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.
In the final days of the Obama administration, scholars and journalists took stock of all that he had done to combat the dangerous rise of climate change. Barack Obama, they pronounced, had built up a surprisingly vast array of climate-concerned rules and guidelines across the government. He had turned the many policy-making tools of the many federal agencies toward preparing for this one imminent disaster.
Well, that was then.
On Tuesday, President Donald Trump will sign an executive order that will demolish his predecessor’s attempts to slow the pace of climate change. It is an omnibus directive that strikes across the federal government, reversing major rules that aim to restrict greenhouse-gas emissions while simultaneously instructing departments to ignore or downplay the risks of climate change in their decision-making.
Years of misleading coverage left viewers so misinformed that many were shocked when confronted with the actual costs of repeal.
As the Republican Party struggled and then failed to repeal and replace Obamacare, pulling a wildly unpopular bill from the House without even taking a vote, a flurry of insightful articles helped the public understand what exactly just happened. Robert Draper explained the roles that Stephen Bannon, Paul Ryan, and others played in deciding what agenda items President Trump would pursue in what order. Politicoreported on how and why the House Freedom Caucus insisted that the health care bill repeal even relatively popular parts of Obamacare. Lest anyone pin blame for the GOP’s failure on that faction, Reihan Salam argued persuasively that responsibility rests with poor leadership by House Speaker Paul Ryan and a GOP coalition with “policy goals that simply can’t be achieved.”
Democrats want the chair of the committee looking into collusion between the Trump administration and Russia to recuse himself, and hearings have ground to a halt for the moment.
Embattled House Intelligence Committee chairman Devin Nunes is now facing Democratic calls for his recusal from an investigation into the Trump administration’s ties to Russia, as the inquiry grinds to what is at least a temporary halt.
The California Republican has been on the hot seat since announcing last week that he had vague but significant information about “incidental collection” of information about Trump transition team members by U.S. intelligence agencies. “Incidental collection” is when the communications of someone who is not the target of surveillance are picked up because they are corresponding with a target.
President Trump may feel liberated to pursue tax reform after the failure on health care. But the GOP’s to-do list in Congress only gets harder from here.
“In a way I’m glad I got it out of the way,” President Trump told the Washington Post last week in the moments after he and Republican leaders in Congress pulled the plug on their first major legislative priority, repealing and replacing the Affordable Care Act.
Health care was hard. Really hard. “Nobody knew that health care could be so complicated,” the president had said in a now-infamous quote. The health-care legislation was pulled without a vote last week after House Speaker Paul Ryan told the president there were not enough votes from Republicans to pass it.
The implication of Trump’s musings about the difficulty of passing complicated health-care legislation is that he believes the rest of his agenda will be much easier. Tax cuts? Everybody like tax cuts. The legendary border wall. More defense spending. A big, bipartisan infrastructure bill.
Donald Trump observed that health care policy is “so complicated.” The next item on his agenda, tax policy, will be just as knotty.
“Health care is a very, very complicated issue,” Treasury Secretary Steve Mnuchin said last week in an interview with Mike Allen at Axios. “[Tax reform’s] a lot simpler.”
America’s health-care industry is roughly one-sixth of the economy, or about $3 trillion. U.S. federal tax revenue is roughly one-sixth of the economy, or about $3 trillion. Health care is a complex national cross-subsidy, where, for example, the healthy support the sick. Taxes are a national cross-subsidy, where, for example, workers support retirees. With health care, Americans interact with with an amorphous institution, with a maze of entrenched interests, in which they ultimately just want access to an excellent bundle of services at an affordable price. With the federal government, Americans interact with ... okay, I think you get the point.
The rise of faith-based counseling in America’s most Christian regions has brought the clash over religious liberties to the therapist’s couch.
In the lead-up to the 2016 presidential election, life in the town of Easley, South Carolina, was tense for Leigh Drexler. Pick-up trucks with airborne Confederate flags seemed more prevalent than ever before, and her grandparents—who had never voted in their lives—registered to cast their ballots for the Donald himself.
Drexler felt isolated. “My family has always directed their point of view at me, but it has been a million times worse than normal,” she told me last October. “Every time we’re in a conversation, it’s either about the election or religion.”
It’s a dynamic that led Drexler, who identifies as a democratic socialist and an atheist, to go online in search of a therapist—someone who would perhaps better understand her lack of faith. She scouted towns within a 20-mile radius, but only “faith-based” practitioners turned up. She resorted to distance counseling over the phone with a therapist a few states away. “I knew there would be Christian counselors here, but I didn’t think that was all I was going to find,” she said.
The College Board earns over half of all its revenues from the courses—and, in an uncertain environment, students keep being suckered.
Fraudulent schemes come in all shapes and sizes. To work, they typically wear a patina of respectability. That's the case with Advanced Placement courses, one of the great frauds currently perpetrated on American high-school students.
That's a pretty strong claim, right? You bet. But why not be straightforward when discussing a scam the scale and audacity of which would raise Bernie Madoff's eyebrows?
The miscellany of AP courses offered in U.S. high schools under the imprimatur of the College Board probably started with good intentions. The idea, going back to the 1950s, was to offer college-level courses and exams to high-school students. The courses allegedly provide students the kind of rigorous academic experience they will encounter in college as well as an opportunity to earn college credit for the work.
In Europe, a reproductive rights issue yields an unlikely partnership.
Conservative Catholics and left-wing feminists often find each other on opposite sides of political debates, especially when it comes to what women should do with their bodies. Yet in Europe, there is a reproductive rights issue on which the Catholic Church, well-known for its staunch pro-life position, is finding common ground with pro-choice feminists: surrogacy.
The practice whereby a woman carries a pregnancy to term for third parties is legal in the United States and Canada, but not in most of Western Europe. Some countries, like France, Germany, Spain, Italy, and Sweden, have banned surrogacy outright. Others, such as the United Kingdom, don’t have specific laws against surrogacy, but recognize the woman who gives birth to a child as the legal mother, making any surrogate agreements unenforceable. The European Parliament rejected surrogacy in a 2015 non-binding resolution.
The NBC reality singing competition has been selling glittering visions of fame for 11 seasons, but has rarely delivered on them.
The Voice’s auditions are some of the best reality TV you can watch. Early in each new season of the NBC show, celebrity coaches will listen to contestants sing with their backs turned. If coaches like what they hear and want to recruit someone for their “team,” they press a button, and their giant red chair spins around for a grand reveal. (If more than one turns, the contestant gets to pick his or her coach.) I see those chairs a-swivelin’ in a commercial, and I can’t resist Hulu-binging several hour-and-a-half-long episodes of these blind auditions.
Still, I’ve never made it through an entire season of The Voice. I get enticed by the auditions, and usually stick around through both the battle and the knockout rounds, when coaches pair members of their teams in head-to-head sing-offs. But I always stop watching during the bloated live shows, where couch potatoes actually get to vote for their favorite singers. At that point it’s just American Idol-style voting in broadcasts padded with backstage fashion and performances by the coaches, and oh-so-many commercials between contestant performances, and the unique energy has faded. By this, the 12th season, I should really know better.
The Sony World Photography Awards has announced the winners of its Open categories and National categories for 2017.
The Sony World Photography Awards, an annual competition hosted by the World Photography Organisation, has announced the winners of its Open categories and National categories for 2017. This year's contest attracted 227,596 entries from 183 countries. The organizers have again been kind enough to share some of the winners and runners-up with us, gathered below. All captions below come from the photographers.