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.
Angela Merkel has served formal notice that she will lead the German wandering away from the American alliance.
Seven years after the end of the Second World War, on the 10th of March 1952, the governments of the United States, the United Kingdom, France, and the newly established Federal Republic of Germany received an astounding note from the Soviet Union.
The Soviet Union offered to withdraw the troops that then occupied eastern Germany and to end its rule over the occupied zone. Germany would be reunited under a constitution that allowed the country freedom to choose its own social system. Germany would even be allowed to rebuild its military, and all Germans except those convicted of war crimes would regain their political rights. In return, the Allied troops in western Germany would also be withdrawn—and reunited Germany would be forbidden to join the new NATO alliance.
Should you drink more coffee? Should you take melatonin? Can you train yourself to need less sleep? A physician’s guide to sleep in a stressful age.
During residency, Iworked hospital shifts that could last 36 hours, without sleep, often without breaks of more than a few minutes. Even writing this now, it sounds to me like I’m bragging or laying claim to some fortitude of character. I can’t think of another type of self-injury that might be similarly lauded, except maybe binge drinking. Technically the shifts were 30 hours, the mandatory limit imposed by the Accreditation Council for Graduate Medical Education, but we stayed longer because people kept getting sick. Being a doctor is supposed to be about putting other people’s needs before your own. Our job was to power through.
The shifts usually felt shorter than they were, because they were so hectic. There was always a new patient in the emergency room who needed to be admitted, or a staff member on the eighth floor (which was full of late-stage terminally ill people) who needed me to fill out a death certificate. Sleep deprivation manifested as bouts of anger and despair mixed in with some euphoria, along with other sensations I’ve not had before or since. I remember once sitting with the family of a patient in critical condition, discussing an advance directive—the terms defining what the patient would want done were his heart to stop, which seemed likely to happen at any minute. Would he want to have chest compressions, electrical shocks, a breathing tube? In the middle of this, I had to look straight down at the chart in my lap, because I was laughing. This was the least funny scenario possible. I was experiencing a physical reaction unrelated to anything I knew to be happening in my mind. There is a type of seizure, called a gelastic seizure, during which the seizing person appears to be laughing—but I don’t think that was it. I think it was plain old delirium. It was mortifying, though no one seemed to notice.
She lived with us for 56 years. She raised me and my siblings without pay. I was 11, a typical American kid, before I realized who she was.
The ashes filled a black plastic box about the size of a toaster. It weighed three and a half pounds. I put it in a canvas tote bag and packed it in my suitcase this past July for the transpacific flight to Manila. From there I would travel by car to a rural village. When I arrived, I would hand over all that was left of the woman who had spent 56 years as a slave in my family’s household.
The condition has long been considered untreatable. Experts can spot it in a child as young as 3 or 4. But a new clinical approach offers hope.
This is a good day, Samantha tells me: 10 on a scale of 10. We’re sitting in a conference room at the San Marcos Treatment Center, just south of Austin, Texas, a space that has witnessed countless difficult conversations between troubled children, their worried parents, and clinical therapists. But today promises unalloyed joy. Samantha’s mother is visiting from Idaho, as she does every six weeks, which means lunch off campus and an excursion to Target. The girl needs supplies: new jeans, yoga pants, nail polish.
Listen to the audio version of this article:Download the Audm app for your iPhone to listen to more titles.
At 11, Samantha is just over 5 feet tall and has wavy black hair and a steady gaze. She flashes a smile when I ask about her favorite subject (history), and grimaces when I ask about her least favorite (math). She seems poised and cheerful, a normal preteen. But when we steer into uncomfortable territory—the events that led her to this juvenile-treatment facility nearly 2,000 miles from her family—Samantha hesitates and looks down at her hands. “I wanted the whole world to myself,” she says. “So I made a whole entire book about how to hurt people.”
It’s known as a modern-day hub of progressivism, but its past is one of exclusion.
PORTLAND, Ore.— Victor Pierce has worked on the assembly line of a Daimler Trucks North America plant here since 1994. But he says that in recent years he’s experienced things that seem straight out of another time. White co-workers have challenged him to fights, mounted “hangman’s nooses” around the factory, referred to him as “boy” on a daily basis, sabotaged his work station by hiding his tools, carved swastikas in the bathroom, and written the word “nigger” on walls in the factory, according to allegations filed in a complaint to the Multnomah County Circuit Court in February of 2015.
Pierce is one of six African Americans working in the Portland plant whom the lawyer Mark Morrell is representing in a series of lawsuits against Daimler Trucks North America. The cases have been combined and a trial is scheduled for January of 2017.
The permissiveness of Republican leaders who acquiesce to violence, collusion, and corruption is encouraging more of the same.
In the annals of the Trump era, May 25, 2017, will deserve a special mark. Four remarkable things happened on Thursday, each of which marks a way that this presidency is changing the nation.
The first remarkable thing was President Trump’s speech at the NATO summit in Brussels. Many European governments had hoped—which is a polite way to say that they had suggested and expected—that Trump would reaffirm the American commitment to defend NATO members if attacked. This is the point of the whole enterprise after all! Here’s how it was done by President Obama at the NATO summit after the Russian invasion of Crimea:
First and foremost, we have reaffirmed the central mission of the Alliance. Article 5 enshrines our solemn duty to each other—“an armed attack against one … shall be considered an attack against them all.” This is a binding, treaty obligation. It is non-negotiable. And here in Wales, we’ve left absolutely no doubt—we will defend every Ally.
Some firm handshakes, forced smiles, and awkward sword dances. In short, nothing.
Let’s hear it for the Rainbow Tour It’s been an incredible success
We weren’t quite sure, we had a few doubts
Will Evita win through?
But the answer is yes
There you are, I told you so
Makes no difference where she goes
The whole world over just the same
Just listen to them call her name
And who would underestimate the actress now?
—Andrew Lloyd Webber and Tim Rice, Evita
Like Donald Trump, Juan and Eva Perón were populists. They seem to have shared Trump’s understanding of the purposes of philanthropy (for more, read up about the Eva Perón Foundation) and the importance of fiscal probity. And like Eva in 1947, Donald Trump has just completed a glitzy overseas trip.
It had ample farcical episodes: the Saudi king, the dictator of Egypt, and the president of the United States placing their hands on a glowing orb that evoked for some a lampoon of Lord of the Rings. The secretary of state assuring us that no one overseas was paying attention to Trump’s domestic troubles (palpably, indeed laughably, untrue) even as his spokesman excluded the American press from a briefing attended by the considerably more docile reporters of the Kingdom of Saudi Arabia. The national-security adviser insisting, “The entire trip is about human rights, about all civilized people coming together to fight the hatred”—an odd remark to make in a country that lops the hands off thieves and the heads off apostates. The commerce secretary, in one of his more witlessly thuggish remarks, observing complacently about urban Riyadh: “There was not a single hint of a protester anywhere there during the whole time we were there.” And then there were the video clips: Melania flicking away her husband’s groping hand and the Leader of the Free World giving the prime minister of little Montenegro a good hard shove.
The increasingly illiberal European country offers shelter to a growing number of international nationalists.
In February 2017, at the state of the nation address, Viktor Orbán, the prime minister of Hungary and the leader of the far-right, anti-immigrant Fidesz party, offered his vision for the country in the coming year. “We shall let in true refugees: Germans, Dutch, French, and Italians, terrified politicians and journalists who here in Hungary want to find the Europe they have lost in their homelands,” he proclaimed.
In reality, Orbán’s “refugees” have been moving to Hungary, and Budapest in particular, for years. A small clique of Identitarians, or aggrieved nationalists from Sweden, the United Kingdom, the United States, France, and elsewhere, all motivated by their disdain for their home countries’ commitment to liberal values, have found an ideological match in his Hungary, where two extreme far-right parties, the governing Fidesz and Jobbik, the largest opposition party, make up most of the National Assembly. Jobbik is the first European political party to champion a border wall. Its members frequently express open anti-Semitic and anti-Roma sentiments, and prioritize the preservation of “Hungary for the Hungarians.”
A Washington Post report suggests the president's son-in-law and adviser sought to give Moscow information he wanted to conceal from America's own intelligence agencies.
Why did Jared Kushner seemingly trust Russian officials more than he trusted the U.S. government?
Friday evening, The Washington Post broke the story that, according to an intercepted report by the Russian ambassador in Washington to his superiors in Moscow, Kushner sought to use secure communications facilities at the Russian Embassy to correspond directly with Russian officials. The Russian ambassador, Sergei Kislyak, reported that the proposal was made in December, after Trump won the election but before he had taken office. The conversations reportedly involved Michael Flynn, the former Trump national-security adviser who was fired after it was revealed that he lied to administration officials about the content of his conversations with Russian officials.
Preston Brooks, Greg Gianforte, and the American tradition of disguising cowardice as bravery
You wouldn’t say that Preston Brooks sucker-punched Charles Sumner in the Senate chamber in 1856—but only because he used a cane. Brooks, a South Carolina congressman, began bludgeoning Sumner, the anti-slavery Massachusetts senator, while Sumner wasn’t looking, and beat him unconscious as Sumner was still bent under his desk trying to stand up.
Brooks and his supporters in the South saw the incident as an act of great valor, as the historian Manisha Sinha writes. Brooks bragged that “for the first five or six licks he offered to make fight but I plied him so rapidly that he did not touch me. Towards the last he bellowed like a calf.” The pro-slavery Richmond Enquirer wrote that it considered the act “good in conception, better in execution, and best of all in consequence.” Other “southern defenders of Brooks,” Sinha writes, praised Brooks for his “manly spirit” and mocked Sumner for his “unmanly submission.” It would have been manlier for the unarmed Sumner not to have been ambushed.