Derek: After reading your charming post, I decided to do more research on the subject and found numerous articles some with differing opinions as to what happened and why. My point of view and conclusions were based on my experience and vivid memory of those days rather than a knowledge of the underlying issues and events that caused the crisis, many of which I had been unaware. Here is an excerpt from an article I found most compelling, which btw supports your assertions: The shortages in the United States had little to do with the embargo. Price controls imposed in August 1971 by the Nixon administration prevented major oil companies from passing on the full cost of imported crude oil to consumers at the pump. "Big Oil" did the only sensible thing: It cut back on imports and stopped selling oil to independent service stations in order to keep its own franchisees supplied. By the summer of 1973, gasoline prices were exploding, pumps were running dry, and long lines were commonplace. And that was before the Arab oil embargo or production cutbacks were announced. " cato.org
A different conclusion:
In 1973, the Arab oil embargo dealt the U.S. economy a major blow. This, combined with OPEC's subsequent price hikes and a growing American dependence on foreign oil, triggered the recession in the early seventies
us-israel.org;
Another opinion:
"There was no crisis":
California's rolling blackouts have made headlines and Cheney has used them to sell his plan. But the Golden State's problems are unique and are caused by a massive regulatory failure. Indeed, the "crisis" does not even cover all of California. Los Angeles, for example, is unaffected because it has its own municipal power service.
"The potential crisis we face is largely the result of shortsighted domestic policies -- or, as in recent years, no policy at all," Cheney said, blaming the Clinton administration. But the United States has never had more abundant supplies of power selling at very low prices.
The country has also never been smarter about energy use. Since 1973, fuel efficiency for the economy overall has improved by more than 42 percent. This dramatic gain in what energy analysts call "energy intensity" was not caused by fuel becoming more expensive. Indeed, the opposite has occurred. Between 1980 and 2000, energy prices rose by 44.8 percent, most of that rise occurring in the past two years. During the same 20-year period, non-energy prices increased almost three times as fast, by 119 percent. The price of a gallon of gas has declined by 39 percent in real terms.
Low prices, efficient use, abundant supply: some crisis.
archive.salon.com
I found this, "the Federal Reserve did it":
libertyhaven.com
In a campaign speech, Mr. Nixon put the issue in the strongest terms: "The imposition of price and wage controls during peace-time is an abdication of fiscal responsibility. Such controls treat symptoms and not causes. Experience has indicated that they do not work, can never be administered equitably and are not compatible with a free economy."
~ Yet, Nixon did a turnaround when on August 15, 1971, he implemented the New Economic Policy with its wage and price controls ~
Several of his key advisers shared these beliefs, in particular, Arthur F. Burns, now chairman of the Federal Reserve Board. And on July 28, 1971, barely three weeks prior to that fateful August 15, Paul W. McCracken, chairman of the President's Council of Economic Advisers, publicly assailed John Kenneth Galbraith, who, in testimony before the Joint Economic Committee, had urged the imposition of wage and price controls. "The difference between Professor Galbraith and the Nixon Administration on this matter is clear," he said. "Believing that the price system contributes nothing to the well-being of the American people, he is prepared to suppress it. Believing that the price system has a major part in the high standard of living and economic satisfaction of the American people, we are determined to strengthen it."
But three weeks later, as noted, along came the New Economic Program and wage and price controls.
NEP, however, was only part of a more sweeping package, and here, in my view, lies the true explanation of the Nixon Administration's sudden about-face. Apart from its impact on the domestic scene, this grotesque package also contained provisions of far-reaching significance abroad. Specifically, the President on August 15 decreed an immediate 10% across-the-board surcharge on most imported goods and services. This, of course, was a unilateral abrogation of commitments incurred by the U.S. in accord with the General Agreement on Tariffs and Trade. Far more basic was Washington's decision to scuttle the Bretton Woods Agreement, under which the International Monetary System, for more than a generation, had functioned. That pact required this country, in all circumstances, to exchange one ounce of gold for thirty-five American dollars. With a stroke of the pen, the President violated these solemn obligations, thereby welching on our creditors and setting the International Monetary System adrift on a sea of floating exchange rates. .....
... In short, while pretending to control inflation, the Nixon Administration, aided and abetted by the allegedly independent Federal Reserve Board, has turned the inflationary spigots wide open. Small wonder that despite wage and price controls - or, more accurately, in some measure because of them - the U.S. currency has suffered its worst loss of value in over a century."
RE: the independent gas station dilemma:
Pres. Nixon calls for Big Oil not to cut off independents:
President Richard Nixon announced a voluntary "share the [gas] shortage" plan on May 10, 1973, which required suppliers to provide independent gas stations with the same percentages of refinery output as were sold to them in the base period October 1, 1971– September 30, 1972. Independent gasoline stations, which had been threatened with a total cutoff in supplies, received immediate relief from the administration's plan. Travelers faced spot gas shortages during the Memorial Day weekend, which further highlighted the worsening energy crisis. |
