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 president’s irate criticism of the omnibus spending bill demonstrates his continued attachment to a flawed theory of the presidency.
In the end, Donald Trump had to sign the bill—for the military, he said. But he didn’t have to like it.
That was the upshot of a peculiar and rambling set of remarks (even by his standards) the president made early Friday afternoon as he signed a bill funding the government through September.
“I’ve signed this omnibus budget bill. There are a lot of things I’m unhappy about in this bill,” Trump said. “But I say to Congress, I will never sign another bill like this again. I’m not going to do it again.”
What it came down to, apparently, was defense spending. Trump threatened to veto the bill in a tweet Friday morning, after the White House had previously indicated he’d sign it. (My colleague Elaina Plott reported, however, that the president himself had reservations at that time.) Throughout the remarks, Trump returned incessantly to the question of funding national defense.
Gigantic piles of impounded, abandoned, and broken bicycles have become a familiar sight in many Chinese cities, after a rush to build up its new bike-sharing industry vastly overreached.
Last year, bike sharing took off in China, with dozens of bike-share companies quickly flooding city streets with millions of brightly colored rental bicycles. However, the rapid growth vastly outpaced immediate demand and overwhelmed Chinese cities, where infrastructure and regulations were not prepared to handle a sudden flood of millions of shared bicycles. Riders would park bikes anywhere, or just abandon them, resulting in bicycles piling up and blocking already-crowded streets and pathways. As cities impounded derelict bikes by the thousands, they moved quickly to cap growth and regulate the industry. Vast piles of impounded, abandoned, and broken bicycles have become a familiar sight in many big cities. As some of the companies who jumped in too big and too early have begun to fold, their huge surplus of bicycles can be found collecting dust in vast vacant lots. Bike sharing remains very popular in China, and will likely continue to grow, just probably at a more sustainable rate. Meanwhile, we are left with these images of speculation gone wild—the piles of debris left behind after the bubble bursts.
This is no way for two grown humans to make a major life decision.
The marriage proposal is one of the most ritualized moments in modern American life. Growing up, many girls are instilled with a specific idea of how it should go: He’ll take us somewhere romantic—we’ll have no idea what’s happening—he’ll get down on one knee—we’ll start crying—he’ll pop the question—we’ll immediately say yes. It should be magical.
But for a lot of heterosexual couples, the proposal—as movies portray it, as many millennial women have internalized it—doesn’t reflect the kind of modern, egalitarian relationships many women want today. Whom to marry is among the most important decisions most people will ever make in their lives, and yet it’s not a choice made in the course of a conversation—the normal way two grown humans make big life decisions. Instead, it has to be a show, with a prefixed grand finale: “yes.”
A new six-part Netflix documentary is a stunning dive into a utopian religious community in Oregon that descended into darkness.
To describe Wild Wild Country as jaw-dropping is to understate the number of times my mouth gaped while watching the series, a six-part Netflix documentary about a religious community in Oregon in the 1980s. It’s ostensibly the story of how a group led by the dynamic Bhagwan Shree Rajneesh purchased 64,000 acres of land in central Oregon in a bid to build its own utopian city. But, as the series immediately reveals, the narrative becomes darker and stranger than you might ever imagine. It’s a tale that mines the weirdness of the counterculture in the ’70s and ’80s, the age-old conflict between rural Americans and free love–preaching cityfolk, and the emotional vacuum that compels people to interpret a bearded mystic as something akin to a god.
Considering SpaceX accidentally blew up one of Mark Zuckerberg’s projects, this is a little awkward.
This week’s revelations about a British political consultancy’s use of data from 50 million Facebook users for potentially shady purposes has prompted many people to declare they will quit the social network in protest. One of the newest additions to the bandwagon is Elon Musk, the wealthy entrepreneur with companies like Tesla and Space X to his name—and he followed through in a very public way.
It happened, as these things do, on Twitter.
“It is time. #deletefacebook,” Brian Acton, the cofounder of the messaging service WhatsApp, tweeted on Tuesday, the day the Federal Trade Commission opened an investigation into how Cambridge Analytica accessed the Facebook data. For whatever reason, Musk decided to respond to Acton’s tweet on Friday. “What’s Facebook?” he replied. He appeared to be joking, but someone decided to call his bluff.
How evangelicals, once culturally confident, became an anxious minority seeking political protection from the least traditionally religious president in living memory
One of the most extraordinary things about our current politics—really, one of the most extraordinary developments of recent political history—is the loyal adherence of religious conservatives to Donald Trump. The president won four-fifths of the votes of white evangelical Christians. This was a higher level of support than either Ronald Reagan or George W. Bush, an outspoken evangelical himself, ever received.
Trump’s background and beliefs could hardly be more incompatible with traditional Christian models of life and leadership. Trump’s past political stances (he once supported the right to partial-birth abortion), his character (he has bragged about sexually assaulting women), and even his language (he introduced the words pussy and shithole into presidential discourse) would more naturally lead religious conservatives toward exorcism than alliance. This is a man who has cruelly publicized his infidelities, made disturbing sexual comments about his elder daughter, and boasted about the size of his penis on the debate stage. His lawyer reportedly arranged a $130,000 payment to a porn star to dissuade her from disclosing an alleged affair. Yet religious conservatives who once blanched at PG-13 public standards now yawn at such NC-17 maneuvers. We are a long way from The Book of Virtues.
The original sitcom reveled in complexity. In the premiere of its highly anticipated reboot, though, it has simplified politics down to easy partisanship.
“We’re not going to talk about who the Conners are going to vote for. I think people would turn us off real quick.”
That was Roseanne Barr, talking with the Los Angeles Timesabout the politics of the original version of her hit ABC sitcom. It was 1992: The American presidential campaign, Bill Clinton versus George H. W. Bush versus Ross Perot, was being waged. Dan Quayle was arguing about family values with a fictional journalist. Roseanne, though—the producer, the character, the star—was insisting that her TV family transcended both the vagaries of political partisanship and the messiness of the culture wars themselves. The Conners are “somewhere in the middle of it all,” Barr said, “not knowing what anything stands for anymore. So really what they do is go to work and come home to be with their family, and try to make do.”
How sugar daddies and vaginal microbes created the world’s largest HIV epidemic
VULINDLELA, South Africa—Mbali N. was just 17 when a well-dressed man in his 30s spotted her. She was at a mall in a nearby town, alone, when he called out. He might have been captivated by her almond eyes and soaring cheekbones. Or he might have just seen her for what she was: young and poor.
She tried to ignore him, she told me, but he followed her. They exchanged numbers. By the time she got home, he had called her. He said he wasn’t married, and she doesn’t know if that was true. They met at a house in a different township; she doesn’t know if it belonged to him. Mbali, who is now 24, also doesn’t know if he had HIV.
She enjoyed spending time with the man during the day, when they would talk and go to the movies. But she didn’t like it when he called at night and demanded to have sex, which happened about six times a month. When she refused him, he beat her. For her trouble, he gave her a cellphone, sweets, and chocolates.
The president is surrounding himself with familiar faces from his favorite cable-news network—but may not find in them what he seeks.
Remember “bring in the grown-ups”? They have all now been carried off, with the sole exception of Secretary of Defense James Mattis.
Instead, Trump is staffing his administration and his legal team with familiar personalities from his preferred cable-news channel—much like an imperious child demanding that his crib be stuffed with his TV-cartoon favorites.
Now perhaps the most important West Wing job of them all is to be filled by John Bolton, a figure with an authentic background in government, yes—he held a recess appointment as ambassador to the United Nations from August 2005 until December 2006—but whose achievements over the past dozen years have been posted principally in the field of television punditry.