspective.” That meant asking whether any industrial civilization that rises on any planet will, through their own activity, trigger their own version of a climate shift. I was visiting GISS that day hoping to gain some climate science insights and, perhaps, collaborators. That’s how I ended up in Gavin’s office.
Just as I was revving up my pitch, Gavin stopped me in my tracks.
A memorial for the slaves of Guadeloupe has become a flashpoint for still-unresolved social and economic grievances.
Long before it became the first slavery memorial in the French West Indies, the Darboussier Sugar Factory powered France’s Caribbean empire. In the 19th century, the 77,000-square-foot factory, located in Pointe-à-Pitre, the largest city on the butterfly-shaped island of Guadeloupe,exported goods produced by slaves to mainland France. In the process, it transformed the Lesser Antilles from a forgotten tropic into an economic El Dorado. Today, the factory, which was abandoned after France officially abolished slavery in its colonies in 1848, is known as Memorial ACTe. Strings of quartz, meant to represent the lost souls of the slave trade, crawl up its black-box-like exterior, embodying what has become the memorial’s unofficial motto: Memory Inspires the Future.
Ross Douthat's views on the pope are intensely unpopular. But has he identified a fundamental tension in the Church?
Across every continent, in every country, Catholics “find themselves divided against one another,” writes the New York Times columnist Ross Douthat in his new book, To Change the Church. On one side stand the orthodox, who see doctrine and tradition as the best antidote to a changing world. On the other stand the liberals, who yearn for a Church that focuses on pastoring rather than enforcing rigid rules. This “widening theological and moral gulf,” Douthat argues, is potentially “wider than the chasm that separated Catholicism from Orthodoxy, and later from Lutheranism and Calvinism.”
That’s a bold claim to make. After all, the schisms of East and West, Catholic and Protestant, were world-shaking, often bloody events. But in today’s Church—and specifically in this pope—Douthat sees the possibility that the Roman Catholic Church will once again break apart.
“We’ve always joked about this, but holy crap, this man actually did it.”
Earlier this May, Gregory Holt had just finished doing the morning rounds at Miami’s Jackson Memorial Hospital, when he got a call about a new patient in the emergency room. He went down with seven colleagues to find an unconscious 70-year-old man with breathing problems and signs of septic shock. He was alone and had no identification. His blood was full of alcohol, and its pressure was dropping. And when the doctors peeled back his shirt, they found a tattoo, running along his collarbones.
It said: DO NOT RESUSCITATE.
The NOT was underlined. There was a signature under the final word.
Holt was shocked. “We’ve always joked about this, but holy crap, this man actually did it,” he says. “You look at it, laugh a little, and then go: Oh no, I actually have to deal with this.”