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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (36651)	8/10/2002 1:54:03 AM
From: D. Long	Read Replies (1) \| Respond to of 281500

The gas crises in 73 and 78 weren't limited to CA. They were national and they were caused by Nixon and Carter's imposition of gas price ceilings, which is what the link I gave refers to. Yes, the prime cause was the OPEC limitation of oil exports in 73 during the Yom Kippur war. Note I said "limit," not "cease." The Arabs still exported oil. Lots of it. The nations not limited by the cartel bought extra, and the US bought the surplus. Badabing. The supply did not stop, it was curtailed. In response to the rapid rise in gas prices ($12 a gallon in 73, I believe it was), Nixon placed a price cap on gasoline prices, which resulted in <gasp> lines. The 78 shortage was again attributed to bad policy by Carter, against the recommendations of his economic advisors. After the 78 shortage, there was extensive legislation passed ramping up alternative fuel research and implementing gas mileage standards for vehicles. As to the implication that the "big oil companies" drove the little suppliers out of business because of the oil shortage, well, that makes no sense whatsoever. What does make sense, is that price caps drove small gas vendors out of business because the government was forcing them to sell gas far below the price of gas at cost during an oil embargo. And just as dairy farmers will dump their milk supplies in the dirt when the price is below their cost, it makes perfect sense why oil companies would burn their pumps. Economics, Karen. Economics. Derek