Kyros, I remember it well. I was working for BP Oil in 1985 and a guy had come back from a meeting of oily ministers and told me that the rumour was the spigot was going to be opened to regain market share and that we should expect prices to accelerate downwards following the long decline from the 1979 peak to the end of 1985.
Sure enough, what he said was true [I had had my doubts that the rumour was true, but it's best to panic first and check later in many circumstances, panic being a perfectly fine evolutionary advantage ignored at our peril].
Ahaahaha was right though in that it wasn't half that prices had fallen since 1979's peak, it was only about 40% or so [I wasn't being precise]. His point was that tax cuts fueled the boom and Raygun and Ahahahaahaha got their claim to fame.
But the transfer of wealth from oil buyers to oil sellers in the 1970s was huge and was more than enough to explain the long economic malaise [when combined with unionism and democratic socialism in ascendance] and stock market wallowing from the crunch in 1974 [when the oil price zoomed up and the stock market zoomed down] to the beginning of the 1980s.
By 1983, there had been a decade of adjustment to new processes and higher oil prices, so when prices starting falling the economy took off through the 1980s and the boom was born. There was a huge transfer of wealth from oil sellers to oil buyers.
There were of course many other factors feeding into the boom, such as financial deregulation and more globalisation, the computing revolution and telecommunications improvements, big population growths and baby boomer peaking, with China coming out of malaise and Japan ascendant, working like crazy.
Raygun's tax cuts and supply side blah de blah were like pimples on a pumpkin. Raygun was lucky and took over at a time when things were all heading in the right direction. Similarly, King George II can't be blamed for the Biotelecosmictechdot.com implosion and economic worries - he just took over at a time when the bust was due and Osama had his plans ready to roll.
Mqurice
PS: Jay Chen on 2003 prospects [and events leading up to now] "Don't Worry, Be Happy". bubblevision.tv |
