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 scientists are all talking like it’s a sure thing.
On August 21, the “moon” will pass between the Earth and the sun, obscuring the light of the latter. The government agency NASA says this will result in “one of nature’s most awe-inspiring sights.” The astronomers there claim to have calculated down to the minute exactly when and where this will happen, and for how long. They have reportedly known about this eclipse for years, just by virtue of some sort of complex math.
This seems extremely unlikely. I can’t even find these eclipse calculations on their website to check them for myself.
Meanwhile the scientists tell us we can’t look at it without special glasses because “looking directly at the sun is unsafe.”
Participants in a “free speech” rally in Boston say they aren’t white nationalists, but claim there is a “war against whites” in America.
WOBURN, Mass. — Kyle Chapman was sitting in a dimly lit Irish pub about 20 minutes outside of Boston, where Saturday afternoon’s so-called “Free Speech Rally” had just been shut down by tens of thousands of counter-protesters.
“The white man is one of the most discriminated against people in this entire country right now,” he explained.
Chapman—a muscly right-wing organizer who went viral earlier this year after video footage showed him swinging a heavy wooden stick at liberal Berkley demonstrators—had been scheduled to speak at the rally on Boston Common. But organizers ended up pulling the plug early, he said, when the crowd of counter-protesters grew too large. After being escorted to safety by police, he and other attendees retired here to lick their (metaphorical) wounds.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
“Seeing a partial eclipse bears the same relation to seeing a total eclipse as kissing a man does to marrying him.”
Ever since it was first published in 1982, readers—including this one—have thrilled to “Total Eclipse,” Annie Dillard’s masterpiece of literary nonfiction, which describes her personal experience of a solar eclipse in Washington State. It first appeared in Dillard’s landmark collection, Teaching a Stone to Talk, and was recently republished in The Abundance, a new anthology of her work. The Atlantic is pleased to offer the essay in full, here, until the day after the ‘Great American Eclipse’ on August 21.
It had been like dying, that sliding down the mountain pass. It had been like the death of someone, irrational, that sliding down the mountain pass and into the region of dread. It was like slipping into fever, or falling down that hole in sleep from which you wake yourself whimpering. We had crossed the mountains that day, and now we were in a strange place—a hotel in central Washington, in a town near Yakima. The eclipse we had traveled here to see would occur early in the next morning.
Empty pedestals can offer the same lessons about racism and war that the statues do.
Six years before it would become the inspiration for bloody protests, the Robert E. Lee monument in Charlottesville, Virginia, was vandalized. The 2011 incident capped off my 11-year residency in the small city—where I’d taught high-school history and where my understanding of the legacy of the Civil War was nurtured. There was no better place to teach the Civil War than Charlottesville. Some of the most important battlefields in Richmond, Fredericksburg, and the Shenandoah Valley are within an hour’s drive. But it was the region’s monuments that played a central role in my teaching, and I believed they should be left alone.
I argued my position in an essay for The Atlantic: “For better or for worse, monuments to Confederate heroes are part of our story, but each of us can choose how to engage with these places. We can express outrage over their existence. We can alter them with statements of our own. Or we can let them be, appreciate their aesthetic qualities, and reflect carefully on their history.” I fell short on understanding what they still meant to some in the community. I didn’t realize that so many of my neighbors didn’t need further reflection at all.
How men and women digest differently, diet changes our skin, and gluten remains mysterious: A forward-thinking gastroenterologist on eating one's way to "gutbliss"
Robynne Chutkan, MD, is an integrative gastroenterologist and founder of the Digestive Center for Women, just outside of Washington, D.C. She trained at Columbia University and is on faculty at Georgetown, but her approach to practicing medicine and understanding disease is more holistic than many specialists with academic backgrounds. She has also appeared on The Dr. Oz Show (of which I’ve been openly skeptical in the past, because of Oz’s tendency to divorce his recommendations from evidence).
The aftermath of Charlottesville has brought up important questions about who should be speaking, and who should be listening.
In a 2012 article published in the Public Opinion Quarterly, a group of researchers shared the results of a study they had done in the aftermath of the 2008 U.S. presidential election. The researchers, based on panels with young voters, found that the impression of Sarah Palin that Tina Fey had made famous on Saturday Night Live—“I can see Russia from my house!”—had changed the public’s feeling about the actual vice-presidential candidate. Fey’s jokes, the researchers suggested, had proven comedy’s power, especially in times of question and perhaps also in times of crisis, to shape people’s sense of the world. The jokes had woven themselves into the workings of American democracy. The researchers called it the Fey Effect.
The legend of the Confederate leader’s heroism and decency is based in the fiction of a person who never existed.
The strangest part about the continued personality cult of Robert E. Lee is how few of the qualities his admirers profess to see in him he actually possessed.
Memorial Day has the tendency to conjure up old arguments about the Civil War. That’s understandable; it was created to mourn the dead of a war in which the Union was nearly destroyed, when half the country rose up in rebellion in defense of slavery. This year, the removal of Lee’s statue in New Orleans has inspired a new round of commentary about Lee, not to mention protests on his behalf by white supremacists.
The myth of Lee goes something like this: He was a brilliant strategist and devoted Christian man who abhorred slavery and labored tirelessly after the war to bring the country back together.
The nation’s current post-truth moment is the ultimate expression of mind-sets that have made America exceptional throughout its history.
When did America become untethered from reality?
I first noticed our national lurch toward fantasy in 2004, after President George W. Bush’s political mastermind, Karl Rove, came up with the remarkable phrase reality-based community. People in “the reality-based community,” he told a reporter, “believe that solutions emerge from your judicious study of discernible reality … That’s not the way the world really works anymore.” A year later, The Colbert Report went on the air. In the first few minutes of the first episode, Stephen Colbert, playing his right-wing-populist commentator character, performed a feature called “The Word.” His first selection: truthiness. “Now, I’m sure some of the ‘word police,’ the ‘wordinistas’ over at Webster’s, are gonna say, ‘Hey, that’s not a word!’ Well, anybody who knows me knows that I’m no fan of dictionaries or reference books.
Trump has again recirculated a debunked history about terrorism. But what the general was really doing in the Philippines can tell us something more important about America.
Another day, another sputtering orgy of confusion following a cryptic Donald Trump tweet. This one came Thursday, a few hours after a van plowed into a crowd on the Barcelona pedestrian mall of Las Ramblas, an attack claimed by the reeling Islamic State. The president replied, via iPhone:
Study what General Pershing of the United States did to terrorists when caught. There was no more Radical Islamic Terror for 35 years!
It seemed to be a reference to a story Trump told at campaign rallies during the 2016 primaries, which in turn was a garbled version of an Islamophobic meme that has made its way around the internet for years. In the fable, the legendary U.S. General John J. Pershing once ended a wave of Muslim terrorism in the Philippines by executing prisoners with bullets dipped in pigs’ blood. Other superstitious fighters were so terrified by the prospect of being killed while touching part of a forbidden animal, the story goes, that fighting immediately stopped, for some period of time. (For 25 years, Trump said at a North Charleston, South Carolina, rally in February 2016; a few weeks later, in Costa Mesa, California, it had jumped up to 42.)