PANIC AT THE PUMP

Political economist Jacobs (Woodrow Wilson Center/Princeton Univ.; Pocketbook Politics: Economic Citizenship in Twentieth-Century America, 2005, etc.) considers the effects of the 1970s OPEC embargoes on subsequent politics.

It may surprise people too young to remember him, but Richard Nixon, though “not a New Dealer,” actually declared in 1973 that seven years hence, America would become energy independent. What happened? Politics happened. By the author’s account, Nixon’s carefully assembled program of price controls, designed to smooth out the bumpier edges of supply and demand, gave way at the end of the decade to the Reagan administration’s libertarian insistence that the market knows best. Nixon’s expansion of the regulatory power of the federal government remains controversial even today, but it was neither without precedent nor without successors. As Jacobs writes, Gerald Ford took things a quiet step further, calling both for “fiscal restraint and higher energy prices” in a time of rampant inflation, as well as creating a comprehensive energy policy that included a strategic reserve and requirements that the automobile industry improve fuel efficiency. The anti-regulatory forces eventually gained the field, but they were there all along; the famed Alaska Sen. Mike Gravel, for instance, insisted not just on the free market, but also on licensing avarice: “Greed motivates the world….If we will just unleash the greed, then we will solve our energy problems.” Though unsuccessful on many fronts, the Reagan White House insisted that falling oil prices as a result of decontrol vindicated its policies. However, as Jacobs sagely notes, decontrol meant that the U.S. would “deregulate markets at home and protect them abroad,” which required an increased military presence everywhere oil was produced. The author concludes, depressingly, by invoking the political insider James Schlesinger, who once remarked, “it’s a hell of a lot easier and a lot more fun to kick asses in the Middle East than make sacrifices and practice conservation.”

A readable and neatly paced examination of recent history that sheds light on even more recent events.