Jimmy Carter and Hamas

[The Big Ragu]

Two things, very quickly, then I have to go start dinner.

For The BR, while I was out just now on the bus, I read a piece in the new Harper's by Kevin Phillips. He's a journalist I trust, so I'm inclined to give his work a lot of credence. In an article entitled Numbers Racket: Why the economy is worse than we know, he sort of dismantles the process by which the government has changed the measurements of our economy over the last 40 years. It's unavailable online, and having no economics savvy, I'll urge you to read the piece rather than try to reconstruct it here.

The upshot, though, is this: that the ways we measure unemployment, inflation and consumer spending, among others, are now so corrupted and politically spun, that they've become useless.

Near the end of the article, he says that if we were using the metrics that were in place 25 years ago, our current rate of unemployment would be between 9 and 12 percent, and our inflation rate would be between 8 and 10 percent.

Having lived through the Carter administration as an adult, I'll never try to argue that he was anything but what most historians find him to be: an average to below-average president. But his economic stats don't seem so dire in light of the fact that the mechanisms by which all those things are measured have changed.

And my second point, more to the intent of the thread:

How did we get 5 pages into this without anyone mentioning that one of the reasons Osama gave for attacking us is the nature of our relationship with Israel?

JG, In a lot of my posts the last two years (before we hit acute crisis) on here, I have posted why I thought Bush was laying a foundation for economic disaster. I still think it is looming. I have no idea what the Harper's piece says, but I imagine I am going to be nodding my head in agreement. I'll look for it.

About your characterizations of the economy under Carter, it is not just a statistical story. It is a consumer confidence story. It is a gas lines story--he actually did the worst thing you could do, limiting imports and instituting price controls that created shortages (you can not stem demand for energy). It is an urban blight story. And if you do just stick to numbers, it was the fact that double-digit interest rates made it impossible for anyone to invest, particularly in an environment during which unemployment was historically high and prices were rising by more than 10 percent a year (when 3 percent inflation is considered a tranquil time). We have not faced anything even remotely close to that recently -- not in the last 16 years, at least, and the recession of the early 90s wasn't nearly that dire, either.

 

[The Big Ragu]

Sorry I bore you, Spnited.

 

[BTExpress]

It is a gas lines story--he actually did the worst thing you could do, limiting imports and instituting price controls that created shortages (you can not stem demand for energy). . . . it was the fact that double-digit interest rates made it impossible for anyone to invest, particularly in an environment during which unemployment was historically high and prices were rising by more than 10 percent a year (when 3 percent inflation is considered a tranquil time).

I obtained a driver's license in March 1977. Never sat in a line for gasoline. Never even saw a line for gasoline.

10 percent inflation sucks . . . but when you say "more than 10 percent a year" that makes it sound like there was year after year after year of 10 percent inflation. There wasn't. There were two years like that. And since energy prices and food prices (corn, milk) have risen by more than 10 percent a year recently, I think many Americans today are feeling the effects of inflation to a degree that compares with people in 1979.

And to throw a little more gasoline on the fire . . .

Average household income (in 2006 dollars) rose from $47,672 to $49,011 from 1977-1980 (it actually topped $50K in 1978-79). Yes, you had bad inflation, but you did have rising incomes.

Average household income (in 2006 dollars) have gone from $66,290 in 2001 to $66,570 in 2006. Basically zero income gain in six years . . . to help pay for rising energy and food and housing prices (all of which approach or exceed 10 percent per year since 2001).

In 2001 I paid . . .
$1.59 for gasoline
$1.49 for a pint of milk
$800 for homeowners insurance

Today I pay . . .
$3.49 for gasoline
$2.39 for a pint of milk
$2,200 for homeowners insurance

Are we at 10 percent a year yet?

 

[spnited]

$2.39 a pint for milk? I get a quart for less than that.

 

[The Big Ragu]

I obtained a driver's license in March 1977. Never sat in a line for gasoline. Never even saw a line for gasoline.

The effect of the embargo and Carter's price controls--which ignored the fact that there was huge demand for oil regardless of whether he didn't allow the an eager market to buy it -- didn't escape most people's notice. I commend you for living through 1979 and somehow not actually experiencing it. You were better off than most Americans.

There is so much demand that in the face of skyrocketing worldwide demand today, as India and China consume more of the fixed resource than we do, and will help drive the price per gallon in the U.S. beyond $4, people will STILL buy their gasoline, because there is no cheaper energy alternative out there.

Just a fact. And it transcends politics and policy. There is a fixed supply of oil. There is outrageous demand. This translates to high prices--yet, not prices so high yet that it is tempering demand. What Carter did was not even allow a market in which there was limited supply to at least feed the demand. And he created a mess. Beyond that, though, no one can control the price of gas any more than it is. There isn't enough of it to meet the demand for it. It's just a fact.

 

[BTExpress]

$2.39 a pint for milk? I get a quart for less than that.

Meant to say a quart.

And while I can get it for less than that (store brand), the name brand I used to buy for $1.49 now costs $2.39.

 

[Fenian_Bastard]

I seem to recall the rise of something called OPEC back in the day, yet it goes unmentioned in lengthy posts allegedly discussing that period in history..
The projector is running overtime.
We have a "skewed view of history."
Wowser.

 

[writing irish]

The Iranian Revolution and subesquent market panic had a lot more to do with the 1979 oil crisis than Carter. And of course, the Iranian Revolution had its roots in the 1953 coup which we so lovingly inflicted on them. Blaming the 1979 oil crisis on Carter's failed attempts to manage the crisis is like blaming "Brownie" for Hurricane Katrina. Fail? Yes. Cause of the problem? No.

BTW, the price controls were originated by Nixon in the 1973 crisis, not Carter. Carter was much more of a supply-sider than Nixon.

Finally, we would have done well to heed his advice about energy independence.
http://www.commondreams.org/views05/0503-22.htm

 

[The Big Ragu]

The Iranian Revolution and subesquent market panic had a lot more to do with the 1979 oil crisis than Carter's clumsy price fixing, which occurred after the crisis was already well in effect. And of course, the Iranian Revolution had its roots in the 1953 coup which we so lovingly inflicted on them. Blaming the 1979 oil crisis on Carter's failed attempts to manage the crisis is like blaming "Brownie" for Hurricane Katrina. Fail? Yes. Cause of the problem? No.

That is just wrong. After the Iranian Revolution there was short-term panic. The Saudis almost immediately increased production and picked up the slack to the point that the net loss in production was miniscule. In fact, the Saudis were accused of being agents of the U.S., because of the fact that they came to our rescue. It led to marginally higher oil prices, but it did NOT lead to oil SHORTAGES. What you gave is a false history. The shortages -- and the gas lines -- occurred when Jimmy Carter instituted price controls. That is factual.

By 1979, OPEC was becoming a non-entity relative to the cartel it had been. Carter was not president in 1973, last I looked, Fenian. The following year Iran and Iraq locked up in war and Iranian and Iraqi oil production came to a near standstill. This should have brought about an energy shock that the Reagan administration would have never been able to recover from. Yet, the members of the cartel were unable to collude and price fix and lost their discipline. Reduced worldwide demand was partially a factor, new areas of exploration were a factor, but over-production was the bigger factor, and it caused OPEC to lose its unity. After 1980, oil prices began a decade long decline, including a huge percentage price drop in the mid 80s. This trend was already well underway during the final years of Carter's presidency, in which OPEC was weakening by the day.

Factually, you are both incorrect. OPEC was already starting to lose its unity under Carter. And it was Carter's attempt to manipulate the energy market that caused gas shortages. This is not a matter of opinion. It's fact.

 

[writing irish]

No, Ragu, you're wrong. Nixon initiated the price controls in the 1973 crisis. Carter began phasing them out and Reagan finished phasing them out in 1981. "That is factual."

http://www.presidency.ucsb.edu/ws/index.php?pid=32755
Executive Order 12153- August 17th, 1979. Carter initiates rollback of Nixon Administration price controls.
"What you gave is a false history."

Yes, the drop in production as a result of the Iranian Revolution was negligible. But the market panic was very real, and far more influential than the- admittedly modest- drop in production. I believe that's what I wrote the first time: "subsequent market panic."

You are funny when you are so very certain when you're wrong. "This is not a matter of opinion. It's fact." :

 

[writing irish]

From the Department of Energy at http://www.eia.doe.gov/emeu/cabs/AOMC/Overview.html

1.OPEC begins to ashert power; raises tax rate & posted prices
2.OPEC begins nationalization process; raises prices in response to falling US dollar.
3.Negotiations for gradual transfer of ownership of western ashets in OPEC countries
4.Oil embargo begins (October 19-20, 1973)
5.OPEC freezes posted prices; US begins mandatory oil allocation
6.Oil embargo ends (March 18, 1974)
7.Saudis increase tax rates and royalties
8.US crude oil entitlements program begins
9.OPEC announces 15% revenue increase effective October 1, 1975
10.Official Saudi Light price held constant for 1976
11.Iranian oil production hits a 27-year low
12.OPEC decides on 14.5% price increase for 1979
13.Iranian revolution; Shah deposed
14.OPEC raises prices 14.5% on April 1, 1979
15.US phased price decontrol begins
16.OPEC raises prices 15%
17.Iran takes hostages; President Carter halts imports from Iran; Iran cancels US contracts; Non-OPEC output hits 17.0 million b/d
18.Saudis raise marker crude price from 19$/bbl to 26$/bbl
19.Windfall Profits Tax enacted
20.Kuwait, Iran, and Libya production cuts drop OPEC oil production to 27 million b/d
21.Saudi Light raised to $28/bbl
22.Saudi Light raised to $34/bbl
23.First major fighting in Iran-Iraq War
24.President Reagan abolishes remaining price and allocation controls

 

[writing irish]

"For all its flaws, Carter's 1977 national energy plan contained a sensible idea: letting the price of domestically drilled crude oil, which is now fixed legislatively by a complex system of price controls and formulas, rise to world levels."
Time magazine, 3/12/79
http://www.time.com/time/magazine/article/0,9171,948432-1,00.html

Ragu's right about one thing: it's useful to distinguish between the high-price aspect of the 79 crisis and the shortage aspect. Here's an interesting piece, that I'm neither endorsing nor rebutting, on the shortage issue. Could the shortage have been exacerbated or even created by those innocent saints at the oil companies? Again, I'm not venturing an opinion on that one, but it's an interesting read.
http://www.aliciapatterson.org/APF0403/Donovan/Donovan.html
Of course, the author's a leftie reporter and not an academic or think-tanker on the take from the rich, so I'm sure he's wrong. Only the rich and their lackeys can be trusted to describe the activities of the rich.

BTW, here's the text of that 77 Carter speech. He was not an effective leader, but he understood a hell of a lot and had the moral courage to say it.
http://www.pbs.org/wgbh/amex/carter/filmmore/ps_energy.html