Arnold’s latest post is spot-on. I can’t resist turning it into an SAT analogy…
Housing: Oil :: Today: the Seventies
In both cases, the public flipped out over the market outcome, government rushed to “do something,” and ended up creating a incoherent set of morbidly expensive regulations. And in both cases, the solution is to pull the plug and let the market work.
Maybe in 2012, we’ll know the answer to:
Obama: Carter :: ??? : Reagan
READER COMMENTS
MattFlipago
Aug 24 2010 at 11:52am
Wasn’t Carter the one who started deregulation of the oil market, Reagan basically just came in after they were already ending?
Bryan Caplan
Aug 24 2010 at 1:18pm
I thought that was for airline and trucking dereg, not oil. Anyone?
Contemplationist
Aug 24 2010 at 1:22pm
Carter carried out the transportation deregs. Reagan was responsible for the oil.
David C
Aug 24 2010 at 1:35pm
“The Jimmy Carter administration began a phased deregulation of oil prices on April 5, 1979, when the average price of crude oil was US$15.85 per barrel (42 US gallons). Over the next 12 months the price of crude oil rose to $39.50 per barrel (its all time highest real price until March 7, 2008.)”
http://en.wikipedia.org/wiki/1979_energy_crisis
Hyena
Aug 24 2010 at 1:56pm
That must really sting.
I think people should avoid analogies which both sound like witty cocktail party discussion and show their politics. It usually ends badly.
Mr. Econotarian
Aug 24 2010 at 2:18pm
Oil…
Nixon: problem
Carter: solution, blame
Housing…
Clinton: problem
Bush: problem, blame
Obama: blame (solution???)
Ryan
Aug 24 2010 at 2:57pm
Isn’t it really?:
Clinton/Bush/Obama:Nixon :: ???:Carter/Reagan
Doc Merlin
Aug 24 2010 at 4:12pm
I agree with others and think Nixon instead of Carter would work better in the analogy.
Patrick L
Aug 24 2010 at 8:21pm
Obama: Ford :: ??? : Carter
R. Pointer
Aug 24 2010 at 11:29pm
No No no.
???: Volcker
It probably means a really painful readjustment. At this point the government is doing everything in its power to stop recalculation from happening.
Mike G
Aug 25 2010 at 10:04am
A quote from the Wikipedia article cited above that gets to the Nixon/Carter/Reagan roles:
“Carter proposed removing price controls that had been imposed in the administration of Richard Nixon before the 1973 crisis. Carter agreed to remove price controls in phases; they were finally dismantled in 1981 under Reagan.”
Eleven days after he took office, Reagan ordered immediate decontrol of oil prices. The action ended the Nixon-era price controls eight months ahead of the schedule set during Carter’s administration.
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