oil shock

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Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization by Jeff Rubin

addicted to oil, air freight, banking crisis, Bear Stearns, big-box store, BRICs, business cycle, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, energy security, food miles, Ford Model T, hydrogen economy, illegal immigration, immigration reform, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, Jevons paradox, Just-in-time delivery, low interest rates, market clearing, megacity, megaproject, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit maximization, reserve currency, South Sea Bubble, subprime mortgage crisis, the market place, The Wealth of Nations by Adam Smith, trade liberalization, work culture , zero-sum game

There is something bigger going on. OIL SHOCKS HAVE ALWAYS CAUSED RECESSION Here’s a clue. Soaring oil prices caused four of the last five global recessions. The only one that wasn’t caused by oil prices, the Asian meltdown of 1998, never even washed ashore in the major oil-consuming economies of the world like the United States and Western Europe. By contrast, two of the largest recessions in the postwar period came directly after the last two OPEC oil shocks. The second OPEC shock actually reverberated into two back-to-back recessions. A decade later, another oil shock, this time caused by Iraq’s invasion of Kuwait and subsequent torching of many of its oil wells, also produced a fairly deep recession in 1991.

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Gasoline prices in the United States rose from around $1.80 per gallon in 2004 to over $4 per gallon in mid-2008, an increase that now dwarfs even the price hikes motorists had to contend with during the OPEC oil shocks. The run-up since 2002 is almost four times as great as the increase following the Iranian Revolution. Even in inflation-adjusted terms (or “constant dollars,” as economists call them), the price of gasoline climbed to levels greater than when cursing 1970s American motorists had to line up at gas stations due to fuel shortages. Suddenly, the OPEC oil shocks that had seemed like a worst-case scenario don’t look so bad. In fact, the process of having our world shrink promises to be much more wrenching this time around, if only because it has got so much bigger since the last energy crisis.

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In Japan, where production lines are slowing and workers being sent home, sales are down 32 percent, to 35-year lows. German car sales are the worst since reunification—down 14 percent in January. Still, the US has been hit particularly hard. Sales in February fell by 41 percent compared to 2008. Oil shocks have always turned the rugged capitalists of Detroit into big-time Keynesians. Following the second OPEC oil shock, Lee Iacocca went begging to Washington to save Chrysler from bankruptcy. Then in 2008, taxpayers again heard Detroit’s all-too-familiar refrain, “Brother, can you spare a dime?” And Congress voted 370–58 to approve a $25 billion bailout package for the auto industry.

The Oil Kings: How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the Middle East by Andrew Scott Cooper

addicted to oil, Alan Greenspan, An Inconvenient Truth, anti-communist, Ayatollah Khomeini, banking crisis, Boycotts of Israel, energy security, falling living standards, friendly fire, full employment, Future Shock, Great Leap Forward, guns versus butter model, interchangeable parts, Kickstarter, land reform, MITM: man-in-the-middle, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, Post-Keynesian economics, RAND corporation, rising living standards, Robert Bork, rolodex, Ronald Reagan, Seymour Hersh, strikebreaker, unbiased observer, uranium enrichment, urban planning, Yom Kippur War

Kissinger’s remarks to Bhutto suggest that he feared a repeat of the anti-Shah disturbances of 1953 and 1963, that he now accepted that high oil prices posed as much a threat to the stability of Iran as they did to, say, Italy—to oil producers as well as oil consumers—and that friendly authoritarian dictatorships as well as Western democracies were in equal peril from the ructions of the oil shock. To Bhutto, Kissinger complained that the oil shock could have been avoided had the Nixon administration accepted the Shah’s offer in 1969 to buy millions of barrels of Iranian oil at a special discount. The deal promoted by Herbert Brownell had been judged illegal under U.S. law because it violated the quota laws that applied to petroleum imports.

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E183.8.I55C66 2011 327.73055—dc22 011008319 ISBN 978-1-4391-5517-2 ISBN 978-1-4391-5713-8 (ebook) To My Family CONTENTS Introduction A Note on the Use of Iranian Imperial Titles PART ONE: GLADIATOR 1. A Kind of Super Man 2. Guardian of the Gulf 3. Marital Vows 4. Contingencies 5. Oil Shock 6. Cruel Summer PART TWO: SHOWDOWN 7. Screaming Eagle 8. Potomac Scheherazade 9. Henry’s Wars 10. The Spirit of ’76 11. Royal Flush 12. Oil War Epilogue: The Last Hurrah Acknowledgments Notes Bibliography Index INTRODUCTION “Why should I plant a tree whose bitter root Will only serve to nourish poisoned fruit?”

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The narrative includes stories told for the first time, that, for example, illustrate the extraordinary degree of Iranian involvement—not to mention outright manipulation—in U.S. politics and foreign policy in the 1970s, and the extent to which the tentacles of the oil states of the Middle East reached right into the Oval Office to influence presidential decision making to an astonishing degree on domestic and foreign policy. We now know that the U.S. response to the 1971 India-Pakistan War, the 1972 U.S. presidential election, the Arab-Israeli War of 1973, the 1973–74 Arab oil embargo, the 1974–75 oil shock, the 1975 Middle East peace shuttle, and the 1976 U.S. presidential election all had an Iranian component. This book provides answers to long-standing questions about U.S.-Iran military contingency planning, the Ibex spy project, Iran’s nascent nuclear program, and the mysterious dealings of Colonel Richard Hallock.

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

“To suggest that stagflation is a mystery merely indicates that one has elected to view the world through narrow econometric lenses rather than more widely through social and political as well as economic ones,” he wrote. “There is a problem here, but if there is a mystery, it is in the eye of the beholder, not in the real world.” By early 1979 the Islamic revolution in Iran led to a second oil shock, another oil embargo, another spike in oil prices, even higher inflation, and a return to outright stagflation. While fiscal and monetary policy had remained loose after the first oil shock, feeding the inflation rate, inflation nearly doubled to 13.3 percent in 1979. And then, finally, came the decisive intervention: besieged by critics, Carter chose inflation hawk Paul Volcker to head the Federal Reserve.

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But ultimately, it was Paul Volcker’s crippling interest rates that brought inflation rates back down from their stratospheric heights. Reagan finally declared victory over stagflation in 1983. What ultimately explains the stagflation that the United States and other advanced economies experienced in the 1970s? The short answer: oil shocks together with a misguided policy response that released restraints on inflation expectations. Oil shocks, like all negative aggregate supply shocks, reduce potential growth and increase production costs. That puts pressure on companies that use oil; they must trim payrolls and/or raise prices. Loose monetary policy lowers the cost of capital, helping companies maintain payrolls until demand resumes.

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If, however, the job loss is permanent and replacing my income is unlikely, for example, because of a health issue that impairs my productivity, then my lifestyle and spending must be adjusted to match my new circumstances. Otherwise, I’ll go bankrupt. The oil shocks were permanent—OPEC was a new force that would continue to act as a bloc, for the most part. That increased the real price of oil on a permanent basis and reduced the future growth of oil importing economies. That also raised the structural level of unemployment. The right policy response should have accepted those unpleasant facts. Tight monetary and fiscal policies, rather than loose ones, could have prevented runaway inflation. Had tighter monetary and fiscal policies prevailed, the oil shock would not have caused wages and prices to spiral across the board.

The Power Surge: Energy, Opportunity, and the Battle for America's Future by Michael Levi

addicted to oil, American energy revolution, Berlin Wall, British Empire, business cycle, carbon tax, Carmen Reinhart, crony capitalism, deglobalization, energy security, Exxon Valdez, fixed income, Ford Model T, full employment, geopolitical risk, global supply chain, hiring and firing, hydraulic fracturing, Induced demand, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, Jevons paradox, Kenneth Rogoff, manufacturing employment, off-the-grid, oil shale / tar sands, oil shock, peak oil, RAND corporation, Ronald Reagan, Silicon Valley, Solyndra, South China Sea, stock buybacks

In particular, as U.S. oil consumption shrinks, the U.S. economy will be a smaller piece of the oilprice puzzle; constraints on economic growth in places such as China and India in the face of expensive oil (and efforts by oil producers to keep prices at levels that those economies find manageable) may help restrain price increases before they really hurt the United States. There THE CAR OF THE FUTURE • 131 is good reason to believe that, this time, better oil efficiency will really pay off. Nevertheless, it’s possible to overstate the value of using less oil. Oil shocks typically precede recessions, but after forty years of careful studies economists still can’t agree on whether oil shocks actually cause big economic downturns. (One economist I know likes to quip that oil price spikes have preceded six of the last three recessions.) Even studies of the biggest oil spike of them all—the result of the 1973 Arab embargo—aren’t conclusive when it comes to how much of the ensuing recession should be pinned on oil.

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Many of the details are novel, but the roots of the basic conflicts stretch back to the first modern oil crisis, which rocked the world in the autumn of 1973, and its aftermath. It is no exaggeration to claim that most of the battle lines defining today’s clashes were first drawn decades ago. The oil shock that struck on October 16, 1973, came at a time of enormous change and uncertainty for the United States. The Paris Peace Accords, signed in January of that year, had begun to end the Vietnam War, but Americans remained torn by the conflict. The Watergate scandal, which would eventually end Richard Nixon’s presidency, was slowly coming to light.

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Two lasting changes that would help the United States over the next decade eventually emerged, though neither was without controversy.11 The first was the opening of the Trans-Alaskan Pipeline, a ten-billion-dollar, two-million-barrel-a-day behemoth running from Prudhoe Bay on the North Slope of Alaska to the Pacific port of Valdez. The pipeline had been on the table before the energy crisis but stalled in the face of hostility to its construction from environmental and Native American groups. The oil shock quickly broke down the opposition, and on November 16, 1973, Nixon signed broadly supported legislation moving the pipeline forward. By the end of the 1970s, it would allow previously landlocked oil to flow to the lower forty-eight states, reversing the earlier decline in U.S. crude production. American output bottomed out in 1976, and U.S. production would remain above its 1976 level until 1989.

The King of Oil: The Secret Lives of Marc Rich by Daniel Ammann

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", accounting loophole / creative accounting, anti-communist, Ayatollah Khomeini, banking crisis, Berlin Wall, Boeing 747, book value, Boycotts of Israel, business intelligence, buy low sell high, energy security, family office, Johann Wolfgang von Goethe, Michael Milken, Mikhail Gorbachev, Nelson Mandela, oil shock, peak oil, purchasing power parity, Ronald Reagan, subprime mortgage crisis, Suez crisis 1956, trade liberalization, transaction costs, transfer pricing, Upton Sinclair, Yom Kippur War

ISRAEL AND THE SHAH Top-Secret Pipeline in Israel • Trading with the Shah of Persia • Crude Middleman • Yom Kippur War • The Breaking Off 7. MARC RICH + COMPANY Swiss Secrecy • Vendetta • Thanks to Iranian Oil • The Oil Shock of 1974 • Faster, Longer, More Aggressive • The Invention of the Spot Market • The Secret of Trust • “Don’t Let Them Eat Your Soul” • Pioneer of Globalization 8. TRADING WITH THE AYATOLLAH KHOMEINI Khomeini’s Return • Iran Hostage Crisis • The Second Oil Shock of 1979 • “We Had Oil Available, and Our Competitors Did Not” • Israel’s Salvation 9. THE CASE Marc Who? • “With Our Shotguns Blazing” • Rich’s Flight to Switzerland • Rudolph W.

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In these commodity trades, the risk was primarily carried by the bank that had extended the line of credit. Its collateral for the credit deal was the commodity at issue, in this case oil. The Oil Shock of 1974 It was a good time for a commodities trader who wanted to go into business for himself. The world had been changed forever by the Arab oil embargo—imposed in the wake of the Yom Kippur War—and skyrocketing oil prices. These developments led to the world’s first oil shock, a shock that would have serious economic consequences the world over. The price for a gallon of gasoline rose from 38.5 in May 1973 to 55.1 in June 1974.5 It was the first time since the Second World War that the United States had seen gasoline shortages.

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The United States government offered a high reward for his capture and chased him all over the world. Rich’s is one of the most amazing careers of the twentieth century, a career that is tightly woven with great events in world history: Fidel Castro’s revolution in 1959; the decolonization of Africa in the 1960s; the Yom Kippur War and the oil shock of 1974; the fall of the shah of Persia and the seizure of power by the Ayatollah Khomeini in Iran in 1979; apartheid South Africa in the 1980s; and the crumbling of the Soviet Union in the 1990s. Marc Rich and his business partners were on the scene when these events happened. Thanks to their know-how, their hard work, and their considerable aggression, they were able to react to these events to their benefit more than their competitors ever could.

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

As cold weather arrived, truck drivers blocked highways to protest the soaring price of diesel fuel, and homeowners unplugged their Christmas lights in sympathy—or, perhaps, to avoid the opprobrium of their neighbors. Texas, a state floating on oil, gave birth to a popular bumper sticker urging, “Freeze a Yankee.” Gas lines, clogged with drivers desperate to top off nearly full tanks while the precious liquid was still available, symbolized the collapse of the American dream. The oil shock upset the equilibrium in Canada, setting off a boom in oil-rich Alberta while crippling import-dependent Quebec. The reverberations were even more disquieting in Japan. As petroleum prices rose through 1973, the Japanese did not anticipate serious trouble; their country had little engagement with the Middle East, and many Japanese companies had even complied with the Arab boycott against Israel.

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After the embargo was announced, the British and French governments both predicted robust economic growth in 1974. As late as November 14, even though oil was now selling for $5.12 a barrel instead of $2.90, the Federal Reserve raised its forecast of US economic growth while lowering its forecast of unemployment.22 Only in late November, six weeks after the oil shock, did the reality sink in. In September, the Japanese economy had been so hot the government took special measures to slow it down; in November, the same officials slashed their forecast of economic growth for the coming months to zero. French economists warned that growth could plummet. At the Fed, the optimistic November 14 forecast was consigned to the dustbin.

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Governments and central bankers knew, or thought they knew, how to use “traditional methods of economic management”—raising and lowering interest rates, taxes, and government spending—to restore an economy to health. When it came to fixing declining productivity growth, however, the economists’ toolbox was embarrassingly empty. CHAPTER 6 Gold Boys Sentiment at the start of 1973 had been buoyant. A year later, as the oil shock reverberated through the world economy, the atmosphere was vastly different. Inflation continued to rise. West Germany had just banned the importation of immigrant workers, on which its industries had relied since 1955, and Austria was about to follow. As “Help Wanted” signs were taken down across Northern and Central Europe, families in Turkey, Yugoslavia, Portugal, and Greece, which together supplied Germany with workers by the millions, began to feel the pain.

Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally

"World Economic Forum" Davos, Alan Greenspan, American energy revolution, Asian financial crisis, banking crisis, barriers to entry, Bear Stearns, Bretton Woods, collective bargaining, credit crunch, energy security, energy transition, geopolitical risk, housing crisis, hydraulic fracturing, Ida Tarbell, index fund, Induced demand, interchangeable parts, invisible hand, joint-stock company, market clearing, market fundamentalism, megaproject, moral hazard, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, price discrimination, price elasticity of demand, price stability, sovereign wealth fund, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, transfer pricing, vertical integration

“Oil ‘Facts’ Don’t Quite Match the Rhetoric.” New York Times, March 18, 1979, E5. Hamilton, James. “Historical Causes of Postwar Oil Shocks and Recessions.” Energy Journal 6, no. 1 (1985): 97–116. ——. “Historical Oil Shocks.” February 1, 2011. http://econweb.ucsd.edu/~jhamilto/oil_history.pdf. ——. “Understanding Crude Oil Prices.” National Bureau of Economic Research, Working paper 14492, Cambridge, Mass., 2008. Hamilton, James D. Causes and Consequences of the Oil Shock of 2007–2008. San Diego, Calif.: UC San Diego, Department of Economics, 2009. Hammes, David, and Douglas Wills. Black Gold: The End of Bretton Woods and the Oil Price Shocks of the 1970s.

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DeGolyer and MacNaughton, Twentieth Century Petroleum Statistics, 108. 151. Yergin, The Prize, 543–46. 152. Reserves (Federal Trade Commission. International Petroleum Cartel, Table 1, Table 8, 5–6, 23). 153. Data for 1950 (Federal Trade Commission. International Petroleum Cartel, Table 10, 25). 154. Hamilton, “Historical Causes of Postwar Oil Shocks,” 99; Hamilton, “Historical Oil Shocks,” 9. 155. Maugeri, 2006, 48. 156. “The Commission had the companies’ demand forecasts for the next month, and they also had excellent inventory data, with a lag of only about a week or two. When stocks appeared to be accumulating, production would be cut back. If inventories appeared to be falling below the amount needed to support current production, production quotas [quotas] would be increased.

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A series of sabotage attacks, strikes, and commercial disputes in Venezuela, Iraq, Nigeria, the North Sea hit the market and contributed to the rapid increase in crude prices.67 For the first time ever, in February 2008, crude prices breached $100. As the summer of 2008 approached, they were hurtling over $140.68 The crude oil price shock between the fourth quarter of 2007 and second quarter of 2008—37 percent in real terms, 41 percent nominal, for U.S. imported crude oil prices—was “by any measure … one of the biggest oil shocks on record.”69 In the United States pump prices tracked those of crude to astounding new highs. In real terms, average national pump prices for regular grade gasoline exceeded their prior high set in March 1981 ($3.80 per gallon) in April of 2008 ($3.84) and then jumped up to peak at $4.43 in June.70 In nominal terms, pump prices peaked in July 2008 at $4.06 per gallon.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Second, and more important, the market price can and should be altered if good reasons exist to do this—whether these reasons reflect political objectives, such as the desire to reduce oil revenues available to Middle Eastern terrorists, or economic ones, such as the desire to avoid another recession-inducing oil shock. Between them, these two observations point to some obvious solutions to the long-term challenges of climate change and oil depletion—taxing oil or carbon, subsidizing alternative energy, redirecting public research funding, and offering cheap government insurance against the risks and decommissioning costs of nuclear power. The long-term response of Capitalism 4.0 to these issues is discussed at greater length in Chapter 19. But what could Western governments have done in the short-term to prevent the 2008 oil shock and the subsequent financial disaster—and what might governments do in the near future if another surge in the oil price to $150 a barrel were to threaten the global economy in the next few years?

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But what could Western governments have done in the short-term to prevent the 2008 oil shock and the subsequent financial disaster—and what might governments do in the near future if another surge in the oil price to $150 a barrel were to threaten the global economy in the next few years? The fundamentalist view that market prices always reflect all possible information and lead to the best possible allocation of resources blinded governments and regulators to a crucial difference between the 2008 oil shock and the ones that occurred in 1974, 1979, and 1990. All earlier oil shocks were caused by geopolitical disruptions or deliberate OPEC actions that reduced the supply of oil. The surge in oil prices in 2008 was different. It was caused not by a shortfall in supply but an increase in demand. However, this demand was not due, as widely reported, to increased Chinese consumption.

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Paulson CHAPTER ELEVEN - There Is No Can Opener The First Era of Economics The Second Era: Keynes’s Government-Led Economics The Third Era: The Triumph of Rational and Efficient The Next Transition CHAPTER TWELVE - Toward a New Economics Part IV - The Great Transition CHAPTER THIRTEEN - The Adaptive Mixed Economy Energy Policy and the 2008 Oil Shock CHAPTER FOURTEEN - Irresistible Force Meets Immoveable Object CHAPTER FIFTEEN - What—Me Worry? Will Rising Interest Rates Choke Off Economic Recovery? Will Printing Money Unleash Inflation? Will the Dollar Collapse? Part V - Capitalism 4.0 and the Future CHAPTER SIXTEEN - Economic Policy in Capitalism 4.0 Will There Be a Government Debt Crisis?

The End of Growth by Jeff Rubin

Alan Greenspan, Anthropocene, Ayatollah Khomeini, Bakken shale, banking crisis, Bear Stearns, Berlin Wall, British Empire, business cycle, call centre, carbon credits, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, decarbonisation, deglobalization, Easter island, energy security, eurozone crisis, Exxon Valdez, Eyjafjallajökull, Fall of the Berlin Wall, fiat currency, flex fuel, Ford Model T, full employment, ghettoisation, Glass-Steagall Act, global supply chain, Hans Island, happiness index / gross national happiness, housing crisis, hydraulic fracturing, illegal immigration, income per capita, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jevons paradox, Kickstarter, low interest rates, McMansion, megaproject, Monroe Doctrine, moral hazard, new economy, Occupy movement, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, proprietary trading, quantitative easing, race to the bottom, reserve currency, rolling blackouts, Ronald Reagan, South China Sea, sovereign wealth fund, subprime mortgage crisis, The Chicago School, The Death and Life of Great American Cities, Thomas Malthus, Thorstein Veblen, too big to fail, traumatic brain injury, uranium enrichment, urban planning, urban sprawl, women in the workforce, working poor, Yom Kippur War, zero-sum game

Regardless of what story made the most headlines at the time, oil prices were lurking at the root of the problem. Consider the first oil shock, created by the Organization of Petroleum Exporting Countries (OPEC) following the Yom Kippur War in 1973. Set off by this Arab-Israeli conflict, OPEC’s Arab members turned off the taps on roughly 8 percent of the world’s oil supply by cutting shipments to the United States and other Israeli allies. Crude prices spiked, and by 1974 real GDP in the United States had shrunk by 2.5 percent. The second OPEC oil shock happened during Iran’s revolution and the subsequent war with Iraq. Disruptions to Iranian production during the revolution sent crude prices higher, pushing the North American economy into a recession for the first half of 1980.

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The stakes are high, and we can’t afford to lose, but we also have much to gain. [ CHAPTER 1 ] CHANGING THE ECONOMIC SPEED LIMIT THOSE WHO WERE AROUND IN THE 1970s will remember when speed limits were lowered in an attempt to stop drivers from burning so much gasoline. In the United States, the first OPEC oil shock spooked the president so much that he established a national speed limit of fifty-five miles per hour through the Emergency Energy Conservation Act. A slower speed limit didn’t win Richard Nixon any fans among car-loving voters, but his hand was forced by oil prices that were punishing the US economy.

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From trading around $30 a barrel in 2004, oil prices marched steadily higher before hitting a peak of $147 a barrel in the summer of 2008. Unlike past oil price shocks, this time there wasn’t even a supply disruption to blame. The spigot was wide open. The problem was, we could no longer afford to buy what was flowing through it. There are many ways an oil shock can deep-six an economy. When prices spike, most of us have little choice but to open our wallets and shell out more for what we burn. Unless we want to stop driving our cars or burning heating oil, what else can we do? Something has to give. Paying more for oil means we have less cash to spend on food, shelter, furniture, clothes, travel and pretty much anything else you can think of.

A Brief History of Motion: From the Wheel, to the Car, to What Comes Next by Tom Standage

accelerated depreciation, active transport: walking or cycling, autonomous vehicles, back-to-the-city movement, bike sharing, car-free, carbon footprint, Cesare Marchetti: Marchetti’s constant, Chris Urmson, City Beautiful movement, Clapham omnibus, congestion charging, coronavirus, COVID-19, deep learning, Didi Chuxing, Donald Shoup, driverless car, Elaine Herzberg, Elon Musk, flex fuel, Ford Model T, Ford paid five dollars a day, garden city movement, General Motors Futurama, Ida Tarbell, Induced demand, interchangeable parts, invention of the wheel, James Watt: steam engine, Jane Jacobs, jitney, Joan Didion, John Zimmer (Lyft cofounder), Lewis Mumford, lockdown, Lyft, Marshall McLuhan, minimum wage unemployment, oil shock, Own Your Own Home, peak oil, prompt engineering, Ralph Nader, Richard Florida, ride hailing / ride sharing, Rosa Parks, safety bicycle, self-driving car, social distancing, Steve Jobs, streetcar suburb, tech bro, The Death and Life of Great American Cities, trade route, Travis Kalanick, Uber and Lyft, uber lyft, unbiased observer, Unsafe at Any Speed, Upton Sinclair, urban planning, urban sprawl, Victor Gruen, W. E. B. Du Bois, walkable city, white flight, wikimedia commons, Yom Kippur War, Zipcar

For the first time, American drivers realized they could not take the supply of gasoline for granted. The oil shock led the government to introduce a national speed limit of 55 mph, and fuel-economy standards that required American manufacturers to achieve an average fuel economy, across their entire product lines, of 18 miles per gallon by 1978 and 27.5 by 1985. But American carmakers did little to change their products. By the late 1970s, 80 percent of American-made cars still had V-8 engines. In 1979, in a second oil shock, oil supplies from the Middle East were once again disrupted, this time as a result of the Islamic revolution in Iran and the outbreak the following year of the Iran-Iraq War.

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Perhaps a breakthrough in cellulosic-alcohol production could have led to a different world; but despite renewed efforts in the twenty-first century, such a breakthrough has yet to occur. And even if it had done so, oil would probably have remained a cheaper option—financially, at least. But relying on oil turned out to have other costs. OIL SHOCKS AND ELECTRIC DISAPPOINTMENTS Overproduction of oil, not scarcity, was the main concern in 1930s as the Depression reduced demand, even as new reserves were discovered. At one point a barrel of oil could be bought in Oklahoma for a mere forty-six cents. With the backing of the government, American oil companies were also expanding overseas, and by the mid-1930s they had won concessions in countries including Bahrain, Iraq, Kuwait, Saudi Arabia, and Venezuela.

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In 1979, in a second oil shock, oil supplies from the Middle East were once again disrupted, this time as a result of the Islamic revolution in Iran and the outbreak the following year of the Iran-Iraq War. The actual production of oil barely fell, but prices soared and panic buying ensued. This second oil shock stimulated the demand for smaller cars. Sales of small hatchbacks increased in Europe, while in America, more buyers were turning to imported cars, 80 percent of which came from Japan. As well as being more economical to run than much-larger American cars, models from Japanese brands such as Datsun, Toyota, and Honda also proved to be more reliable. By 1980, Japanese cars accounted for 16 percent of the American market, up from 3.5 percent in 1970.

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Early on during these developments, James Tobin (1918–2002), a distinguished economist at Yale and a Nobel Prize winner in 1981, proposed a tax on each forex transaction to slow down the hectic pace of the dealings. The world had never before seen so many currencies being required to carry on trade, and in which bonds and equities and other financial assets could be bought and sold. Tobin’s proposal is still being debated after 40-plus years. The Oil Shock Just at this juncture, inflation became a global problem. Decades of persistent full employment had strengthened the trade unions and made the wage demands of workers irresistible. There had been a notion for many years before World War II that the share of wages in total national income was constant.

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Indeed the debate about the Phillips curve can be understood in this way. Could the workers be fobbed off with just nominal wage rises which could then be clawed back by inflation? The price of oil had not risen for nearly 50 years up until 1973. The Arab-Israeli War was one proximate reason for the oil shock. But the persistence of inflation meant that the purchasing power of the dollar, in which oil was priced, was eroding as far as oil exporters were concerned. The quadrupling of the price of oil in October 1973 was partly a political gesture, but it had a profound economic impact in terms of both theory and practice.

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The rise in the price of oil increased costs of manufacturing, which were passed on to consumers in the form of higher prices. Dependence on imports for oil supplies meant that the developed economies had to transfer as much as 5 percent of their GDP to oil-exporting countries. Even as their imports became expensive, the rich countries’ exports were being priced out of the market. A side effect of the “oil shock” was felt by the financial system. The oil-exporting economies had limited scope for spending their newfound wealth. To begin with they chose to leave their wealth as bank deposits. Western banks found themselves flush with deposits. But to service them, they needed to loan them out and earn some interest.

Rethinking Islamism: The Ideology of the New Terror by Meghnad Desai

Ayatollah Khomeini, battle of ideas, Berlin Wall, Dr. Strangelove, full employment, global village, illegal immigration, income per capita, invisible hand, liberal capitalism, liberation theology, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, Nelson Mandela, oil shock, purchasing power parity, Ronald Reagan, structural adjustment programs, The Wealth of Nations by Adam Smith, Timothy McVeigh, Yom Kippur War

.฀ The฀ quadrupling฀ of฀ the฀ oil฀ price฀ was฀ a฀ huge฀ shock฀ for฀ the฀ oil-dependent฀ Western฀ economies฀ and฀ it฀ cost฀ them฀ ฀per฀cent฀of฀their฀national฀income,฀which฀was฀transferred฀to฀the฀ OPEC฀countries,฀mainly฀Saudi฀Arabia,฀the฀Gulf฀Emirates฀and฀Iran.฀ It฀ was฀ the฀ largest฀ such฀ transfer฀ in฀ recent฀ history.฀ It฀ amounted฀ to฀ $฀ billion฀ at฀ ฀ prices,฀ and฀ at฀ today’s฀ prices฀ about฀ ten฀ times฀ that฀amount. The฀ quadrupling฀ of฀ the฀ oil฀ price฀ –฀ the฀ oil฀ shock฀ as฀ it฀ came฀ to฀ be฀ known฀ –฀ was฀ perhaps฀ overdue.฀ The฀ price฀ of฀ a฀ barrel฀ of฀ crude฀ had฀not฀changed฀for฀nearly฀฀years,฀while฀inflation฀had฀been฀accelerating฀in฀the฀USA฀and฀elsewhere฀since฀.฀In฀the฀immediate฀ aftermath,฀it฀triggered฀stagflation,฀a฀combination฀of฀high฀inflation฀ and฀ high฀ unemployment,฀ in฀ many฀ developed฀ countries.฀ In฀ the฀ longer฀ run,฀ though,฀ it฀ helped฀ them฀ adopt฀ better฀ energy-saving฀ technologies.

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.฀ This฀ was,฀ Bin฀ Laden฀ claimed,฀ not฀ the฀ crisis฀ of฀ a฀ single฀ Muslim฀ country฀but฀of฀the฀umma฀itself.฀ What฀enabled฀Bin฀Laden฀to฀leverage฀a฀number฀of฀local฀battles฀between฀the฀religious฀parties฀and฀the฀secular฀authorities฀into฀a฀global฀ struggle฀was฀the฀quite฀independent฀developments฀that฀we฀now฀call฀ globalisation.฀This฀was฀another฀strand฀of฀the฀forces฀unleashed฀by฀ ฀and฀the฀oil฀shock.฀It฀led฀to฀a฀loss฀of฀competitiveness฀for฀Western฀manufacturing฀enterprises฀and฀the฀movement฀of฀manufacturing฀ away฀from฀the฀Western฀economies.฀It฀also฀led฀to฀a฀proliferation฀of฀ financial฀innovations฀and฀institutions฀as฀the฀world฀tried฀to฀absorb฀ the฀$฀billion฀of฀petrodollars฀which฀sat฀in฀Western฀banks฀and฀had฀ to฀ be฀ loaned฀ out฀ to฀ Third฀ World฀ governments.฀ Western฀ governments฀soon฀retrenched,฀abandoned฀Keynesian฀policies฀and฀squeezed฀ inflation฀ out฀ of฀ their฀ economies.฀ In฀ the฀ process฀ the฀ two฀ AngloSaxon฀economies,฀the฀USA฀and฀the฀UK,฀began฀to฀deregulate฀capital฀ movements฀so฀that฀it฀started฀to฀flow฀freely฀to฀all฀parts฀of฀the฀world฀   ฀  where฀ there฀ were฀ market฀ economies.฀ Technological฀ developments฀ in฀ information฀ processing,฀ telecommunications฀ and฀ transport฀ at฀ the฀same฀time฀had฀made฀travel฀and฀communications฀cheap฀beyond฀ imagination.

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.฀ Technological฀ developments฀ in฀ information฀ processing,฀ telecommunications฀ and฀ transport฀ at฀ the฀same฀time฀had฀made฀travel฀and฀communications฀cheap฀beyond฀ imagination.฀The฀World฀Wide฀Web฀arrived฀in฀the฀s฀and฀gave฀ even฀the฀most฀isolated฀individual฀access฀to฀information฀about฀the฀ means฀of฀terror฀and฀enabled฀contact฀with฀friends฀in฀any฀part฀of฀the฀ world. The฀ oil฀ shock฀ also฀ accelerated฀ international฀ migration,฀ which฀ had฀slowed฀down฀after฀the฀First฀World฀War฀and฀resumed฀after฀฀ but฀ was฀ still฀ limited.฀ Full฀ employment฀ in฀ the฀ West฀ had฀ created฀ a฀ need฀ for฀ unskilled฀ labour฀ which฀ the฀ periphery฀ of฀ the฀ British,฀ Dutch฀and฀French฀empires฀was฀quite฀willing฀to฀provide.

Road to Nowhere: What Silicon Valley Gets Wrong About the Future of Transportation by Paris Marx

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, A Declaration of the Independence of Cyberspace, Airbnb, An Inconvenient Truth, autonomous vehicles, back-to-the-land, Berlin Wall, Bernie Sanders, bike sharing, Californian Ideology, car-free, carbon credits, carbon footprint, cashless society, clean tech, cloud computing, colonial exploitation, computer vision, congestion pricing, corporate governance, correlation does not imply causation, COVID-19, DARPA: Urban Challenge, David Graeber, deep learning, degrowth, deindustrialization, deskilling, Didi Chuxing, digital map, digital rights, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Elaine Herzberg, Elon Musk, energy transition, Evgeny Morozov, Extinction Rebellion, extractivism, Fairchild Semiconductor, Ford Model T, frictionless, future of work, General Motors Futurama, gentrification, George Gilder, gig economy, gigafactory, global pandemic, global supply chain, Google Glasses, Google X / Alphabet X, green new deal, Greyball, high-speed rail, Hyperloop, independent contractor, Induced demand, intermodal, Jane Jacobs, Jeff Bezos, jitney, John Perry Barlow, Kevin Kelly, knowledge worker, late capitalism, Leo Hollis, lockdown, low interest rates, Lyft, Marc Benioff, market fundamentalism, minimum viable product, Mother of all demos, move fast and break things, Murray Bookchin, new economy, oil shock, packet switching, Pacto Ecosocial del Sur, Peter Thiel, pre–internet, price mechanism, private spaceflight, quantitative easing, QWERTY keyboard, Ralph Nader, Richard Florida, ride hailing / ride sharing, Ronald Reagan, safety bicycle, Salesforce, School Strike for Climate, self-driving car, Sidewalk Labs, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Silicon Valley startup, smart cities, social distancing, Southern State Parkway, Steve Jobs, Stewart Brand, Stop de Kindermoord, streetcar suburb, tech billionaire, tech worker, techlash, technological determinism, technological solutionism, technoutopianism, the built environment, The Death and Life of Great American Cities, TikTok, transit-oriented development, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Unsafe at Any Speed, urban planning, urban renewal, VTOL, walkable city, We are as Gods, We wanted flying cars, instead we got 140 characters, WeWork, Whole Earth Catalog, Whole Earth Review, work culture , Yom Kippur War, young professional

Los Angeles was the premier automotive city, but by the 1960s it was beset by heavy smog produced by the exhaust fumes of all the vehicles zipping around the expanding communities of the basin. That prompted the federal government to invest in developing better electric vehicles, especially after the 1973 oil shock. But, once again, concepts by General Motors and the American Motor Company, as well as vehicles that made it into small-scale production such as Enfield Automotive’s two-seater Enfield 8000, failed to catch on. Not until the 1990s did the electric car get serious attention from the major automakers, spurring the slow creation of the modern electric vehicle industry.

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His parents were engaging in an unconscious process that happens every single day when parents normalize the existing social conditions and downplay the harms that accompany them to their children. But in this case, it was not working, and that may have been a reflection of broader social dynamics playing out in the mid-1970s. Three years earlier, the world had experienced the first of the oil shocks of that decade. In October 1973, the Organization of Arab Petroleum Exporting Countries declared an oil embargo on the countries supporting Israel in the Yom Kippur War, including the United States, the United Kingdom, and Canada, but it also caused the price of oil to soar even for countries that were not embargoed.

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By 1983, the New York Times was reporting that people had been using their bikes instead of their cars and going on walks to relieve their stress instead of taking long drives. People also wanted to economize on heating costs, which led them to keep their homes cooler in the winter and warmer in the summer, and the size of new homes actually shrank.4 The oil shocks of the 1970s presented a rare opportunity for the United States to rethink how it used energy and planned communities. President Jimmy Carter, who was inaugurated in January 1977, put solar panels on the White House and invested federal funds into developing renewable energy. But the change did not take hold, as anyone can see if they visit US towns and cities today, where most people continue to depend on their cars and trucks, not so much out of choice but necessity.

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

3D printing, agricultural Revolution, Alan Greenspan, Anthropocene, Apollo 11, back-to-the-land, banking crisis, banks create money, Bear Stearns, biodiversity loss, Bretton Woods, business cycle, carbon footprint, Carmen Reinhart, clean water, cloud computing, collateralized debt obligation, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, degrowth, dematerialisation, demographic dividend, Deng Xiaoping, Elliott wave, en.wikipedia.org, energy transition, falling living standards, financial deregulation, financial innovation, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, global village, green transition, happiness index / gross national happiness, I think there is a world market for maybe five computers, income inequality, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jevons paradox, Kenneth Rogoff, late fees, liberal capitalism, low interest rates, mega-rich, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, naked short selling, Naomi Klein, Negawatt, new economy, Nixon shock, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, price stability, private military company, quantitative easing, reserve currency, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, short selling, special drawing rights, systems thinking, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, tulip mania, WikiLeaks, working poor, world market for maybe five computers, zero-sum game

Hamilton again: “At a minimum it is clear that something other than [I would say: “in addition to”] housing deteriorated to turn slow growth into a recession. That something, in my mind, includes the collapse in automobile purchases, slowdown in overall consumption spending, and deteriorating consumer sentiment, in which the oil shock was indisputably a contributing factor.” Moreover, Hamilton notes that there was “an interaction effect between the oil shock and the problems in housing.” That is, in many metropolitan areas, house prices in 2007 were still rising in the zip codes closest to urban centers but already falling fast in zip codes where commutes were long.34 FIGURE 27. Real Oil Prices and Recessions.

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Charles Maxwell, quoted in Wallace Forbes, “Bracing For Peak Oil Production by Decade’s End,” Forbes.com, posted September 13, 2010; Eoin O’Carroll, “Pickens: Oil Production Has Peaked,” The Christian Science Monitor, posted June 18, 2008. 7. Clint Smith, “New Zealand Parliament Peak Oil Report: The Next Oil Shock?” Energy Bulletin, posted October 1, 2010, energybulletin.net/stories/2010-10-14/next-oil-shock; Stefan Schultz, “Military Study Warns of a Potentially Drastic Oil Crisis,” Spiegel Online, posted September 1, 2010; UK Industry study; US Joint Forces Command, The Joint Operating Environment 2010 (Suffolk, VA: USJFCOM, 2010). 8. See, for example, peakoil.net/headline-news/toyota-we-must-address-the-inevitability-of-peak-oil. 9.

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In its authoritative 2010 World Energy Outlook, the IEA announced that total annual global crude oil production will probably never surpass its 2006 level.2 However, the agency fudged the question a bit by declaring that the peak was not due to geological constraints, and that total volumes of liquid fuels (including crude oil, biofuels, synthetic oil from tar sands and coal, and natural gas liquids like butane and propane) will continue to grow — just a bit — until 2035. In discussing the IEA report, a few analysts declared that these latter claims were essentially just efforts to avoid panicking the markets.3 BOX 3.1 Oil Shock 2011? In the early months of 2011 street demonstrations erupted in Iraq, Iran, Tunisia, Egypt, Bahrain, Yemen, Libya, and Algeria. Libya became mired in civil war, and its rate of oil exports fell from 1.3 million barrels per day to a small fraction of that amount. In Saudi Arabia, banned opposition groups threatened a “day of rage.”

Oil Panic and the Global Crisis: Predictions and Myths by Steven M. Gorelick

California gold rush, carbon footprint, energy security, energy transition, flex fuel, Ford Model T, income per capita, invention of the telephone, Jevons paradox, meta-analysis, North Sea oil, nowcasting, oil shale / tar sands, oil shock, peak oil, price elasticity of demand, price stability, profit motive, purchasing power parity, RAND corporation, statistical model, stock buybacks, Thomas Malthus

Recessionary pressures diminished only when the price of oil dropped during the 1980s, falling by nearly half from 1985 to 1986 ($27.56 to $14.43 per barrel). Although the spot price of oil in 2008 exceeded $145 per barrel, the 2008 average oil price took five years to double in inflation-adjusted terms; the price rise was much slower than during the 1970s’ oil shock. In terms of speed and magnitude, the oil price rise of 2008 itself was well tolerated by the economies of the world. It was the global financial crisis that began in 2008 that overwhelmed the world economy. Consequently demand and price dropped precipitously. Historically, the oil price increases of the 1860s, 1910s, and 1970s were each followed by a decade of declining oil prices.130 Before the economic crisis that began in 2008, the US economy stood up well to high oil prices for several reasons.

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A second reason for the resilience of the US economy in the face of the high oil prices of 2008 was that, although China consumed more and more of the world’s oil, it produced cheap manufactured goods. Obtaining such inexpensive goods counterbalanced the inflationary impact of higher oil prices in the US. Third, a school of economic thought claims that there was a historical break in the effects of oil price shocks on economies such that subsequent oil shocks are not likely to be inflationary or cause a recession. Reasons for this break include decreased energy-use intensity, deregulation of key energy-producing and energy-consuming industries, and governmental monetary policy changes that have encouraged a low-inflation environment. However, as with many 6 Gasoline cost as a percent of 4 disposable income 2 0 1950 1970 1990 Figure 4.54 The cost of US gasoline consumption relative to personal disposable income.

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However, as with many 6 Gasoline cost as a percent of 4 disposable income 2 0 1950 1970 1990 Figure 4.54 The cost of US gasoline consumption relative to personal disposable income. (Data: gasoline prices, EIA; US income, US Bureau of Economic Affairs) 2010 156 Counter-Arguments to Imminent Global Oil Depletion economic theories, it is not conclusive that any of these links is responsible for the relative insensitivity of the US economy to oil shocks.131,132 Myth VI: There Are No Substitutes for Oil Oil is different because there are no substitutes. This is another claim of those who maintain that the world is running out. But is it true? In terms of substitution, is oil different from other non-renewable commodities, such as copper and iron?

Earth Wars: The Battle for Global Resources by Geoff Hiscock

Admiral Zheng, Asian financial crisis, Bakken shale, Bernie Madoff, BRICs, butterfly effect, carbon tax, clean tech, clean water, corporate governance, demographic dividend, Deng Xiaoping, Edward Lorenz: Chaos theory, energy security, energy transition, eurozone crisis, Exxon Valdez, flex fuel, Ford Model T, geopolitical risk, global rebalancing, global supply chain, Great Leap Forward, high-speed rail, hydraulic fracturing, Long Term Capital Management, Malacca Straits, Masayoshi Son, Masdar, mass immigration, megacity, megaproject, Menlo Park, Mohammed Bouazizi, new economy, oil shale / tar sands, oil shock, Panamax, Pearl River Delta, purchasing power parity, Ralph Waldo Emerson, RAND corporation, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, smart grid, SoftBank, Solyndra, South China Sea, sovereign wealth fund, special economic zone, spice trade, trade route, uranium enrichment, urban decay, WikiLeaks, working-age population, Yom Kippur War

Long History on the Nuclear Road Japan had been travelling the nuclear road for 40 years, having opened the Fukushima plant in March 1971 in response to environmental concerns and the 1967 oil export embargo imposed by some Arab producers following the Six-Day War between Israel and its Arab neighbours. That brief embargo was followed by the much more severe “oil shock” of 1973–1974, when Arab producers within the Organization of Petroleum Exporting Countries (OPEC) declared sharp price rises, production cuts, and an oil embargo targeting the United States and some other Western nations over their support for Israel in its October 1973 Yom Kippur War with Syria and Egypt. This second oil shock encouraged Japan and other advanced economies to further embrace the nuclear option. A third oil shock came in 1979, when the Iranian Revolution disrupted production there, sending global oil prices higher.

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Although they are able to recycle some from discarded computers, mobile phones, and other electronic detritus, they get most of their supply from China. In fact, between 50 and 60 percent of China’s rare earth exports go to Japanese buyers. But in September 2010, the buyers suffered something akin to a mini “oil shock.” Their supplies from China slowed to a crawl, tied down by the sort of bureaucratic double-shuffling that the Japanese themselves once employed as a nontariff barrier against unwanted imports. There was no export ban, the Chinese declared, but the result was the same: shipments ground to a halt, and the Japanese electronics industry got very nervous.

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Its 58 reactors, operated by state majority-owned nuclear power utility Electricite de France (EDF), produce 75 percent of its electricity, and the country has so much spare capacity that EDF exports more than 10 percent of its output to neighbours such as Germany, Italy, Spain, Switzerland, Belgium, and the United Kingdom. Energy independence, a policy pursued by France since the oil shocks of the 1970s, is at the heart of nuclear power’s prominence in France, and even with the inroads made by renewable energy sources and cheaper gas, nuclear is unlikely to lose much ground. France actively champions its nuclear capabilities. Areva, another state-owned (90 percent) entity, is the world’s largest nuclear company, and has multiple agreements and joint ventures around the world aimed at securing uranium supplies, processing deals, technology development—such as with Siemens in Germany—and customers for its nuclear reactors.

The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin

anti-communist, Ascot racecourse, Ayatollah Khomeini, bank run, Berlin Wall, book value, British Empire, Carl Icahn, colonial exploitation, Columbine, continuation of politics by other means, cuban missile crisis, disinformation, do-ocracy, energy security, European colonialism, Exxon Valdez, financial independence, fudge factor, geopolitical risk, guns versus butter model, Ida Tarbell, informal economy, It's morning again in America, joint-stock company, junk bonds, land reform, liberal capitalism, managed futures, megacity, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, old-boy network, postnationalism / post nation state, price stability, RAND corporation, rent-seeking, Ronald Reagan, shareholder value, stock buybacks, Suez canal 1869, Suez crisis 1956, Thomas Malthus, tontine, vertical integration, Yom Kippur War

When the wave finally spent its fury two years later, the survivors would look around and find themselves beached on a totally new terrain. Everything was different; relations among all of them were altered. The wave would generate the Second Oil Shock, carrying prices from thirteen to thirty-four dollars a barrel, and bringing massive changes not only in the international petroleum industry but also, for the second time in less than a decade, in the world economy and global politics. The new oil shock passed through several stages. The first stretched from the end of December 1978, when Iranian oil exports ceased, to the autumn of 1979. The loss of Iranian production was partly offset by increases elsewhere.

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Not only were those developing nations hit by the same recessionary and inflationary shocks, but the price increases also crippled their balance of payments, constraining their ability to grow, or preventing growth altogether. They suffered further from the restrictions on world trade and investment. The way out for some was to borrow, and therefore, a goodly number of those OPEC surplus dollars were "recycled" through the banking system to these developing countries. Thus, they coped with the oil shock by the expedient of going into debt. But a new category also had to be invented—the "fourth world"—to cover the lower tier of developing countries, which were knocked flat on their backs and whose poverty was reinforced. The new and very difficult problems of the developing countries put the oil exporters into an awkward, even embarrassing situation.

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For, most forecasters agreed, another oil crisis was highly probable a decade or so hence, in the second half of the 1980s, when demand would once again be at the very edge of available supply. The result, in popular parlance, was likely to be an "energy gap," a shortage. In economic terms, any such imbalance would be resolved by another major price increase, a second oil shock, as had happened in the early 1970s. Though variations were to be found among the forecasts, there was considerable unanimity on the central themes, whether the source was the major oil companies, the CIA, Western governments, international agencies, distinguished independent experts, or OPEC itself.

State of Emergency: The Way We Were by Dominic Sandbrook

anti-communist, Apollo 13, Arthur Marwick, back-to-the-land, banking crisis, Bretton Woods, British Empire, centre right, collective bargaining, Corn Laws, David Attenborough, Doomsday Book, edge city, estate planning, Etonian, falling living standards, fear of failure, Fellow of the Royal Society, feminist movement, financial thriller, first-past-the-post, fixed income, full employment, gentrification, German hyperinflation, global pandemic, Herbert Marcuse, mass immigration, meritocracy, moral panic, Neil Kinnock, new economy, New Urbanism, Norman Mailer, North Sea oil, oil shock, Own Your Own Home, post-war consensus, sexual politics, traveling salesman, union organizing, upwardly mobile, urban planning, Winter of Discontent, young professional

‘I realised very quickly’, said Anthony Barber, ‘that all we’d been trying to achieve was really coming to an end.’46 But it is also a myth that the oil shock was always bound to bring doom and disaster in its wake. In the United States – which was punished even more severely than Britain, because of its support for Israel – the Nixon and Ford administrations managed to weather the economic blizzard without plunging the economy into a devastating bout of inflation, and although there was a prolonged and painful recession, the American economy was in recovery by early 1976. But coming after three draining years of industrial conflict, pay restraint and rhetorical class warfare, the oil shock brought out the very worst in British politics.

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The NUM was still considering the Coal Board’s offer when, on 16 October, OPEC broke the devastating news of their oil price rise, which changed the game completely. Not only did the oil shock put Heath’s counter-inflation policy under intense pressure, it left the miners in an even stronger position. Britain depended heavily on imported oil to meet its energy requirements; indeed, since 1972 the government had been quietly building up coal stocks by burning more oil instead. Thanks to the oil shock, however, the government could hardly rely on imported oil if negotiations with the miners broke down; indeed, with North Sea oil yet to come on stream, OPEC’s blackmail had left Britain more dependent on coal than ever.

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After toiling through ‘years of austerity … suddenly here it all was, the world of Penthouse and the Beatles, the world of large steaks and double cream on real gateaux, the world of girls and nightclubs and expense account champagne’.9 And even though millions of people never went to nightclubs or quaffed champagne, they still enjoyed their slice of the ever-expanding cake. By 1973, one in three people told researchers they had gone out for a meal in the previous month, a luxury few of their parents could have imagined. And despite all the economic turmoil of the early 1970s, the strikes and inflation, the oil shock and the power cuts, most of Bexley’s voters remained far more prosperous than they could have expected twenty years before. Three years after Edward Heath had walked into 10 Downing Street, there were more cars on the roads than ever, more products on the supermarket shelves, more colour televisions in suburban homes, more planes taking off for the beaches of Spain.10 As a relatively affluent, Conservative-voting slice of London suburbia, Bexley was not exactly representative of the national experience at the dawn of the 1970s.

The Atlantic and Its Enemies: A History of the Cold War by Norman Stone

affirmative action, Alvin Toffler, Arthur Marwick, Ayatollah Khomeini, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, British Empire, business cycle, central bank independence, Deng Xiaoping, desegregation, disinformation, Dissolution of the Soviet Union, European colonialism, facts on the ground, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, gentrification, Gunnar Myrdal, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Herbert Marcuse, illegal immigration, income per capita, interchangeable parts, Jane Jacobs, Joseph Schumpeter, junk bonds, labour mobility, land reform, long peace, low interest rates, mass immigration, means of production, Michael Milken, Mikhail Gorbachev, military-industrial complex, Mitch Kapor, Money creation, new economy, Norman Mailer, North Sea oil, oil shock, Paul Samuelson, Phillips curve, Ponzi scheme, popular capitalism, price mechanism, price stability, RAND corporation, rent-seeking, Ronald Reagan, Savings and loan crisis, scientific management, Seymour Hersh, Silicon Valley, special drawing rights, Steve Jobs, Strategic Defense Initiative, strikebreaker, Suez crisis 1956, The Death and Life of Great American Cities, trade liberalization, trickle-down economics, V2 rocket, War on Poverty, Washington Consensus, Yom Kippur War, éminence grise

The oil producers, left to themselves, would have been far too disunited for common action, and their common strategy at OPEC did not in fact last for very long. But the fall of the dollar in 1971 pushed them together: why accept valueless paper dollars? The same was true, though not to the same extent, for producers of other raw materials - coffee, tobacco, copper, rubber, iron ore, meat as well - and prices shot up, even in 1971, two years before the oil shock. The problem was symbolized by the Brazilian city of Manaos, deep in the jungle. There, once upon a time, rubber had appeared, and the place became opulent: famously Dame Adeline Patti, the great opera singer of the 1890s, appeared there. Then rubber was produced elsewhere, and Manaos relapsed back into semi-jungle.

…

For a time, this seemed to work. Unemployment did indeed fall to 500,000, but this was classic fool’s gold. The ‘fringe banks’ for a time did well out of property prices, which had a dangerously more important role in England than elsewhere, and unlovely concrete spread and spread and spread. But then came the oil shock. Even food prices trebled by 1974 as against 1971, and the bubble burst in November 1973, when the minimum lending rate was pushed up to 13 per cent while public spending was cut back by £12bn. One of the new banks could not obtain credit, and the other banks had to set up a ‘lifeboat’. It was not enough.

…

By 1976 the Treasury itself was somewhat converted to the idea of monetarism, a limitation of the quantity of money such that inflation could be contained. But the conversion was not enthusiastic. The Bank (and the City) expressed greater enthusiasm. It was an unhappy time, the country winding down, and a slow crisis started. In 1976-7 the world economy did pick up, as the oil-shock money was recycled back to the industrial and exporting countries (which grew overall at 5 per cent). But the British economy was by now too fragile to gain much more than a respite, and inflation still ran high - 25 per cent in 1975, 16 per cent in 1976 and in 1977 (earnings keeping apace until 1977).

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt by Kwasi Kwarteng

accounting loophole / creative accounting, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, Atahualpa, balance sheet recession, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, California gold rush, capital controls, Carmen Reinhart, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, Deng Xiaoping, discovery of the americas, Etonian, eurozone crisis, fiat currency, financial engineering, financial innovation, fixed income, floating exchange rates, foreign exchange controls, Francisco Pizarro, full employment, German hyperinflation, Glass-Steagall Act, guns versus butter model, hiring and firing, income inequality, invisible hand, Isaac Newton, it's over 9,000, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, land bank, liberal capitalism, low interest rates, market bubble, money: store of value / unit of account / medium of exchange, moral hazard, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, plutocrats, Ponzi scheme, price mechanism, quantitative easing, rolodex, Ronald Reagan, South Sea Bubble, subprime mortgage crisis, Suez canal 1869, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, The Wealth of Nations by Adam Smith, too big to fail, War on Poverty, Yom Kippur War

Contemporaries spoke of the ‘Great Recession’. It was recalled that the ‘price of oil had actually been falling through most of the postwar period, both absolutely and in relation to other world prices’.17 The oil shock of 1973 led to ‘visions of financial disaster for the west’. The spike in oil prices had increased all costs in the Western economies, which were heavily dependent on oil. ‘Prices were higher and employment lower’ as a consequence of the oil shock.18 Despite the arguments of a later generation of economists, contemporaries were very clear about the direct causal link between higher oil prices, increased inflation and stagnant economies.

…

The Saudis had bought ‘all over the world and they sent the goods home’, but then they ‘couldn’t get anything off the ships and into use’.26 Increased revenues, which flowed into the treasuries of the oil-exporting countries, altered the international economic environment. David Rockefeller, scion of the wealthy dynasty and Chairman of the Chase Manhattan Bank, recalled that the ‘most immediate effect of the oil shock was the surge in the flow of dollars from oil-importing nations into OPEC’s coffers. Between 1973 and 1977, the earnings of the oil-exporting nations expanded 600 percent, to US$140 billion.’ There lay the problem confronting the world monetary system. The enormous dollar reserves acquired by the oil exporters needed to find some outlet.

…

Loans were also extended to Latin America, Africa, East Asia and other parts of the developing world.30 Other American bankers and senior officials began to express anxiety about the political and economic outlook. Paul Volcker, the future Chairman of the Federal Reserve, remembered that by mid-decade the ‘combination of accelerating inflation and the oil shock late in 1973’ went far in ‘establishing floating currencies as the . . . international monetary system’. The mid-1970s were marked by ‘what was then the most serious of the postwar recessions’ and by ever-higher inflation. Floating currencies, and the end of any link to gold, were a novel feature of the period.

The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin

"Hurricane Katrina" Superdome, "World Economic Forum" Davos, accelerated depreciation, addicted to oil, Alan Greenspan, Albert Einstein, An Inconvenient Truth, Asian financial crisis, Ayatollah Khomeini, banking crisis, Berlin Wall, bioinformatics, book value, borderless world, BRICs, business climate, California energy crisis, carbon credits, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, clean tech, Climategate, Climatic Research Unit, colonial rule, Colonization of Mars, corporate governance, cuban missile crisis, data acquisition, decarbonisation, Deng Xiaoping, Dissolution of the Soviet Union, diversification, diversified portfolio, electricity market, Elon Musk, energy security, energy transition, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, fear of failure, financial innovation, flex fuel, Ford Model T, geopolitical risk, global supply chain, global village, Great Leap Forward, Greenspan put, high net worth, high-speed rail, hydraulic fracturing, income inequality, index fund, informal economy, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, James Watt: steam engine, John Deuss, John von Neumann, Kenneth Rogoff, life extension, Long Term Capital Management, Malacca Straits, market design, means of production, megacity, megaproject, Menlo Park, Mikhail Gorbachev, military-industrial complex, Mohammed Bouazizi, mutually assured destruction, new economy, no-fly zone, Norman Macrae, North Sea oil, nuclear winter, off grid, oil rush, oil shale / tar sands, oil shock, oil-for-food scandal, Paul Samuelson, peak oil, Piper Alpha, price mechanism, purchasing power parity, rent-seeking, rising living standards, Robert Metcalfe, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Ronald Reagan, Sand Hill Road, Savings and loan crisis, seminal paper, shareholder value, Shenzhen special economic zone , Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, smart grid, smart meter, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, Suez crisis 1956, technology bubble, the built environment, The Nature of the Firm, the new new thing, trade route, transaction costs, unemployed young men, University of East Anglia, uranium enrichment, vertical integration, William Langewiesche, Yom Kippur War

It was primarily a credit recession, the result of too much debt, too much leverage, too many derivatives, too much cheap money, too much overconfidence—all of which engendered real estate and other asset bubbles in the United States and other parts of the world. But the surge in oil prices was an important contributing factor to the downturn. Between June 2007 and June 2008, oil prices doubled—an increase of $66—in absolute terms, a far bigger increase in oil prices than had ever been seen in any of the previous oil shocks, going back to the 1970s. “The surge in oil prices was an important factor that contributed to the economic recession,” observed Professor James Hamilton, one of the leading students of the relation between energy and the economy. The oil price shock interacted with the housing slowdown to tip the economy into a recession.

…

The embargo, combined with the price increases, shook the structure of international relations and sent shock waves through the global economy, followed by several years of poor economic performance. The 1978–79 Iranian Revolution, which toppled the shah and ushered in the theocratic Islamic Republic, also ignited a worldwide panic in the petroleum market and another oil shock that contributed mightily to the difficult economic years of the early 1980s. Saddam Hussein’s 1990 invasion of Kuwait set off the Gulf crisis, leading to the loss of five million barrels a day of supply from Iraq and Kuwait. Other producers, notably Saudi Arabia, cranked up output and largely replaced the missing barrels over the next several months, even before Operation Desert Storm evicted Saddam’s forces from Kuwait.

…

In Japan, too, nuclear power plants continued to come online—with more than a dozen in the decade following Chernobyl’s meltdown. But Japan’s cultural legacy regarding nuclear power was more complicated. It was the only country to have ever suffered a nuclear attack, and the politics of nuclear power could engender a powerful emotional response from voters and politicians alike. But the oil shocks of the 1970s, which threatened to undermine Japan’s postwar economic miracle, were deeply traumatic. Indeed, so much so that the political will to support the nuclear program remained strong. “Unlike the United States or the United Kingdom, Japan had no choice but to depend on imports for virtually all of its fossil-fuel supply,” said Masahisa Naitoh, a formerly senior energy official in Japan.

The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations by Sebastian Mallaby

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, Bretton Woods, capital controls, clean water, Dr. Strangelove, Dutch auction, export processing zone, failed state, financial independence, Francis Fukuyama: the end of history, gentleman farmer, guns versus butter model, Hernando de Soto, Kenneth Rogoff, Kickstarter, land reform, land tenure, lateral thinking, low interest rates, market bubble, Martin Wolf, microcredit, oil shock, Oklahoma City bombing, old-boy network, Paul Samuelson, plutocrats, purchasing power parity, radical decentralization, rolodex, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the new new thing, trade liberalization, traveling salesman, War on Poverty, Westphalian system, Yom Kippur War

The institution’s war on poverty, like America’s war on communism in Vietnam, was proving all too much for it. Without pressure from outside, McNamara might have soldiered on, preaching the cause of development at the Bank’s annual meetings each autumn, and driving his staff to come up with new ways of advancing it. But outside pressure did arrive—in the form of two successive oil shocks. McNamara’s speech in Nairobi in 1973 had been followed almost immediately by the Yom Kippur War and the Arab oil embargo; oil prices shot up, and the Bank’s oil-importing clients suddenly found their trade balance deteriorating. For a while, the pain could be postponed. The Arabs parked their windfall in Western banks, so credit became cheap; countries simply borrowed to finance imports.

…

But the Bank was on the one hand a public-sector institution, and on the other hand a promoter of free-market reform. It therefore qualified as a target for both ends of the political spectrum. In this ideological climate the “structural adjustment” lending that McNamara had proposed as a pragmatic response to the oil shock became bitterly contentious. The Bank rightly urged developing countries to devalue their currencies, a policy that they should have embraced much sooner after the 1973 shock; expensive oil was affordable only if countries boosted their exports, and that meant making their goods competitive by having a low exchange rate.

…

Adjustment was controversial from the outset, as we have seen: it was enthusiastically supported by the Bank’s Bretton Woods sister, the International Monetary Fund, but agencies like the United Nations Development Program and UNICEF were less inclined to blame Africa’s problems on policies that needed adjustment, and more apt to point the finger at the oil shock, falling commodity prices, and other misfortunes not of Africa’s own making. African leaders, not surprisingly, sided with the United Nations, and denounced the Bank’s new orthodoxy as anti-African: They wanted aid, not policy lectures.15 The Bank soon found itself prescribing the bitter medicine of economic austerity while others declared that its diagnosis was all wrong; and the sense that its credibility was on the line drove the Bank to redouble its efforts on the continent.

The Great Race: The Global Quest for the Car of the Future by Levi Tillemann

Affordable Care Act / Obamacare, An Inconvenient Truth, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, banking crisis, Bear Stearns, car-free, carbon footprint, clean tech, creative destruction, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, driverless car, electricity market, Elon Musk, en.wikipedia.org, energy security, factory automation, Fairchild Semiconductor, Ford Model T, foreign exchange controls, gigafactory, global value chain, high-speed rail, hydrogen economy, index card, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Joseph Schumpeter, Kanban, Kickstarter, manufacturing employment, market design, megacity, Nixon shock, obamacare, off-the-grid, oil shock, planned obsolescence, Ralph Nader, RFID, rolodex, Ronald Reagan, Rubik’s Cube, self-driving car, shareholder value, Shenzhen special economic zone , short squeeze, Silicon Valley, Silicon Valley startup, skunkworks, smart cities, Solyndra, sovereign wealth fund, special economic zone, Steve Jobs, Tesla Model S, too big to fail, Unsafe at Any Speed, zero-sum game, Zipcar

His father was a Lithuanian-born scrap metal dealer, and as a young man Ovshinsky himself had started his career as a lathe operator. Ovshinsky’s formal education went only as far as high school, but the public libraries were a fitful schoolroom for such a subversive genius. His self-directed study nurtured a deep streak of intellectual independence. Long before the oil shocks of the 1970s, Ovshinsky understood the environmental and geopolitical dangers of relying too much on oil to fuel an economy and set out to find alternatives. Together with his wife, Iris, he set up a “storefront lab” that eventually grew into the publicly traded company ECD Ovonics. At Ovonics, Ovshinsky invented a new family of semiconductors, hydrogen fuel cells, and thin-film solar cells.

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And so, he dryly told Angelenos, “faced with a choice between my freedom and your mobility, my freedom wins.”14 The Ruckelshaus EPA responded by proposing that the federal government should curtail development and ration gasoline shipments to California by 25 percent in summer months, with most of the cuts targeted toward the Los Angeles basin.15 Obviously, this would not be good for California’s economy—or for the automakers, or oil companies. So many in the business-minded community quickly learned to despise the EPA. Automakers in particular felt as if they were under siege: they were being required to both reduce emissions and increase fuel economy—in response to the oil shocks—at the same time. The technological burden was staggering. Technology Forcing—“Impossible” Standards All of this was very much in line with the new thinking at CARB. Tom Quinn’s attitude did not endear him to the automakers—not one bit. And under Quinn’s leadership CARB forced manufacturers out of their comfort zones—mining them for data about what was possible and pushing them precariously close to the technology frontier.

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Sometimes he would write press releases during the automakers’ testimony in order to beat industry execs to the media punch.18 Other times he would just leave a hearing for hours, return, call for a vote mid-testimony, and adjourn.19 He had little patience for Detroit’s carefully crafted lobbying campaigns and public relations stagecraft. Some would argue that Quinn went too far. The new CARB chairman carried out policy irrespective of economic conditions and seemed impervious to the difficulties faced by Detroit. Japanese imports were surging, and the first oil shock had tremendously weakened the appeal of America’s biggest, most profitable cars. And the industry’s problems did not stop there. Quality was starting to sag. By the early 1970s, the average American-made car went to market with more than two dozen defects.20 But despite these tough times, Quinn was intent on making California into America’s pressure cooker for new environmental technologies.

Postcapitalism: A Guide to Our Future by Paul Mason

air traffic controllers' union, Alan Greenspan, Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Bletchley Park, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, carbon tax, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, commons-based peer production, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, disinformation, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, false flag, financial engineering, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, fulfillment center, full employment, future of work, game design, Glass-Steagall Act, green new deal, guns versus butter model, Herbert Marcuse, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low interest rates, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, middle-income trap, Money creation, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, power law, precariat, precautionary principle, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, scientific management, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, technological determinism, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, Twitter Arab Spring, union organizing, universal basic income, urban decay, urban planning, vertical integration, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce, Yochai Benkler

The break occurs at the end of the First World War; the 1930s Depression, followed by the destruction of capital during the Second World War terminate the downswing. Late-1940s–2008: In the fourth long cycle transistors, synthetic materials, mass consumer goods, factory automation, nuclear power and automatic calculation create the paradigm – producing the longest economic boom in history. The peak could not be clearer: the oil shock of October 1973, after which a long period of instability takes place, but no major depression. In the late–1990s, overlapping with the end of the previous wave, the basic elements of the fifth long cycle appear. It is driven by network technology, mobile communications, a truly global marketplace and information goods.

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Even Japan – which had averaged growth rates close to 10 per cent in the post-war period – went briefly negative.24 The crisis was unique because in the worst-hit countries falling growth coincided with high inflation. By 1975, inflation in Britain reached 20 per cent, and 11 per cent in the USA. The word ‘stagflation’ hit the headlines. Yet even at the time it was obvious that the oil shock was merely the trigger. The upswing had already been stuttering. In each developed country, growth in the late 1960s seemed beset by national or local problems: inflation, labour troubles, productivity concerns and flurries of financial scandal. But 1973 was the watershed, the point where the energy driving the fourth wave upwards caused it to peak and then invert.

…

With this change, each stricken country was temporarily free to solve the underlying problems of productivity and profitability in ways the old system had made impossible: with higher state spending and lower interest rates. The years 1971–3 were lived in a kind of nervous euphoria. The inevitable stock market crash hit Wall Street and London in January 1973, triggering the collapse of several investment banks. The oil shock of October 1973 was the final straw. CARRY ON KEYNES By 1973, every aspect of the unique regime that had sustained the long boom was broken. But the crisis looked accidental: low input prices destroyed by OPEC; global rules ripped up by Richard Nixon; profits eroded by that figure of loathing, the ‘greedy worker’.

Living in a Material World: The Commodity Connection by Kevin Morrison

addicted to oil, Alan Greenspan, An Inconvenient Truth, barriers to entry, Berlin Wall, biodiversity loss, carbon credits, carbon footprint, carbon tax, clean water, commoditize, commodity trading advisor, computerized trading, diversified portfolio, Doha Development Round, Elon Musk, energy security, European colonialism, flex fuel, food miles, Ford Model T, Great Grain Robbery, Gregor Mendel, Hernando de Soto, Hugh Fearnley-Whittingstall, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), junk bonds, Kickstarter, Long Term Capital Management, managed futures, Market Wizards by Jack D. Schwager, Michael Milken, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, out of africa, Paul Samuelson, peak oil, planned obsolescence, price mechanism, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, uranium enrichment, vertical integration, young professional

In the simplest of acts we take raw materials for granted; like switching on a light or turning up the heating. I wanted to show T 2 | LIVING IN A MATERIAL WORLD how commodities are relevant to every body, every day – and how they are more relevant now than they have been at any time since the last oil shock nearly three decades ago (my memories of which include going to bed by candlelight during the energy rationing and three-day weeks of the 1970s). Everything we consume – whether through buying something, eating or even our physical actions – involves, at some level, the use of metals, fossil fuels or agricultural produce, which we take from planet Earth and use to make our lives more comfortable, more productive or more manageable.

…

Economic growth in developing countries has accelerated global growth at a faster pace than at any time since the 1960s. In the 1950s and 1960s, the world economy rose by 5 % due to the reconstruction of Europe and Japan, as well as the economic competition between the US and the Soviet Union. The two oil shocks in the 1970s slowed growth to about 4 %, and then to 3 %, which became the average economic growth rate of the 1980s and 1990s. Higher oil and food prices together with the credit crisis in the US have prompted economists to cut global economic growth rates to around 3 % for 2008. Some experts cite this as the start of a prolonged downturn in the global economy.

…

The credit crisis of 2007 followed a prolonged period of loose money supply where interest rates were kept below their long-term average. The combination of easy credit and high oil prices is eerily similar to the economic conditions in the early and late 1970s at the time of the world’s first two oil shocks, both of which were followed by recessions.3 The 1970s was the last time the world was seriously concerned about the supply and price of raw materials, and I refer to this period throughout the book.4 In December 1976, the US government issued a report on resource availability by the National Commission on Supplies and Shortages,5 8 | LIVING IN A MATERIAL WORLD which looked at the issue of whether the US was running out of resources and whether the country was dependent on importing raw materials from foreign countries (Eckes, 1978).

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

This created instability in the world economy, with currency values fluctuating according to market sentiments and becoming increasingly subject to currency speculation (investors betting on currencies moving up or down in value). The end of the Golden Age was marked by the First Oil Shock in 1973, in which oil prices rose fourfold overnight, thanks to the price collusion of the cartel of the oil-producing countries, OPEC (Organization of Petroleum Exporting Countries). Inflation had been slowly increasing in many countries since the late 1960s but, following the Oil Shock, it shot up. More importantly, the next several years were characterized by stagflation. This newly coined term referred to the breakdown of the age-long economic regularity that prices fall during a recession (or stagnation) and rise during a boom.

…

The war resulted in the first reversal in the acceleration in economic growth since the early nineteenth century.19 1945–73: The Golden Age of Capitalism Capitalism performs well on all fronts: growth, employment and stability The period between 1945, the end of the Second World War, and 1973, the first Oil Shock, is often called the ‘Golden Age of capitalism’. The period really deserves the name, as it achieved the highest growth rate ever. Between 1950 and 1973, per capita income in Western Europe grew at an astonishing rate of 4.1 per cent per year. The US grew more slowly, but at an unprecedented rate of 2.5 per cent.

…

This newly coined term referred to the breakdown of the age-long economic regularity that prices fall during a recession (or stagnation) and rise during a boom. Now, the economy was stagnating (albeit not exactly in a prolonged recession, like during the Great Depression) but prices were rising fast, at 10, 15 or even 25 per cent per year.27 The Second Oil Shock in 1979 finished off the Golden Age by bringing about another bout of high inflation and helping neo-liberal governments come to power in the key capitalist countries, especially in Britain and the US. This period is often depicted as one of an unmitigated economic disaster by free-market economists, who are critical of the mixed economy model.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

The Fed had been securing the exchange rate for the previous quarter century, and it had to learn how to fulfill its new role. This process was complicated greatly when the Organization of Petroleum Exporting Countries (OPEC) quadrupled the price of oil in 1973. The resulting “Oil Shock” sent many prices—including exchange rates—in motion.3 Anticipation of the Oil Shock led President Nixon to propose “Project Independence” in November 1971. Nixon’s emphasis was on domestic production and consumption, and his policy implied that the United States was to remain passive in the face of OPEC provocation. This idea was transformed over the next few years into a more active stance that would seek steady supplies of oil from the Middle East.

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This idea was transformed over the next few years into a more active stance that would seek steady supplies of oil from the Middle East. Nixon also replaced the ailing draft for Army soldiers with the volunteer army at this time, a plan he also started before the Oil Shock. The draft had become difficult as the Vietnam War dragged on, and conservatives argued against the idea of forced service. This was an early step in the privatization of the military.4 The Oil Shock also raised the question of how the members of OPEC were going to hold their newly acquired wealth. The highly regulated financial system established at Bretton Woods in the 1940s could not easily absorb this large inflow of cash, and the cash found a temporary home in the arrangement for dollar deposits outside the United States.

Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Alvin Toffler, An Inconvenient Truth, Asian financial crisis, back-to-the-land, barriers to entry, Bear Stearns, Berlin Wall, big-box store, blood diamond, Boeing 747, book value, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, clean tech, cognitive dissonance, commoditize, company town, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, Dr. Strangelove, Dutch auction, Easter island, edge city, Edward Glaeser, Eyjafjallajökull, failed state, financial engineering, flag carrier, flying shuttle, food miles, Ford Model T, Ford paid five dollars a day, Frank Gehry, fudge factor, fulfillment center, full employment, future of work, Future Shock, General Motors Futurama, gentleman farmer, gentrification, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Great Leap Forward, Haber-Bosch Process, Hernando de Soto, high-speed rail, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, Joan Didion, Kangaroo Route, Kickstarter, Kiva Systems, knowledge worker, kremlinology, land bank, Lewis Mumford, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, megaproject, Menlo Park, microcredit, military-industrial complex, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, planned obsolescence, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, SimCity, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, Suez canal 1869, sunk-cost fallacy, supply-chain management, sustainable-tourism, tech worker, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, the long tail, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, vertical integration, Virgin Galactic, walkable city, warehouse robotics, white flight, white picket fence, Yogi Berra, zero-sum game

What we couldn’t phase out was gasoline—which continues to fuel 95 percent of all vehicles—although consumers rushed to embrace fuel-efficient Japanese imports, just as they do now. As a consequence, transportation’s oil consumption grew by about 1.3 percent per year between the first oil shock of 1973 and the 2008 peak. But residential uses fell 2.1 percent, commercial uses 2.4 percent, and power generation 4.8 percent. Americans use half as much energy per capita as they did in 1973. While the decade’s oil shocks weren’t enough to wean us off fossil fuels—“the moral equivalent of war” in President Carter’s famous formulation—they did spur us to greater efficiency. Before the crisis in 1973, global oil consumption grew 8 percent a year.

…

The number of passengers in the United States this year is expected to hover around seven hundred million, 10 percent off its peak but still triple what it was in 1980. It’s grown five times faster than population since then. In thirty years, the number of miles flown by Americans dipped only once before our current crisis, in the wake of 9/11. Neither the early eighties oil shocks nor the first Gulf War slowed us down. Air travel follows the money. It’s a leading indicator of economic health, flying higher when times are good and falling faster when they turn bad. As it is, six hundred thousand Americans hopped a flight last week, more than the population of Milwaukee. Hubs are easily the world’s most central places, concentrating us like nowhere else.

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This was hardly unexpected—Sheikh Mohammed’s father, Sheikh Rashid, knew it not long after oil was discovered in the 1960s. The knowledge defined Dubai, forcing its rulers to diversify and imagineer. While Abu Dhabi threw up topaz and tourmaline towers Dallas-style in the 1970s, Sheikh Rashid plowed his oil-shock profits into infrastructure. It was during his reign that Dubai built its ports, airport, drydocks, World Trade Center, and the first banks and hotels to cater to traders like Marwan Bibi. His greatest legacy was Jebel Ali, the largest man-made harbor ever created, carved from a stretch of empty beach.

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

During the Nixon administration, the President’s Commission on Income Maintenance recommended a basic income guarantee for low-income Americans, the Family Assistance Plan. The plan was never enacted, although the Earned Income Tax Credit had its origin in this idea. When the Family Assistance Plan stalled and died, the political will to broaden the social safety net evaporated under economic pressure. Stagflation, the oil shocks of the 1970s, and deindustrialization brought malaise to the United States. These conditions enabled widespread acceptance of an alternative theory of prosperity, discussed in Chapter 7. Divorced from both equality of condition and equality of opportunity, Ronald Reagan’s tax cuts, military spending, safety-net slashing, and “trickle-down” economics promoted the idea that the freest markets were most efficient, and the most efficient markets produced the most prosperity.

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The philosophers John Rawls’s A Theory of Justice (1971) and Robert Nozick’s Anarchy, State, and Utopia (1974) set out important interpretations of fair property-holding and distribution that have influenced divergent policies to this day. By the late 1970s, prosperity was lagging under the pressure of two oil shocks, unprecedented combined inflation and unemployment, and increasing American deindustrialization. The population shifted, following military bases and factories to southern states where unions were weaker or nonexistent and workers could be paid less. In the Rust Belt, the automobile factories that drove American prosperity furloughed workers.7 In the midst of this malaise, new voices began to blame the economic slowdown on Keynesian economics, taxation, and government economic regulation.

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In the worst formulation, they described the poor as devious “welfare queens.”100 As the next chapter will show, Ronald Reagan, long an opponent of welfare programs, made those associations and claims central tenets of his administration. Under the pressure of neoliberalism, the Great Compression quickly began to unravel. CHAPTER 7 The Triumph of Neoliberalism: 1979–1999 Stagflation and the oil shocks of the 1970s had brought economic malaise to the United States, setting the stage for widespread acceptance of a new, “neoliberal” theory of prosperity, divorced from both equality of condition and equality of opportunity. Over the course of the next decade, Ronald Reagan’s severe tax cuts and George H.

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism by Leigh Phillips, Michal Rozworski

Alan Greenspan, Anthropocene, Berlin Wall, Bernie Sanders, biodiversity loss, call centre, capitalist realism, carbon footprint, carbon tax, central bank independence, Colonization of Mars, combinatorial explosion, company town, complexity theory, computer age, corporate raider, crewed spaceflight, data science, decarbonisation, digital rights, discovery of penicillin, Elon Musk, financial engineering, fulfillment center, G4S, Garrett Hardin, Georg Cantor, germ theory of disease, Gordon Gekko, Great Leap Forward, greed is good, hiring and firing, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, invisible hand, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kanban, Kiva Systems, linear programming, liquidity trap, mass immigration, Mont Pelerin Society, Neal Stephenson, new economy, Norbert Wiener, oil shock, passive investing, Paul Samuelson, post scarcity, profit maximization, profit motive, purchasing power parity, recommendation engine, Ronald Coase, Ronald Reagan, sharing economy, Silicon Valley, Skype, sovereign wealth fund, strikebreaker, supply-chain management, surveillance capitalism, technoutopianism, TED Talk, The Nature of the Firm, The Wealth of Nations by Adam Smith, theory of mind, Tragedy of the Commons, transaction costs, Turing machine, union organizing, warehouse automation, warehouse robotics, We are all Keynesians now

But Fed governors were explicit that they had deliberately applied the brakes to the economy and altered the costs of investment in order to change the climate in which capital bargained with workers. They planned, overriding what the (labor) market, left to its own devices, would otherwise have delivered. Similarly, during the first eight months of the 1973–75 oil-shock recession, interest rates continued to rise—nicely coinciding with UAW bargaining with the Big Three automakers. When the Fed finally lowered rates to stimulate investment and counteract the slump, Fed governors argued that, unlike expansionary fiscal policy carried out by Congress and the president, presumably at the behest of the democratic will, their independent actions would be much easier to undo when the economy “overheated” again and workers started to ask for more.

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Rather than planning only how much healthcare there was, and where—the important questions that the 1960s planners had to tackle first—these reforms could also have laid the groundwork for planning that tackled how healthcare was produced and, most importantly, who participated in decision making. However, instead of ratcheting up democracy within the system, most of the 1970s reforms failed in the face of brewing economic crisis. The oil shock of the early 1970s saw both prices and unemployment spike at the same time—something that economists of all mainstream stripes had said was no longer supposed to happen. The regime of boom and bust was supposed to have been solved by Keynesianism, delivered by the postwar compromise between capital and labor.

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Wasteful investment and unsustainable loans proliferated as underperforming enterprises attempted to improve their position in the market. To service these onerous debts, the reestablished managerial hierarchy, aided by a withered self-management apparatus, did what any normal capitalist manager does: squeeze wages and conditions. Unemployment made its return to the land. And all this before the global economic crises and oil shocks of the 1970s. Does this mean there is no room for market socialism or cooperatives in any conception of a just society? It depends on what time frame we consider. Let us abandon the view of market socialism and democratic planning as rivals. Instead, view cooperatives and market socialism (or elements of it) as bridging mechanisms toward decommodification and planning that build the confidence of ordinary people in their own capacity to govern a workplace without bosses—and ultimately to govern the entirety of the economy.

Oil: Money, Politics, and Power in the 21st Century by Tom Bower

"World Economic Forum" Davos, addicted to oil, Alan Greenspan, An Inconvenient Truth, Ayatollah Khomeini, banking crisis, bonus culture, California energy crisis, corporate governance, credit crunch, energy security, Exxon Valdez, falling living standards, fear of failure, financial engineering, forensic accounting, Global Witness, index fund, interest rate swap, John Deuss, Korean Air Lines Flight 007, kremlinology, land bank, LNG terminal, Long Term Capital Management, margin call, megaproject, Meghnad Desai, Mikhail Gorbachev, millennium bug, MITM: man-in-the-middle, Nelson Mandela, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, Oscar Wyatt, passive investing, peak oil, Piper Alpha, price mechanism, price stability, Ronald Reagan, shareholder value, short selling, Silicon Valley, sovereign wealth fund, transaction costs, transfer pricing, zero-sum game, éminence grise

However, he had set himself apart from other traders by ostensibly operating from Switzerland, in order to evade American taxes. That might have been ignored if he had not planned to profit by exploiting a crisis in Iran, where oil workers were striking to topple the Shah, disrupting supplies. Oil prices in Rotterdam rose by 150 percent, the harbinger of what would be called the second oil shock. Anticipating the shortage, Rich had again purchased oil for storage from corrupt Iranian officials. Among his customers was BP, the former owner of the Iranian oilfields, which was anxious to keep its refineries operating. BP’s reliance on Rich increased after the Shah was ousted from Tehran in January 1979 and replaced by the Islamic fundamentalist Ayatollah Khomeini.

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Unlike other traders, Hall noticed that besides the increasing amounts of oil being imported by the USA and the simplicity of trading tankers of crude oil on the daily Rotterdam spot market, there was an opportunity to speculate about future prices by using schemes devised in the financial markets. The rapid changes in prices made those profits potentially lucrative. The second oil shock had hastened the development of speculation. The impetus for the change was BP’s discovery of oil in the North Sea. Before the discovery of the Forties field in 1970, few experts had believed that any riches would be found under the gray water. The surprise breakthrough fired a stampede, akin to a gold rush.

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Size rather than the environment was again fashionable. Economy cars had been abandoned, and nearly a fifth of American motorists drove gas-guzzling SUVs, the biggest of which ran at four miles a gallon. Although oil imports were predicted by the US Government Accountability Office to rise to 60 percent by 2015, there was no fear of an oil shock. Smart technology that enabled drills to turn corners in rocks miles beneath the surface could be relied upon to produce more oil, and oil’s contribution to industrial production was diminishing. Raymond’s sense of certainty enhanced Exxon’s stature. He and Rex Tillerson were guided by their desire to satisfy their shareholders.

Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

Cutting interest rates often had the added effect of driving down the value of the dollar, making exports more attractive, making imports more expensive, generating demand for domestic goods, and contributing to an eventual recovery. Fiscal stimulus was also used to restore growth. The first ten recessions in the postwar United States largely followed this script. Most lasted less than a year, save for a nasty recession in the wake of the oil shock of 1973, which was triggered by the Yom Kippur War; and after a second oil shock in 1979 caused by the Iranian Islamic Revolution, the Federal Reserve used high interest rates to slay inflation, resulting in a far more unpleasant recession. While brutal, that campaign proved successful and set the stage for the much-celebrated Great Moderation.

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On September 7, Roubini, a professor of economics at New York University, addressed a skeptical audience at the International Monetary Fund in Washington, D.C. He forcefully sounded a warning that struck many in the audience as absurd. The nation’s economy, he predicted, would soon suffer a once-in-a-lifetime housing bust, a brutal oil shock, sharply declining consumer confidence, and inevitably a deep recession. Those disasters were bad enough, but Roubini offered up an even more terrifying scenario. As homeowners defaulted on their mortgages, the entire global financial system would shudder to a halt as trillions of dollars’ worth of mortgage-backed securities started to unravel.

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This move unshackled monetary authorities that, freed of the constraints of a fixed-rate regime, could now print as much money as they wanted. The result was a rise in inflation and commodity prices, even before the 1973 Yom Kippur War led to an oil embargo and a quadrupling of oil prices. Stagflation, a deadly combination of high inflation and recession, followed the two oil shocks of 1973 and 1979 (the latter triggered by the Iranian Revolution) as well as the botched monetary policy response to these shocks. It took a new Federal Reserve chairman, Paul Volcker, to set things right. He sharply raised interest rates to stratospheric levels, triggering a severe double-dip recession in the early 1980s.

The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis by Stephen Leeb, Donna Leeb

Alan Greenspan, book value, Buckminster Fuller, buy and hold, currency risk, diversified portfolio, electricity market, fixed income, government statistician, guns versus butter model, hydrogen economy, income per capita, index fund, low interest rates, mortgage debt, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit motive, reserve currency, rising living standards, Ronald Reagan, shareholder value, Silicon Valley, Vanguard fund, vertical integration, Yom Kippur War, zero-coupon bond

And we tell investors exactly how they best can deal with this challenging new environment so as to come out winners. We hope you find it provocative, informative, and helpful. Introduction At various moments in the past thirty-plus years, oil has thrust itself front and center into our consciousness. The first oil shock came during the Arab oil embargo of 1973, when oil prices rose precipitously and filling up our tanks at the local gas station became a major ordeal. A few years later during the revolution in Iran, and then in 1991 prior to the first Gulf War, prices also soared. During these times, everyone fretted about oil.

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Until oil prices rise sufficiently, we’re going to keep putting off facing reality. And that could be exceedingly dangerous. One reason for a sense of urgency about zeroing in on alternative energies as rapidly as possible, rather than dragging out the process by efforts at conservation, is that we can never know when we will experience a sudden oil shock that will abruptly choke off supplies. Unlike thirty years ago, when worldwide oil supplies were more abundant, we’re too close to the edge now to be sure we can survive such a blow. And with the world as fragile as it is, with most oil concentrated in politically hostile or unstable countries, it obviously would be naive to say that such a shock won’t happen.

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Whatever your view of the primary motives behind our unprecedented initiation of the war in Iraq, this reality—the importance of securing world oil supplies—surely wasn’t entirely absent from the minds of our leaders. In later chapters we talk about how our vulnerability to oil shortages makes it essential that we continue to build up our military might. But trying to police the oil-producing world through our soldiers and weapons will never be a hundred percent foolproof—oil shocks can still occur—and efforts to do so obviously are fraught with a great many risks and problems. The only long-term answer is to develop acceptable and viable alternative forms of energy, and the sooner we do it, the better. So yes, it does seem disgraceful that the average mileage achieved by cars has been dropping significantly, one of the statistics frequently pointed out by pro-conservationists.

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

Alan Greenspan, assortative mating, call centre, clean water, commoditize, company town, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, insecure affluence, It's morning again in America, Jane Jacobs, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low interest rates, low skilled workers, manufacturing employment, mass immigration, McMansion, Michael Shellenberger, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Paradox of Choice, Ponzi scheme, positional goods, post-industrial society, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, Ted Nordhaus, The Death and Life of Great American Cities, The Great Moderation, the long tail, the strength of weak ties, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, women in the workforce, Yom Kippur War

If it weren’t for death by a thousand imports, the Treaty of Detroit would have rotted from within, since—devoid of real competition—the system would have devolved into a Sovietlike goldbricking system of low-productivity work. Wages and prices would feed into the vicious circle of inflation, or rather stagflation (which, in fact, sparked by the oil shock of 1973, did befall us). Those generous provisions for health care and retirement have meant that American car companies (and other manufacturers) had little fat they could trim. Rather than give up defined benefit (i.e., guaranteed) pensions and health insurance for retirees, autoworkers clung to their hard-won gains—in part because union leaders are almost always closer to retirement than the rank-and-file workers they are meant to represent.

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The auto industry, if anything, has been spared the worst of it since there is somehow symbolic importance to “buying American” (whatever that means) to many U.S. citizens, especially veterans and politicians. The point is: Don’t blame the Asians; our midcentury system of wage growth and relative equality was going to collapse one way or another. The oil shock of 1973—when the members of OPEC took the position that they would no longer ship oil to nations that supported Israel in the Yom Kippur War, curtailing production and thereby raising prices—makes as good a marker as any for the beginning of the end. Urban manufacturing declined just as our borders were opening up.

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Stagnant wage growth has been a mantra of Democratic politicians and labor activists for the past two decades. Yes, it is true that if you track median wages and plot them against price rises based on the official inflation rate—the consumer price index (CPI)— then it does look like real wages have stagnated for the bottom half for most of the period since the oil shock of 1973.10 However, as my graduate school economics professor pithily stated: “Inflation is a great measure in the short run; but it’s a lousy measure over longer periods.” That’s the case mainly because of the way it’s calculated. Basically, the U.S. Bureau of Labor Statistics takes a common “basket of goods” and tracks the changes in prices of those goods from one time period to the next.

Break Through: Why We Can't Leave Saving the Planet to Environmentalists by Michael Shellenberger, Ted Nordhaus

"World Economic Forum" Davos, Abraham Maslow, affirmative action, An Inconvenient Truth, anti-communist, Berlin Wall, bread and circuses, carbon credits, carbon tax, clean water, conceptual framework, David Brooks, deindustrialization, Easter island, facts on the ground, falling living standards, Francis Fukuyama: the end of history, full employment, Great Leap Forward, Herbert Marcuse, illegal immigration, Indoor air pollution, insecure affluence, Intergovernmental Panel on Climate Change (IPCC), invisible hand, knowledge economy, land reform, loss aversion, market fundamentalism, McMansion, means of production, meta-analysis, Michael Shellenberger, microcredit, new economy, oil shock, postindustrial economy, Ralph Waldo Emerson, Richard Florida, science of happiness, seminal paper, Silicon Valley, Stewart Brand, Ted Nordhaus, the strength of weak ties, Thomas Kuhn: the structure of scientific revolutions, trade liberalization, War on Poverty, We are as Gods, winner-take-all economy, World Values Survey, zero-sum game

In response to the widely publicized failures of colonization, Brazil’s military rulers shifted their emphasis to massive infrastructure development—roads, dams, and industrial agriculture—financed with loans from private lenders, the World Bank, and the Inter-American Development Bank. After the first OPEC oil shock, in 1973, the military took the nation’s debt to a new level when the dictatorship borrowed billions from foreign lenders at low but also variable interest rates in order to cover the abrupt increase in fuel costs. The generals’ borrowing accelerated after the second oil shock, in 1979, when oil accounted for 43 percent of Brazil’s imports.17 The moment of reckoning arrived in 1981, when the U.S. Federal Reserve raised the prime rate.

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Despite the divisions of the Vietnam War, most Americans had within their lifetimes witnessed the striking economic and social transformations of the nation from Depression-era scarcity to postwar abundance. It is no accident that the great accomplishments of modern environmentalism, along with the great accomplishments of postwar liberalism, occurred at the moment of twentieth-century America’s greatest prosperity, nor is it a surprise that they occurred in the shadow of the oil shocks of the mid- and late 1970s that brought the egalitarian economic expansion of the postwar era to an end and the U.S. economy to its knees. Those economic shock waves, along with the global economic forces that transformed the American economy in the 1980s and 1990s and the rising conservative tide that dismantled much of the social safety net that the New Deal and the Great Society had built, brought about a new era of economic organization.

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Over the past twenty years, as automobile technologies have improved exponentially, overall fuel-economy rates have gone down, not up. The Corporate Average Fuel Economy legislation, or CAFE, was crafted in 1975 more as a way to save the American auto industry, not the environment. With fuel prices rising dramatically after the oil shocks of the early 1970s, and U.S. automakers ill prepared to offer the fuel-efficient vehicles that the public was suddenly demanding, U.S. automakers, the UAW, and environmentalists alike agreed that a modest fuel-efficiency requirement made good sense and would help Detroit more effectively compete with foreign competitors, would reduce dependence on foreign oil, and would reduce air pollution.

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

They could build sprawling houses or locate them in climate-challenged places because fuel was abundant. California was America’s prime example of what happens when you build a civilization on the basis of cheap fuel: people choose space over proximity and retailers quickly adjust to a less dense civilization by offering giant shopping malls and drive-throughs. Occasional oil shocks such as the one in the 1970s represented a fundamental threat to America’s way of life and promoted lots of talk about kicking the oil habit. As soon as the oil price declined, Americans returned to their earlier habits. The 1880s saw the introduction of two revolutionary new technologies, electric power and the internal combustion engine.

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Nixon had no choice but to close the so-called gold window, stabilizing America’s gold holdings at about 275 million ounces, where they remained until 1979, but his decision nevertheless jolted the global economy. In the more than forty years since then the country’s gold holdings have barely budged and currently number 265.5 million ounces (see chart). U.S. OFFICIAL GOLD RESERVES 1957 – 1980 On top of the gold shock came an oil shock. America had dominated the world oil industry from the birth of the oil era in the 1870s. Every time it looked as if the country was running out of oil, new fields came on line: just as the Pennsylvania fields ran dry in the early 1900s, Americans discovered vast new supplies of oil in Texas and California.

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The price of U.S. crude oil rose over ninefold between 1972 and 1981, sending shock waves through corporate America, starting with big energy consumers such as domestic transportation, oil refining, chemicals, steel, aluminum, and international shipping, but including the whole of the corporate world. Above all, the oil shock entrenched America’s biggest economic problem. Stagflation was a toxic combination of rising inflation and unemployment that Keynesian economists, citing the Phillips curve, which postulated a fixed trade-off between inflation and unemployment, said could never happen. In the fourteen-year stretch between 1969 and 1982, the annual rate of inflation only fell below 5 percent twice, and for four of those years it was in double digits, hitting 14.8 percent in March 1980.

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank by John Tamny

Airbnb, Alan Greenspan, Apollo 13, bank run, Bear Stearns, Bernie Madoff, bitcoin, Bretton Woods, business logic, buy and hold, Carl Icahn, Carmen Reinhart, corporate raider, correlation does not imply causation, cotton gin, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, Fairchild Semiconductor, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, Larry Ellison, liquidity trap, low interest rates, Mark Zuckerberg, market bubble, Michael Milken, Money creation, money market fund, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, Phillips curve, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Travis Kalanick, Uber for X, War on Poverty, yield curve

For now, what the falling price of oil indicates is the irrelevance of the Organization of the Petroleum Exporting Countries (OPEC) to the price of oil. Lest we forget, OPEC formed in the 1960s but had no impact on the per barrel price. Furthermore, the oil “shocks” of the early and late 1970s similarly had nothing to do with OPEC. As Robert Bartley, the late editorial-page editor of the Wall Street Journal, explained in his spectacular 1992 book about the Reagan revival, The Seven Fat Years (in which he put “oil shocks” in mocking quotes): “The real shock was that the dollar was depreciating against oil, against gold, against foreign currencies and against nearly everything else.”13 Bartley pointed out, “In the confusion of the 1970s, no one noticed that OPEC officials told us plainly what was going to happen after the closing of the gold window.”

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In truth, U.S. presidents, once again, get the dollar they want. Reagan and Bill Clinton were strong-dollar presidents as the low prices of gold and oil revealed in living color. George W. Bush got the weak dollar he wanted, as evidenced by the spike in the prices of gold and oil since 2001. We didn’t suffer “oil shocks” in the 2000s; we suffered the weak-dollar policies of President Bush, and during his first term, of President Barack Obama. In a replay of modern history, Bartley added, “When the price of oil shot up, the most fashionable sectors of American opinion persuaded themselves the world was running out of energy.”

Money Mischief: Episodes in Monetary History by Milton Friedman

Bretton Woods, British Empire, business cycle, classic study, currency peg, double entry bookkeeping, fiat currency, financial innovation, fixed income, floating exchange rates, foreign exchange controls, full employment, German hyperinflation, income per capita, law of one price, Money creation, money market fund, oil shock, price anchoring, price stability, Savings and loan crisis, systematic bias, Tax Reform Act of 1986, transaction costs

It did not produce any longer-lasting effect on the rate of inflation. In the five years after the 1973 oil shock, inflation in both Germany and Japan declined, in Germany from about 7 percent a year to less than 5 percent, in Japan from over 30 percent to less than 5 percent. In the United States, inflation peaked a year after the oil shock at about 12 percent, declined to 5 percent in 1976, and then rose to over 13 percent in 1979. How can these very different experiences be explained by an oil shock that was common to all countries? Germany and Japan are 100 percent dependent on imported oil, yet they did better at cutting inflation than did either the United States, which is only 50 percent dependent on imported oil, or the United Kingdom, which has become a major producer of oil.

The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape by James Howard Kunstler

A Pattern Language, blue-collar work, California gold rush, car-free, City Beautiful movement, corporate governance, Donald Trump, financial independence, fixed income, Ford Model T, Ford paid five dollars a day, Frank Gehry, gentrification, germ theory of disease, indoor plumbing, It's morning again in America, jitney, junk bonds, land tenure, Lewis Mumford, mass immigration, means of production, megastructure, Menlo Park, new economy, oil shock, Peter Calthorpe, place-making, plutocrats, postindustrial economy, Potemkin village, Ronald Reagan, Savings and loan crisis, Skinner box, Southern State Parkway, urban planning, urban renewal, urban sprawl, Whole Earth Review, working poor, Works Progress Administration, yellow journalism

As expected, the new expressways promoted an ever-farther-flung subur­ ban expansion. A new merchandising gimmick called the shopping mall began to sprout up around the highway interchanges, offering a syn­ thetic privatized substitute for every Main Street in America. A golden age of ever-greater profit seemed to beckon . . . but then the first of the oil shocks struck: the so-called Arab Oil Embargo. Whether any actual oil shortage existed during those autumn weeks of 1973 is arguable, but the distribution and pricing apparatus certainly went amok at the threat of one. Since World War II, America's oil use had shot up so steeply that by the seventies many old American oil J O Y R I D E fields were pumped dry, and nearly half of our petroleum was coming from overseas.

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Lines formed at pumps every­ where, people panicked, fistfights broke out, work schedules were disrupted, vacations were canceled, and nobody knew if the country would be able to carry on as before. A longer-term result was the rising cost of practically everything, otherwise known as inflation, since the . e of all commodi . _ods wer�_�Ilke�-,_ th��g� _manufact� ri!1..8 or distri utron, to the price�e oil shock also temporarily dis­ -;;ur;gea more mlgraffoi-it'o the new outer limits of the urban fringe. For instance, the trip from Mira Lorna to downtown Los Angeles might take only fifty minutes, but who was crazy enough to move that far when an Arab cartel could shut the oil spigot any time they pleased ?

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This means that in the lifetimes of most Ameri­ cans living today, the essential fuel that has powered the suburban1 1 1 ... T HE GE O G R A P H Y O F N O W HE RE , consumer way of life will no longer be available. Ii will not be necessary to run out of petroleum in order to fatally disrupt a petroleum­ dependent economy. As the 1970s oil shocks demonstrated, all that it takes to mess things up is some instability of supply and price, and surely we will reach that stage before the wells run dry. Despite a lot of wishful thinking, and a near-religious belief in the "magic of technol­ ogy," there is no alternative in sight to the internal combustion engine that the masses of Illotorists cO!

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips

"World Economic Forum" Davos, Alan Greenspan, algorithmic trading, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, collateralized debt obligation, computer age, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial engineering, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, Glass-Steagall Act, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Rogoff, large denomination, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Menlo Park, Michael Milken, military-industrial complex, Minsky moment, mobile money, money market fund, Monroe Doctrine, moral hazard, mortgage debt, Myron Scholes, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, shareholder value, short selling, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Chicago School, Thomas Malthus, too big to fail, trade route

Indexes cobbled together by Dun’s Review around the ten leading conglomerates and parallel tensomes for technology and computers tumbled between 77 percent and 86 percent. 3 Those excesses, by and large, were purged. The seventies were a confused era, marked by two major oil-price shocks (1973-74 and 1979-80) that bred a pair of serious stagflationary recessions in more or less the oil-shock time frames. However, mortgage debt expanded like gangbusters as housing prices soared between 1976 and 1979, letting owners refinance and tap spendable funds. Alan Greenspan, who was chairman of President Gerald Ford’s Council of Economic Advisers, would keep those supportive precedents in mind almost thirty years later as Fed chairman.

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Besides droughts that may be linked to climate change, experts cite new demand for foodstuffs from India, China, and the rest of Asia, as well as from the biofuels industry’s pursuit of corn for ethanol. One senior government minister in Australia raised the possibility of a global “food shock” to match the already obvious “oil shock.”14 The Russian government imposed retail price controls on some basic foodstuffs, Germany buzzed with newspaper headlines about milk and vegetable prices, and the director-general of the United Nations Food and Agricultural Organization noted in late 2007 that food prices in developing countries were up about 11 percent in the past year, spurring concern about food riots.15 In the United States, food represents 14 percent of the consumer price index, but the ratio is much higher in China (33 percent) and India (46 percent).

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Petersburg Bourse Selected as Trading Floor for Oil Prices,” RIA Novosti, November 14, 2007. 66 “Mansoor Mohi-uddin, “View of the Day: US Dollar,” Financial Times, September 11, 2007. 67 Phillips, American Theocracy, p. 87. 68 Ibid. 69 Ibid., p. 95. 70 Ibid. 71 Ibid., p. 96. 72 Ibid., p. 95. 73 Matthew Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (New York: Wiley, 2005). 74 Michael T. Klare, “Beyond the Age of Petroleum,” Nation, November 12, 2007. 6. THE POLITICS OF EVASION: DEBT, FINANCE, AND OIL 1 Mancur Olson, The Rise and Decline of Nations (New Haven, Conn.: Yale University Press, 1984). 2 Mother Jones, September-October 2002, p. 64. 3 Grover Norquist, “A Dynastic Disease in American Politics,” Financial Times, November 20, 2007. 4 Carl Bernstein, A Woman in Charge: The Life of Hillary Rodham Clinton (New York: Knopf, 2006); Jeff Gerth and Don Van Natta Jr., Her Way: The Hopes and Ambitions of Hillary Rodham Clinton (New York: Little Brown, 2006). 5 Cullen Murphy, Are We Rome?

The Long Boom: A Vision for the Coming Age of Prosperity by Peter Schwartz, Peter Leyden, Joel Hyatt

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, American ideology, Asian financial crisis, Berlin Wall, business cycle, centre right, classic study, clean water, complexity theory, computer age, crony capitalism, cross-subsidies, Danny Hillis, dark matter, dematerialisation, Deng Xiaoping, Dissolution of the Soviet Union, double helix, edge city, Electric Kool-Aid Acid Test, European colonialism, Fall of the Berlin Wall, financial innovation, George Gilder, glass ceiling, global village, Gregor Mendel, Herman Kahn, hydrogen economy, industrial cluster, informal economy, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, It's morning again in America, junk bonds, Just-in-time delivery, Kevin Kelly, knowledge economy, knowledge worker, life extension, market bubble, mass immigration, megacity, Mikhail Gorbachev, Neal Stephenson, Nelson Mandela, new economy, oil shock, open borders, out of africa, Productivity paradox, QR code, Richard Feynman, Ronald Reagan, Search for Extraterrestrial Intelligence, shareholder value, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, The Hackers Conference, the scientific method, Thomas L Friedman, upwardly mobile, Washington Consensus, We are as Gods, Whole Earth Catalog, women in the workforce, Y2K, zero-sum game

The boom also saw the emergence of a generation—the Baby Boom generation—that reaped all the benefits of this prosperity. But just about the time that the first Baby Boomers finished their formal education and began to enter the economy, the boom began to falter. The oil price shock of 1973 started the stumble, pushing the economy into stagnation coupled with inflation, so-called stagflation. The second major oil shock, in 1979, which brought another quadrupling of prices, dashed any hope that the boom could pick up again. For the rest of the twentieth century, the post-World War II boom was the standard that we always wanted to attain. If only we could achieve the level of growth enjoyed in that era. If only prosperity could spread as quickly.

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But that economic boom didn't stop in the United States, and it didn't stop in the 1950s. That same boom spread throughout the Free World in the 1960s. Europe got back on its feet after the war, and Japan also rebuilt. All these economies were booming throughout the 1960s—causing huge repercussions in their social and political arenas as well. This high growth continued until the oil shocks of 1973, when the quadrupling in price of oil, the lifeblood of the Industrial Age economy, helped choke off the growth and push the economies of the developed world into the stagflation of the 1970s. Still, the economic expansion had had a good twenty-five-year run. Those same two megatrends are driving through our Long Boom era today.

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We need to begin to figure out better ways to broker difficult political deals in a global context, as we did in the treaty that stopped the production of ehlorofluorocarbons, which had been destroying the ozone layer. In Long Boom terms, the environmental crisis is a catalyst that will increase global interdependence over time. In another 30 years, we'll laugh about how fractured we feel now. The STORY of Oil The last great global economic boom, the post-World War II boom, ended in the oil shock of 1973. Oil, that lifeblood of the industrial economy, shot up in price by a factor of 4, going from Just $3 a barrel to $13 in the dollars of the day. That hike was bad enough, but then came the shock of 1979, which nearly quadrupled the price again, from $13 to $45. Almost all forecasts at that time told the world to brace for another big price hike in the late 1980s, to $100 a barrel.

The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith

Boeing 747, Bretton Woods, BRICs, business cycle, clean water, climate change refugee, Climategate, colonial rule, data science, deglobalization, demographic transition, Deng Xiaoping, Easter island, electricity market, energy security, flex fuel, G4S, global supply chain, Google Earth, Great Leap Forward, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, land tenure, Martin Wolf, Medieval Warm Period, megacity, megaproject, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, standardized shipping container, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K

Disturbing twenty-first-century scenarios of intense competition for oil—even to the point of economic collapse and violent warfare—are described in the books Out of Gas by David Goodstein, Resource Wars and Rising Powers, Shrinking Planet: The New Geopolitics of Energy by Michael Klare, and Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy by Matt Simmons.111 These authors are neither hacks nor alarmists. Simmons is a lifelong Republican and oil industry insider, and is widely respected as one of the smartest data analysts in the business. Goodstein is a Caltech physicist, and Klare has long experience in military policy.

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Andrews, “Mineral Resources, Economic Growth, and World Population,” Science 185 (1974): 13-10. 100 For more on this discussion of mineral exhaustion and the perils of a fixed-stock approach to resource assessment, see John E. Tilton, On Borrowed Time? Assessing the Threat of Mineral Depletion (Washington, D.C.: RFF Press, 2002), 160 pp. 101 Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, N.J.: John Wiley & Sons, 2005), 428 pp. 102 A very detailed analysis comes from the National Institute for Materials Science in Tsukuba, Japan. The authors use the Goldman Sachs BRICs and G6 economic projections discussed in Chapter 2 to project future demand for twenty-two metals.

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Norton & Company, 2005), 148 pp.; M. Klare, Resource Wars: The New Landscape of Global Conflict (New York: Holt Paperbacks, 2002), 304 pp.; and Rising Powers, Shrinking Planet: The New Geopolitics of Energy, reprint ed. (New York: Holt Paperbacks, 2009), 352 pp.; M. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Somerset, N.J.: John Wiley & Sons, 2005), 428 pp. 112 On average, postpeak oil field decline rates are 3.4% for supergiant fields, 6.5% for giant fields, and 10.4% for large fields, World Energy Outlook 2008, OECD/IEA (2008), 578 pp. 113 A successful Al Qaeda attack on the Abqaia facilities would have shocked world oil markets, as it handles two-thirds of the Saudi Arabian oil supply.

Gusher of Lies: The Dangerous Delusions of Energy Independence by Robert Bryce

addicted to oil, An Inconvenient Truth, Berlin Wall, carbon tax, Charles Lindbergh, Colonization of Mars, congestion pricing, decarbonisation, en.wikipedia.org, energy security, energy transition, financial independence, flex fuel, Ford Model T, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), it's over 9,000, Jevons paradox, John Markoff, Just-in-time delivery, low earth orbit, low interest rates, Michael Shellenberger, Nelson Mandela, new economy, oil shale / tar sands, oil shock, oil-for-food scandal, peak oil, price stability, Project for a New American Century, rolodex, Ronald Reagan, Silicon Valley, SpaceShipOne, Stewart Brand, Suez crisis 1956, Thomas L Friedman, Whole Earth Catalog, X Prize, Yom Kippur War

Mills, writer of the Forbes column “Energy Intelligence,” and co-author of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy “In Gusher of Lies Robert Bryce does political leaders around the world an enormous favor by debunking in its entirety the myth that anymajor energy-consuming countrywith flat or declining energysupplies can ever achieve the utopia called ‘energy independence.’ He also lucidly spells outexactly whyAmerica is the least likely country even to come close.” —Matthew Simmons, chairman of the Houston-based investment banking firm Simmons & Company International, and author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy “He blasts Republicans, Democrats, the presidential candidates, Al Gore, Robert Redford, environmentalists, and energy analysts for misleading the public about our energy needs. . . . Meticulously researched with copious facts—nearly all footnoted—this illuminating and sometimes witty work offers another view of the current state of energy.”

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After more than 300 pages of a mostly clear-eyed survey of the global energy business, he concludes that every year that goes by is “another year in which our unstable energy economy moves so much closer to the point of no return.”56 While there is much to recommend in Roberts’s book, he fails to provide readers with an understanding of the rapid globalization of the energy business. Instead, he sticks with a U.S.-centric approach, and in doing so, he implies that America holds the keys to the global energy future. That’s no longer true. Another notable book that raised anxiety about future oil production was Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, written by Matthew Simmons, the founder and chairman of the Houston-based investment banking firm Simmons & Co. International. Published in 2005, the book gained particular attention because Simmons is a Republican and was an adviser to George W. Bush on energy issues. Simmons’s book claims that Saudi Arabia has been obscuring the problems in its oil fields and that the kingdom will not be able to significantly boost its oil output.

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Roberts, Paul. The End of Oil: On the Edge of a Perilous New World. New York: Houghton Mifflin, 2004. Sifry, Micah L., and Christopher Cerf. The Iraq War Reader: History, Documents, Opinions. New York: Touchstone, 2003. Bibliography 375 Simmons, Matthew. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, N.J.: John Wiley & Sons, 2005. Smil, Vaclav. Energy at the Crossroads: Global Perspectives and Uncertainties. Cambridge: MIT Press, 2003. Stagliano, Vito A. A Policy of Discontent: The Making of a National Energy Strategy. Tulsa, Okla.: PennWell, 2001. Woodward, Bob.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It? by Brett Christophers

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Amazon Web Services, barriers to entry, Big bang: deregulation of the City of London, Big Tech, book value, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business process, business process outsourcing, Buy land – they’re not making it any more, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cloud computing, collective bargaining, congestion charging, corporate governance, data is not the new oil, David Graeber, DeepMind, deindustrialization, Diane Coyle, digital capitalism, disintermediation, diversification, diversified portfolio, Donald Trump, Downton Abbey, electricity market, Etonian, European colonialism, financial deregulation, financial innovation, financial intermediation, G4S, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, greed is good, green new deal, haute couture, high net worth, housing crisis, income inequality, independent contractor, intangible asset, Internet of things, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kickstarter, land bank, land reform, land value tax, light touch regulation, low interest rates, Lyft, manufacturing employment, market clearing, Martin Wolf, means of production, moral hazard, mortgage debt, Network effects, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, patent troll, pattern recognition, peak oil, Piper Alpha, post-Fordism, post-war consensus, precariat, price discrimination, price mechanism, profit maximization, proprietary trading, quantitative easing, race to the bottom, remunicipalization, rent control, rent gap, rent-seeking, ride hailing / ride sharing, Right to Buy, risk free rate, Ronald Coase, Rutger Bregman, sharing economy, short selling, Silicon Valley, software patent, subscription business, surveillance capitalism, TaskRabbit, tech bro, The Nature of the Firm, transaction costs, Uber for X, uber lyft, vertical integration, very high income, wage slave, We are all Keynesians now, wealth creators, winner-take-all economy, working-age population, yield curve, you are the product

Mommer, ‘Fiscal Regimes and Oil Revenues in the UK, Alaska and Venezuela’, June 2001, p. 8 – pdf available at oxfordenergy.org. 41. Shaxson, Poisoned Wells, p. 2. 42. J. Boué, ‘The 1973 Oil Shock and the Institutional and Fiscal Framework for Petroleum Exploration and Production Activities in the UK North Sea’, in A. Beltran, É. Bussière and G. Garavini, eds, L’Europe et la question énergétique: Les années 1960/1980 (Brussels: P.I.E. Peter Lang, 2016), pp. 235–53, at p. 242. 43. Nakhle, ‘Petroleum Fiscal Regimes’, p. 96. 44. Boué, ‘1973 Oil Shock’, p. 244. 45. P. Wright and J. Boué, ‘The United Kingdom: Public Debate and Management of Petroleum Resources’, in I.

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Meanwhile, periodically constituted ‘expert groups’ are also ‘made up entirely of oil companies and their associations and tax advisers’.50 The UK’s denuded fiscal regime for oil and gas can also be explained in terms of the historic geopolitical context. In the 1970s and 1980s, the government was in a singular hurry for the North Sea’s oil and gas to be extracted as quickly as possible, largely because of a desire to undercut Opec, whose influence over global energy supplies and prices had been substantially heightened by the 1973 oil shock.51 One way to expedite rapid extraction was through stimulatory tax policy – and, as Mommer would later write, there is ‘no doubt that the lower level of taxation had a positive impact on production’.52 Last but not least, the performative dimension of reserve estimation (see above) has also played a significant role.

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Boué, ‘The United Kingdom: Public Debate and Management of Petroleum Resources’, in I. Overland, ed., Public Brain Power: Civil Society and Natural Resource Management (Basingstoke: Palgrave Macmillan, 2017), pp. 329–46, at p. 335. 46. Boué, ‘1973 Oil Shock’, pp. 244, 246. 47. Energy Charter Secretariat, ‘Taxation Along the Oil and Gas Supply Chain: International Pricing Mechanisms for Oil and Gas’, 2008, p. 67 – pdf available at energycharter.org. 48. Mommer, ‘Fiscal Regimes and Oil Revenues’, p. 26. 49. Wright and Boué, ‘United Kingdom’, p. 336. 50. G. Muttitt, A. Markova and M. Crighton, ‘Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction’, May 2019, p. 35 – pdf available at priceofoil.org. 51.

There Is Nothing for You Here: Finding Opportunity in the Twenty-First Century by Fiona Hill

2021 United States Capitol attack, active measures, Affordable Care Act / Obamacare, algorithmic bias, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, Boris Johnson, Brexit referendum, British Empire, business climate, call centre, collective bargaining, company town, coronavirus, COVID-19, crony capitalism, cuban missile crisis, David Brooks, deindustrialization, desegregation, digital divide, disinformation, Dissolution of the Soviet Union, Donald Trump, Fall of the Berlin Wall, financial independence, first-past-the-post, food desert, gender pay gap, gentrification, George Floyd, glass ceiling, global pandemic, Great Leap Forward, housing crisis, illegal immigration, imposter syndrome, income inequality, indoor plumbing, industrial cluster, industrial research laboratory, informal economy, Jeff Bezos, Jeremy Corbyn, Kickstarter, knowledge economy, lockdown, low skilled workers, Lyft, Martin Wolf, mass immigration, meme stock, Mikhail Gorbachev, new economy, oil shock, opioid epidemic / opioid crisis, Own Your Own Home, Paris climate accords, pension reform, QAnon, ransomware, restrictive zoning, ride hailing / ride sharing, Right to Buy, Ronald Reagan, self-driving car, Silicon Valley, single-payer health, statistical model, Steve Bannon, The Chicago School, TikTok, transatlantic slave trade, Uber and Lyft, uber lyft, University of East Anglia, urban decay, urban planning, Washington Consensus, WikiLeaks, Winter of Discontent, women in the workforce, working poor, Yom Kippur War, young professional

Structurally, the United Kingdom and the United States—like Russia and other advanced economies—cycled through a rapid buildup of extractive industry and mass manufacturing in the 1920s and 1930s and again at the end of the Second World War. Our nations began the descent into what became known as the postindustrial era in the 1960s, and especially after the 1970s, when they were hit by successive oil shocks. Major oil producers in the Middle East, members of the Organization of Petroleum Exporting Countries (OPEC), imposed an embargo on countries such as the UK and the U.S. for supporting Israel in its Yom Kippur War with Arab states. Both the United Kingdom and the United States had their own sources of oil and gas, but they remained dependent on Middle East imports.

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The embargo forced a period of harsh adjustment to sudden energy scarcity and soaring prices, including gasoline rationing and utility cuts to curb demand. It also led to a substantial restructuring of the automotive industry to favor smaller, more fuel-efficient cars. The United Kingdom and its huge coal, steel, shipbuilding, and manufacturing industries were especially hard pressed by the oil shocks and related developments. The 1970s saw stagnant growth and soaring inflation. Alongside the oil embargo, the global economy began to change rapidly, with technological breakthroughs that enabled the automation of manufacturing and put more emphasis on the movement of capital and finance than on raw materials and goods.

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Stuck in the USSR For me, born in 1965, and from my vantage point of experiencing life in the North East of England, then the Soviet Union, and then the United States, the big three military and industrial powers of World War II were facing similar postindustrial challenges, albeit on slightly different timescales. Historically, the USSR’s trajectory of industrial development was similar to those of the United Kingdom and the United States in the twentieth century, with periods of booms and busts before and after the Second World War. The USSR had been mostly on the sidelines during the oil shocks of the 1970s, as it developed its own oil and gas reserves for domestic consumption, but it could not escape the effects of the technological changes that pushed other economies toward modernization and away from heavy industry. The Soviet Union was the bastion of workers in coal mines and smokestack industries and massive factories.

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Japan too had a radical group known as the Red Army. The 1969 film Easy Rider provided the coda for the period, symbolizing the confused dissent of a generation. Wyatt (played by Peter Fonda, Jane's brother) admits in the film's climax that they had failed, blown it. The seventies was the decade of oil shocks, which occurred in 1973 and 1979 and ended a period of low prices. In the US this was compounded by oil production peaking. In October 1973, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) proclaimed an oil embargo, in response to US backing for Israel during the Yom Kippur War and in support of the Palestinians.

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Commencing in the 1980s, there was unprecedented expansion in cross-border trade and flow of capital. The large US deficits resulting from the Vietnam War and Great Society programs had created significant overseas holdings of US dollars. The need to lend these out led to a nascent international money market centered in London—the euro market. The oil shocks had created petrodollars, US dollars paid to oil-exporting countries. Saudi Arabia, Kuwait, and others amassed large surpluses of petrodollars, which they could not immediately use because of their small populations and lack of industrialization. The surpluses were deposited in the euro market and lent out, mainly to less developed countries.

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In the late 1960s, GM's profitability declined. With car ownership having reached very high levels, the market was saturated. In 1965, Ralph Nader's bestselling Unsafe at Any Speed drew unwelcome attention to the auto industry's safety issues, mechanical defects, and quality problems, placing additional pressure on earnings. Then came the oil shocks of the 1970s and an increased demand for compact, fuel-efficient vehicles, which US car makers had shunned in favor of ever larger, more powerful dream machines. Foreign carmakers captured market share. The quality and features of Japanese cars, once the object of jokes, improved. Sophisticated buyers came to prefer European luxury marquee brands, such as Mercedes-Benz, BMW, Porsche, and Ferrari.

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

air traffic controllers' union, Alan Greenspan, assortative mating, autonomous vehicles, Bear Stearns, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, carbon tax, collective bargaining, compensation consultant, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Ford Model T, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, independent contractor, industrial robot, invisible hand, It's morning again in America, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, proprietary trading, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, subprime mortgage crisis, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Economic trends are hard to interpret in real time because doing so requires data, and the best and most complete data sets often aren’t available for five or ten years. By the time they are available, the world has moved on to fretting about newer trends. As a result, when the day arrives for us to understand better, say, the oil shocks of 1973, or the recession of 1982–83, we are preoccupied with trying to figure out the tech boom of the late 1990s or the housing bubble of the aughts. By “we,” I mean all of American society but especially my own fraternity of political and policy-wonk journalists. History isn’t news. But the Great Divergence has been going on for so long that it manages to be both.

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The Trinity University economist Barry Hirsch calculated in a 2007 paper that if the only change between 1983 and 2002 had been the shift in where the jobs were, private-sector union density would have fallen by less than two percentage points. Instead, it fell by eight.12 Many of the calamitous economic conditions of the 1970s were not unique to the United States. The oil shocks affected all industrialized nations, similar productivity declines were observed elsewhere, and the very nature of global competition is that it’s, well, global. But in other industrialized nations, the effects were quite different. Union density actually increased in most industrialized countries during the 1970s even as it was decreasing in the United States.

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The latter was caused partly by rising food consumption in more prosperous economies abroad and partly by a deliberate policy by the Nixon administration to reduce domestic agricultural production (and thereby increase food prices) to court the farm vote in 1972. 9. Frank Levy, interview with author, Apr. 22, 2011. 10. The disruptive oil shocks of the 1970s—in 1973 and 1974 alone oil prices quadrupled—likely played a significant role. 11. William J. Baumol and Alan S. Blinder, Macroeconomics: Principles and Policy (Mason, OH: South-Western College Publishing, 2010), 145; Paul Krugman and Robin Wells, Macroeconomics (New York: Worth, 2009), 233; Susan Fleck, John Glaser, and Shawn Sprague, “The Compensation-Productivity Gap: A Visual Essay,” Monthly Labor Review, Jan. 2011, 57–69. 12.

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

They are mainly a result, in other words, of political decisions that can be counteracted. THE ROLE OF ENERGY At this point anyone reading a book with a title such as mine may well feel justified in asking what role the present ecological crisis, and energy in particular, plays in the increase of inequalities since 1980—and all the more when one considers that the oil shocks of the 1970s were accompanied by a historic rebound of inequalities and accumulated wealth in the industrialized countries. Let us begin by noting that inequality levels throughout the world and within certain regions are closely linked to the distribution of natural resources (particularly oil) and to property rights to these resources.

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The remaining half is trickier to analyze statistically. It may be due to social norms and a mental outlook peculiar to the generation born after the war; at all events, baby boomers exhibit less virtuous behaviors than their parents, who had endured wartime rationing, among other hardships, and their children, who were born after the oil shocks of the 1970s. In France, as in the United States, younger people today say that they care more about the fate of the environment than their parents do. And yet, as we have seen, the lower emissions levels observed for this generation in France are partly a consequence of economic constraints, not solely of a widespread fear of ecological crisis.

Beyond Diversification: What Every Investor Needs to Know About Asset Allocation by Sebastien Page

Andrei Shleifer, asset allocation, backtesting, Bernie Madoff, bitcoin, Black Swan, Bob Litterman, book value, business cycle, buy and hold, Cal Newport, capital asset pricing model, commodity super cycle, coronavirus, corporate governance, COVID-19, cryptocurrency, currency risk, discounted cash flows, diversification, diversified portfolio, en.wikipedia.org, equity risk premium, Eugene Fama: efficient market hypothesis, fixed income, future of work, Future Shock, G4S, global macro, implied volatility, index fund, information asymmetry, iterative process, loss aversion, low interest rates, market friction, mental accounting, merger arbitrage, oil shock, passive investing, prediction markets, publication bias, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Feynman, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, robo advisor, seminal paper, shareholder value, Sharpe ratio, sovereign wealth fund, stochastic process, stochastic volatility, stocks for the long run, systematic bias, systematic trading, tail risk, transaction costs, TSMC, value at risk, yield curve, zero-coupon bond, zero-sum game

See Jack Treynor (1961), Bill Sharpe (1964), John Lintner (1965), and Jan Mossin (1966). 2. “Professor William Sharpe Shares Nobel Prize for Economics,” gsb.stanford .edu. 3. As I finalize this book at the end of March 2020, equity markets have suffered one of their worst and fastest sell-offs in history due to the coronavirus pandemic, combined with a major oil shock. The Federal Reserve has aggressively lowered rates, and the three-month US Treasury bill is at zero. These are unusual circumstances. In this context, expected returns across asset classes should be about 1–2% lower due to lower rates, compared with those of 2018. But on the other hand, valuations are more attractive than they were back in 2018, in a way that may offset lower rates. 4.

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There are several analytical tools available to asset allocators to model fat tails, such as historical analysis, blended probability distributions, and scenario analysis. Nassim Taleb (2010) argues that we can’t predict higher moments. We don’t know when extreme losses will occur, but we should build resilience to them. Black swans, like the pandemic and oil shock of 2020, are rare, but they do exist. Taleb notes, “The Black Swan idea is not to predict—it is to describe this phenomenon, and how to build systems that can resist Black Swan events.”1 And “Black Swans being unpredictable, we need to adjust to their existence (rather than naïvely try to predict them).”2 There are many examples where we must build resilience to rare but consequential events that we can’t predict, in all areas of life.

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Aggregate from January 2008 to February 2020, if we exclude Treasuries and securitized bonds, the weight of high-quality bonds (rated AAA or AA) has decreased from 21 to 2% as a share of corporates. Hence, the weight of the riskier bonds (rated A or BAA) has increased from 89 to 98% of corporates and from 15 to 23% of the entire index. Therefore, a risk-off scenario based on historical returns for the index would likely underestimate exposure to loss. As the coronavirus and oil shock events unfolded during the first half of 2020, this deterioration in credit became painfully evident. There are many other such examples across asset classes. US small caps have deteriorated in quality; value stocks have become more cyclical; etc. The bottom line is that a simple scenario analysis based on historical asset class returns can lead to an underestimation or overestimation of exposure to loss, because asset classes change over time.

Generation X: Tales for an Accelerated Culture by Douglas Coupland

gravity well, McJob, oil shock, place-making, Ponzi scheme

" • But again, the village is not entirely dead. A few people do live there, and these few troopers have a splendid view of the windmill ranch down below them that borders the highway—tens of thousands of turbo blades set on poles and aimed at Mount San Gorgonio, one of the windiest places in America. Conceived of as a tax dodge after the oil shock, these windmills are so large and powerful that any one of their blades could cut a man in two. Curiously, they turned out to be functional as well as a good tax dodge, and the volts they silently generate power detox center air conditioners and cellulite vacuums of the region's burgeoning cosmetic surgery industry.

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Life is boring there, but are some thrills to be had: all the adults keep large quantities of cheaply sewn scarlet sex garments in their chests of drawers. These are panties and ticklers rocketed in from Korea— and I say rocketed in because Texlahoma is an asteroid orbiting the earth, where the year is permanently 1974, the year after the oil shock and the year starting from which real wages in the U.S. never grew ever again. The atmosphere contains oxygen, wheat chaff, and A.M. radio transmissions. It's a fun place to spend one day, and then you just want to get the hell out of there. Anyhow, now that you know the setting, let's jump into Claire's story.

Money: 5,000 Years of Debt and Power by Michel Aglietta

accelerated depreciation, Alan Greenspan, bank run, banking crisis, Basel III, Berlin Wall, bitcoin, blockchain, Bretton Woods, British Empire, business cycle, capital asset pricing model, capital controls, cashless society, central bank independence, circular economy, collapse of Lehman Brothers, collective bargaining, corporate governance, David Graeber, debt deflation, dematerialisation, Deng Xiaoping, double entry bookkeeping, energy transition, eurozone crisis, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, forward guidance, Francis Fukuyama: the end of history, full employment, German hyperinflation, income inequality, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, joint-stock company, Kenneth Arrow, Kickstarter, land bank, liquidity trap, low interest rates, margin call, means of production, Money creation, money market fund, moral hazard, Nash equilibrium, Network effects, Northern Rock, oil shock, planetary scale, plutocrats, precautionary principle, price stability, purchasing power parity, quantitative easing, race to the bottom, reserve currency, secular stagnation, seigniorage, shareholder value, special drawing rights, special economic zone, stochastic process, Suez crisis 1956, the payments system, the scientific method, tontine, too big to fail, trade route, transaction costs, transcontinental railway, Washington Consensus

It was for this reason that the turnaround of US monetary policy in October 1979, which would provoke a global recession and a catastrophic fall in raw materials prices, necessarily brought a devastating devaluation of the peso. The recession caused by the US monetary policy reversal brought an oil shock, which, combined with prohibitive international interest rates, drove fresh crises in all raw-materials producer countries. Mexico initiated the chain of crises in Latin America in August 1982. Brazil experienced sharp inflation across the 1980s, to which a series of monetary plans were unable to put a stop.

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The true winners of the destruction of the Bretton Woods system were the international investment banks, who were able to arbitrate between currencies and throw themselves into credit distribution policies at the international level, with all the risks of financial crisis that this entailed. From the second oil shock in 1978 onwards, they swept across the whole world in an orgy of indebtedness that lasted thirty years, before once more opening up an era of financial crises. The second financial globalisation process that resulted was very different from the first such process, because while the first had been inscribed in the gold standard monetary order, the second was coupled with a return to the international monetary jungle.

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Given the lack of any common rule, what can be said about exchange movements and the adjustment effects that they supposedly bring? AFTER THE JAMAICA ACCORDS: THE DECENTRALISED DOLLAR SEMI-STANDARD SYSTEM The second financial globalisation process began with two almost simultaneous events: the failure of the C20’s attempt to reform the international monetary system, and the first oil shock in 1973. This shock radically altered the extent and direction of international capital flows. There was now a polarisation between oil exporter and importer countries. The preservation of global growth demanded a powerful expansion of international credit. American investment banks and European universal banks sank into the breach opened up by governments’ incapacity to reorganise the financing of development and by the extremely small volume of IMF resources in relation to the financing that was required.

More: The 10,000-Year Rise of the World Economy by Philip Coggan

accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Alan Greenspan, Andrei Shleifer, anti-communist, Apollo 11, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Bear Stearns, Berlin Wall, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Boeing 747, bond market vigilante , Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Babbage, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, cotton gin, credit crunch, Credit Default Swap, crony capitalism, cross-border payments, currency peg, currency risk, debt deflation, DeepMind, Deng Xiaoping, discovery of the americas, Donald Trump, driverless car, Easter island, Erik Brynjolfsson, European colonialism, eurozone crisis, Fairchild Semiconductor, falling living standards, financial engineering, financial innovation, financial intermediation, floating exchange rates, flying shuttle, Ford Model T, Fractional reserve banking, Frederick Winslow Taylor, full employment, general purpose technology, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, global value chain, Gordon Gekko, Great Leap Forward, greed is good, Greenspan put, guns versus butter model, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, hydroponic farming, Ignaz Semmelweis: hand washing, income inequality, income per capita, independent contractor, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Jon Ronson, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, Les Trente Glorieuses, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low interest rates, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, Modern Monetary Theory, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, TaskRabbit, techlash, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, world market for maybe five computers, Yom Kippur War, you are the product, zero-sum game

Many people use the word neoliberal for this trend, but its definition is fairly vague, and it has become a catch-all term of abuse. 2. Jones, Multinationals and Global Capitalism, op. cit. 3. Max Roser, “Life expectancy”, Our World in Data, https://ourworldindata.org/life-expectancy 4. Laurel Graefe, “Oil shock of 1978–79”, https://www.federalreservehistory.org/essays/oil_shock_of_1978_79 5. Ibid. 6. Source: https://www.nber.org/cycles.html 7. J.-P. Fitoussi and E.S. Phelps, “Causes of the 1980s slump in Europe”, https://core.ac.uk/download/pdf/6252244.pdf 8. Olivier Blanchard and Lawrence Summers, “Hysteresis and the European unemployment problem”, https://www.nber.org/chapters/c4245.pdf 9.

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This chapter will deal with developments in the rich world before picking up the story of the developing world in Chapter 16. Another oil crisis and recession These developments were not predictable in the immediate context of 1979. The immediate problem the world economy had to deal with was another oil shock. In the turmoil surrounding its revolution in early 1979, Iranian oil production fell by 4.8 million barrels a day, or 7% of global output. Many oil users reacted by building up their inventories, thus creating extra demand; and Opec added further pressure by announcing a price increase in December 1979.

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Third, Britain joined the system in the hope that ERM membership would deliver the discipline needed to control inflation. The tighter monetary policy that followed German reunification exacerbated an early 1990s recession. The US had a mild downturn from July 1990 to March 1991 that was associated with higher rates and another oil shock after Iraq invaded Kuwait and was subsequently expelled by a Western-led coalition.39 British interest rates were in double digits for much of its ERM membership, inflicting considerable pain on the domestic economy. Speculators, of whom the most prominent was George Soros, a hedge-fund manager, bet on a falling pound and the Bank of England’s reserves started to dwindle.

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

In our oil example, this is a fairly innocuous mechanism that passes the verification test comfortably. The relationship between quantities supplied and prices makes sense intuitively, and there are plenty of real-world examples in which shocks to supply have had observable effects on prices in the hypothesized direction; consider the oil shock of 1973–74, for example. We do not need to have seen a demand curve or know what the technical definition of a market equilibrium is—both abstract concepts that do not have physical counterparts—to believe that the mechanism the model relies on is reasonable. But in other cases, the mechanism may result from more complicated behavior and may require greater justification.

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This demand-side view of macroeconomics prevailed pretty much through the 1970s. It was elaborated in models of increasing variety and spawned large-scale computerized versions that could generate quantitative forecasts of major macroeconomic aggregates such as employment levels and capacity utilization rates. Then two things happened: the oil shock and Robert Lucas. The oil crisis of 1973, precipitated by the embargo applied by the Organization of the Petroleum Exporting Countries (OPEC), fomented a new set of economic circumstances that had not been on economists’ radar screen: recession and inflation at the same time, or “stagflation.” Demand-side models wouldn’t be much help in the face of what was patently a supply-side shock.

Player One by Douglas Coupland

Albert Einstein, Anthropocene, call centre, double helix, Marshall McLuhan, neurotypical, oil shock, peak oil, post-oil, selective serotonin reuptake inhibitor (SSRI), uranium enrichment, Y2K

Marion King Hubbert was a Shell Oil geologist who predicted in 1956 that US domestic oil production would peak around 1970 and that global production would peak around 2000.” “And . . . ?” Warren continued, “That production peak is called Hubbert’s Peak. And it looks like it’s finally happened.” As an aside, Karen said, “The 1970s oil shock set his calendar back by a decade. But he was right.” “How on earth do you people know this?” “It’s kind of weird,” Karen said. “We met in a — God, this is so embarrassing — a Peak Oil Apocalypse chat room.” “Man,” Warren said, “wouldn’t Hubbert freak to see oil over $250 a barrel.” Rick said, “You mean you two actually did meet in a Peak Oil Apocalypse chat room?”

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“Okay,” Karen says, “while we try to figure out some other way of getting help, I’m having a drink. Who else wants one?” ___ The quartet sat on the floor behind the bar with their drinks, positioned halfway between the exits — the safest location, given all options. There was some discussion about the chaos that would surely ensue in the outside world, echoes of the 1973 oil shock but infinitely worse: the only gas people were going to get was whatever they still had in their tanks, maybe enough to get to work a few more times — except work was probably gone now too. Kill your neighbour for a tank? Why not? Will the military help out? Oh, please. Karen remembered a few months back seeing a truck that looked military, but she wasn’t sure if it was real or from a film shoot.

A Generation of Sociopaths: How the Baby Boomers Betrayed America by Bruce Cannon Gibney

1960s counterculture, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, American Society of Civil Engineers: Report Card, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Lives Matter, bond market vigilante , book value, Boston Dynamics, Bretton Woods, business cycle, buy and hold, carbon footprint, carbon tax, Charles Lindbergh, classic study, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate personhood, Corrections Corporation of America, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, dark matter, DeepMind, Deng Xiaoping, Donald Trump, Downton Abbey, Edward Snowden, Elon Musk, ending welfare as we know it, equal pay for equal work, failed state, financial deregulation, financial engineering, Francis Fukuyama: the end of history, future of work, gender pay gap, gig economy, Glass-Steagall Act, Haight Ashbury, Higgs boson, high-speed rail, Home mortgage interest deduction, Hyperloop, illegal immigration, impulse control, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jane Jacobs, junk bonds, Kitchen Debate, labor-force participation, Long Term Capital Management, low interest rates, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, medical bankruptcy, Menlo Park, Michael Milken, military-industrial complex, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Armstrong, neoliberal agenda, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, operation paperclip, plutocrats, Ponzi scheme, price stability, prosperity theology / prosperity gospel / gospel of success, quantitative easing, Ralph Waldo Emerson, RAND corporation, rent control, ride hailing / ride sharing, risk tolerance, Robert Shiller, Ronald Reagan, Rubik’s Cube, Savings and loan crisis, school choice, secular stagnation, self-driving car, shareholder value, short selling, side project, Silicon Valley, smart grid, Snapchat, source of truth, stem cell, Steve Jobs, Stewart Brand, stock buybacks, survivorship bias, TaskRabbit, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, War on Poverty, warehouse robotics, We are all Keynesians now, white picket fence, Whole Earth Catalog, women in the workforce, Y2K, Yom Kippur War, zero-sum game

The other major problem was unemployment, which was rising, albeit from the exceedingly low level of 3.9 percent in January 1970 to 5.1 percent just after the first oil shock, then rising substantially as recession set in. By 1979, it was back to 5.6 percent, before another oil shock wrought more havoc, but through the 1970s, conditions never quite achieved the same severity as what happened post-2008.17 It was a fairly good result considering the oil shocks, the large numbers of veterans returning to civilian employment after Vietnam, and the hordes of Boomers entering the workforce every year. But unemployment threatened the young Boomers most of all; the economy was simply not growing fast enough for them.

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Transport depends heavily on gas taxes, and as with taxes of all kinds under Boomer tenure, these have been falling. The federal gas tax is 18.4 cents plus a (volume-weighted) average 26.59 cents at the state level, for a total of 44.99 cents per gallon as of 2015.15 Until the 1970s, this arrangement had a certain logic, as prices were stable and road use tightly correlated with gas consumption. However, the oil shocks of the 1970s encouraged citizens to shift to somewhat more efficient cars while spurring inflation that diminished the real value of gas taxes because the federal and most state gas taxes are not indexed to inflation (unlike benefits payments or tax brackets that benefit Boomers).16 Technology may only exacerbate the disconnect, because if electric cars are ever widely adopted, their use will only expand funding gaps; e-cars are literal free riders.

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

90 percent rule, airline deregulation, Alan Greenspan, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, Dr. Strangelove, ending welfare as we know it, financial deregulation, financial engineering, financial innovation, fixed income, flag carrier, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, It's morning again in America, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Les Trente Glorieuses, long and variable lags, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, plutocrats, precautionary principle, price stability, profit motive, public intellectual, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Silicon Valley, Simon Kuznets, starchitect, Steve Bannon, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now

Once she said it, it seemed so obvious and sensible,” said Fed governor Laurence H. Meyer.109 Greenspan did not concede but, recognizing the argument could not be won, he proposed the Fed should cut inflation to 2 percent, then decide what came next.110 Bad luck played an underappreciated role in the failures of Keynesianism in the 1970s. The Vietnam War, a pair of oil shocks, and a slump in productivity growth all contributed to the unraveling of confidence in “activist economics.” Conversely, in the 1990s, the winds seemed permanently at the back of trust-the-market economics. The “peace dividend” from the end of the Cold War made it easier to reduce federal spending; globalization weighed on wages and prices; new technologies drove a surge in productivity and prosperity.

…

Leonid Brezhnev, the leader of the Soviet Union, hailed “the possibility of a profound crisis of the capitalist system.”38 The rest of the world was less enthused. “A Declaration of War in Trade Policy” read the banner headline in one of Germany’s leading newspapers, Süddeutsche Zeitung.39 Oil-producing states, which had long insisted on payment in dollars, threatened to raise prices, the initial step toward the first “oil shock” two years later. Japanese prime minister Eisaku Satō, already rocked by Nixon’s decision to go to China, got a call from Secretary of State William P. Rogers just ten minutes before Nixon spoke. “Not again!” Satō said.40 Over the next few years, exchange rates jitterbugged and nations wasted vast amounts of money trying to make those rates stop moving.

…

“For the U.S. to tell the foreign exchange markets what the rate of the dollar, the yen, the mark, or any currency should be strikes me as the height of arrogance,” Sprinkel said.81 America’s faith in markets was a mixed blessing for many foreign nations, too. The rise of the dollar caused a third oil shock for the rest of the world, which had to buy dollars to buy oil. Pierre Mauroy, the French prime minister, complained bitterly that the United States was taking advantage of its “exorbitant privilege” as the issuer of the nearest thing to an international currency, reviving a phrase coined by one of his predecessors in the 1960s — though that dubious privilege was now being conferred by the market rather than the Bretton Woods system.82 Foreign companies that had borrowed in dollars also were punished.

Free to Choose: A Personal Statement by Milton Friedman, Rose D. Friedman

affirmative action, agricultural Revolution, air freight, back-to-the-land, bank run, banking crisis, business cycle, Corn Laws, foreign exchange controls, Fractional reserve banking, full employment, German hyperinflation, invisible hand, means of production, minimum wage unemployment, oil shale / tar sands, oil shock, price stability, Ralph Nader, RAND corporation, rent control, road to serfdom, Sam Peltzman, school vouchers, Simon Kuznets, The Wealth of Nations by Adam Smith, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration

It did not produce any longer-lasting effect on the rate of inflation from that higher price level. In the five years after the 1973 oil shock, inflation in both Germany and Japan declined, in Germany from about 7 percent a year to less than 5 percent; in Japan from over 30 percent to less than 5 percent. In the United States inflation peaked a year after the oil shock at about 12 percent, declined to 5 percent in 1976, and then rose to over 13 percent in 1979. Can these very different experiences be explained by an oil shock that was common to all countries? Germany and Japan are 100 percent dependent on imported oil, yet they have done better at cutting inflation than the United States, which is only 50 percent dependent, or than the United Kingdom, which has become a major producer of oil.

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future by Paul Krugman

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, antiwork, Asian financial crisis, bank run, banking crisis, basic income, behavioural economics, benefit corporation, Berlin Wall, Bernie Madoff, bitcoin, blockchain, bond market vigilante , Bonfire of the Vanities, business cycle, capital asset pricing model, carbon footprint, carbon tax, Carmen Reinhart, central bank independence, centre right, Climategate, cognitive dissonance, cryptocurrency, David Ricardo: comparative advantage, different worldview, Donald Trump, Edward Glaeser, employer provided health coverage, Eugene Fama: efficient market hypothesis, fake news, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, frictionless, frictionless market, fudge factor, full employment, green new deal, Growth in a Time of Debt, hiring and firing, illegal immigration, income inequality, index fund, indoor plumbing, invisible hand, it is difficult to get a man to understand something, when his salary depends on his not understanding it, job automation, John Snow's cholera map, Joseph Schumpeter, Kenneth Rogoff, knowledge worker, labor-force participation, large denomination, liquidity trap, London Whale, low interest rates, market bubble, market clearing, market fundamentalism, means of production, Modern Monetary Theory, New Urbanism, obamacare, oil shock, open borders, Paul Samuelson, plutocrats, Ponzi scheme, post-truth, price stability, public intellectual, quantitative easing, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, secular stagnation, Seymour Hersh, stock buybacks, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, universal basic income, very high income, We are all Keynesians now, working-age population

Rising welfare rolls may have been a big political problem, but a runaway welfare state more broadly just wasn’t an issue—hey, these days right-wingers complaining about a nation of takers tend to use the low-dependency seventies as a baseline. What we did have was a wage-price spiral: workers demanding large wage increases (those were the days when workers actually could make demands) because they expected lots of inflation, firms raising prices because of rising costs, all exacerbated by big oil shocks. It was mainly a case of self-fulfilling expectations, and the problem was to break the cycle. So why did we need a terrible recession? Not to pay for our past sins, but simply as a way to cool the action. Someone—I’m pretty sure it was Martin Baily—described the inflation problem as being like what happens when everyone at a football game stands up to see the action better, and the result is that everyone is uncomfortable but nobody actually gets a better view.

…

What do we see in the figure? First, the 1947–1973 numbers show what real, broad-based prosperity looks like. Over that period incomes of all groups rose at roughly the same rapid clip, more than 2.5 percent annually. Between 1973 and 1979, as the economy was battered by slow productivity growth and oil shocks, income growth became both much slower and more uneven. Finally, a new pattern emerged after 1979: generally slower income growth, but in particular a strong tilt in the growth pattern, with incomes rising much faster at the top end of the distribution than in the middle, and actually declining at the bottom.

…

., 150, 208, 302, 320, 362 on health care, 53–55, 66, 339, 361 and international trade, 252 and taxes, 216, 219, 229 Obama administration: on debt and unemployment, 208 “hijacked” commission of, 198–200 and revenue growth, 225 stimulus plan of, 104, 107–8, 113–14, 115–17, 118–20, 131, 193, 206, 362 Obamacare, see Affordable Care Act O’Brien, Michael, 126 Ocasio-Cortez, Alexandria (AOC), 234, 236, 237, 320–21 Occupy Wall Street, 285 O’Connor, Reed, 367, 369 oil shocks, 126 Oklahoma, tax cuts in, 293 Okun’s Law, 113 oligarchy, 283, 349, 350 Olson, Mancur, The Logic of Collective Action, 354–55 Operation Coffee Cup (1961), 322 optimum currency areas, 177 Palin, Sarah, 54 Panama Papers, 349 Pangloss, Doctor (fict.), 135, 140 “paperclip maximizers,” 357 “Paranoid Style in American Politics, The” (Hofstadter), 346 parasites, 354–57 Paulson, Henry, 91 PBS Newshour, 169–71 Pelosi, Nancy: achievements of, 361–63 and Affordable Care Act, 35–36, 55, 361, 367 and financial reform, 362 as House Speaker, 76, 344, 362, 363 on “monstrous endgame,” 367, 369 on Social Security, 15, 35, 306, 361 and stimulus plan, 362 and trade agreement, 372 on the wall as “manhood thing,” 370 Pence, Mike, 73 pensions: defined benefit, 14 defined contribution, 14–15 401(k)-type plans, 31–32 private, decline of, 31–32 Perlstein, Rick, 302, 354, 355 Perot, H.

Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms by Russell Napier

Alan Greenspan, Albert Einstein, asset allocation, banking crisis, Bear Stearns, behavioural economics, book value, Bretton Woods, business cycle, buy and hold, collective bargaining, Columbine, cuban missile crisis, desegregation, diversified portfolio, fake news, financial engineering, floating exchange rates, Fractional reserve banking, full employment, Glass-Steagall Act, global macro, hindsight bias, Kickstarter, Long Term Capital Management, low interest rates, market bubble, Michael Milken, military-industrial complex, Money creation, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, price stability, reserve currency, risk free rate, Robert Gordon, Robert Shiller, Ronald Reagan, short selling, stocks for the long run, yield curve, Yogi Berra

There was some evidence the medicine was working and annual inflation was back below 3% by the middle of 1972. In 1973, Nixon dismantled price controls and inflation was quickening, and the equity market declining, when along came the “oil shock” as the Organisation of Petroleum Exporting Countries (OPEC) more than tripled the price of oil - from $3.12 a barrel in October 1973 to $11.63 in December. Annual inflation, running at 2.9% in August 1972, surged to 12.5% by December 1974. There were actually two oil shocks in the 1970s. The first began in October 1973, when Arab members of the OPEC announced they would no longer ship oil to countries supporting Israel in its war with Egypt.

…

The first began in October 1973, when Arab members of the OPEC announced they would no longer ship oil to countries supporting Israel in its war with Egypt. The oil price had tripled by Christmas 1973. The second oil crisis was caused by a decline in oil exports from Iran following the revolution of January 1979. By year-end, the oil price had risen 150%. Within 12 months of both oil shocks, G7 GDP contracted. From December 2002 to June 2005, the oil price has risen 160%. This would have been bad enough for investors, but the huge surprise was that the sharp recession, from November 1973 to March 1975, failed to bring inflation under control. In April 1973, the term “stagflation”, a combination of low growth and inflation, made its first appearance in the pages of the Wall Street Journal.

How PowerPoint Makes You Stupid by Franck Frommer

Abraham Maslow, Albert Einstein, An Inconvenient Truth, business continuity plan, cuban missile crisis, dematerialisation, disinformation, hypertext link, invention of writing, inventory management, invisible hand, Just-in-time delivery, knowledge worker, Larry Ellison, Marshall McLuhan, means of production, new economy, oil shock, Ronald Reagan, Silicon Valley, Steve Jobs, Steve Wozniak, union organizing

It is a regular and permanent occupation intended to spread their good methods, their perceptive analyses, their organizational methods, their strategic recommendations—in short, models of thinking concocted in managerial agencies primarily based in the United States. This democratization and proliferation of new models of thinking surfaced in the early 1980s after various economic disturbances, particularly the two oil shocks. Companies at the time were forced to substantially change their organizational and operational methods. They had to resolve to take the medication prescribed by the only “therapists” able to treat them—consultants, strategic advisers serving many companies in public relations and information systems.1 Thanks to the thousands of person-days sold to client companies and the millions of slides repeating essentially the same models and the same arguments, these experts in recommendations have been able to link rationality, authority, and entertainment, if not to help their clients, at least to enrich their employers.

…

His three most famous books, which he published himself for reasons of graphic precision, are The Visual Display of Quantitative Information (1983), Envisioning Information (1990), and Visual Explanation (1997), all published by Graphics Press, Cheshire, CT. 20. Tufte comments ironically on the barrels, gas pumps, and derricks widely used as illustrative devices in American magazines during the oil shocks of 1973 and 1979. 21. The literature in England and America on this subject has been plentiful in the last twenty years. See in particular three papers by Vivien Beattie and Michael J. Jones: “A Six-Country Comparison of the Use of Graphs in Annual Reports,” International Journal of Accounting 36, no. 2 (2001): 195–222; “A Comparative Study of the Use of Financial Graphs in the Corporate Annual Reports of Major U.S. and U.K.

The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

addicted to oil, air freight, airline deregulation, Alan Greenspan, Albert Einstein, asset-backed security, bank run, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon tax, central bank independence, collateralized debt obligation, collective bargaining, compensation consultant, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, currency risk, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Glass-Steagall Act, Hernando de Soto, income inequality, income per capita, information security, invisible hand, Joseph Schumpeter, junk bonds, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, open immigration, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, Reminiscences of a Stock Operator, reserve currency, Right to Buy, risk tolerance, Robert Solow, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, special economic zone, stock buybacks, stocks for the long run, Suez crisis 1956, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tipper Gore, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, We are all Keynesians now, working-age population, Y2K, zero-sum game

It's typical that in times of great national urgency, every congressman feels he has to put out a bill; presidents feel the pressure to act too. Under those conditions you can get shortsighted, ineffective, often counterproductive policies, like the gasoline rationing that President Nixon imposed during the first OPEC oil shock in 1973. (That policy caused gas lines in some parts of the country that fall.) But with fourteen years under my belt as Fed chairman, I'd seen the economy pull through a lot of crises—including the largest one-day crash in the history of the stock market, which happened five weeks after I took the job.

…

As we talked through the possibilities, President Ford worried that America would find itself trapped in a vicious circle of falling demand, layoffs, and gloom. Since none of the forecasting models could deal with the circumstances we were facing, we were flying blind. All we could tell him was that this might be an inventory-based recession, aggravated by the oil shock and inflation—maybe a Category 2 or 3. Or it might be a Category 5. The president had to make a choice. With the discomfort index nearing 20 percent, there was tremendous political pressure from Congress to slash taxes or massively pump up government spending. That was the way to deal with a Category 5.

…

Coming off a decade of civil rights and anti-Vietnam War marches, anyone who could have foreseen 9 percent unemployment would have expected massive demonstrations and barricades in the streets, not just in the United States but also in Europe and Japan, where the economic problems were equally severe. Yet that didn't happen. Perhaps the world was simply exhausted by the oil shock and the decade that had led up to it. But the era of protest was over. America was going through this period with what seemed like a new sense of cohesion. President Ford held off the pressure, and his economic program eventually made it into law (Congress did raise the tax rebate by almost 50 percent, to about $125 per average household).

Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, public intellectual, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus, zero-sum game

The gap widened again in the last three decades of the twentieth century with the spread of authoritarian regimes throughout the region. In addition, many of the large countries in Latin America catastrophically failed to adjust to the rapidly changing external environment, resulting from the two oil shocks of the 1970s. Burgeoning fiscal deficits, attempts to monetize deficits through growth in money supplies, hyperinflation, and overvalued exchange rates in Mexico, Brazil, Argentina, Peru, and other countries set the stage for the debt crisis of the 1980s and the subsequent drop in real growth rates throughout Latin America.

…

Indeed, Alice Amsden has pointed out that, by the 1970s, South Korea’s average rate of tariff protection was comparable to that of Argentina.7 Across-theboard openness to market forces and minimal state intervention were thus not the sine qua non of economic growth in either region. Economic performance began diverging dramatically between East Asia and Latin America primarily after the oil shocks of the 1970s; the difference in long-term performance (and thus the reason for Latin America’s failure to close the gap with the United States) was largely Conclusion 273 the result of Latin America’s failure to adjust to the changed conditions of the external environment. As current account deficits began piling up in all non–oil producing countries, many of those in East Asia tightened their belts, cut government spending, and kept fiscal deficits under control.

…

Latin America, as Dani Rodrik has pointed out, grew impressively under the sway of heterodox protectionist policies in the benign environment of the 1950s and 1960s, and its performance has been uneven during the era of liberal reform from the late 1980s onward.8 The real problems emerged as a result of the region’s failure to adjust to the oil shocks and to the sharply less benign international environment that emerged during the 1970s, something the East Asian fast developers managed much more successfully. This suggests a second critical factor that explains the development gap: institutions. 274 Conclusion Institutions Many of the authors in this volume, including Robinson, Roett and González, Przeworski and Curvale, and Fukuyama, identified weak or defective institutions as one of the most significant sources of the development gap.

Transcending the Cold War: Summits, Statecraft, and the Dissolution of Bipolarity in Europe, 1970–1990 by Kristina Spohr, David Reynolds

anti-communist, bank run, Berlin Wall, Bretton Woods, computer age, conceptual framework, cuban missile crisis, Deng Xiaoping, failed state, Fall of the Berlin Wall, guns versus butter model, Kickstarter, Kitchen Debate, liberal capitalism, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nixon shock, oil shock, open borders, Ronald Reagan, Ronald Reagan: Tear down this wall, shared worldview, Strategic Defense Initiative, Thomas L Friedman, Yom Kippur War, zero-sum game

A second agreement on strategic arms limitation (the SALT II treaty) was delayed until 1979 and it failed to grapple with the issue of nuclear weapons stationed in Europe. All this generated uncertainty in Western Europe about the viability of détente at a time when the developed world was also wracked by the oil shock, economic recession, and rampant inflation. The summitry of 1978–9 (chapter 5) tried to address these problems, with the consolidation of the Group of 7 (G7) as an instrument of international economic governance and the Guadeloupe summit of January 1979—an attempt to re-establish the credibility of NATO’s defence posture.

…

More significant at Helsinki were the talks that Ford held with his British, French, and West German counterparts. Meeting at the British ambassador’s residence, the West’s leading statesmen reflected on the Final Act, which they judged a success. But then they debated their common predicament of ‘economic and social disorder and rising unemployment’ following the 1973–4 oil shocks.84 The ‘self-evident inability’ of governments ‘to do anything in the face of this crisis’, warned French president Valéry Giscard d’Estaing, was ‘a serious weakness for the West’, upon which the USSR would ‘play’. West German Chancellor Helmut Schmidt circulated a ‘private memorandum’ arguing for concerted international action to address ‘economic problems’ that were, he asserted, ‘a greater threat to the West than the Soviet Union’.85 Schmidt urged Ford: ‘Your strong leadership is needed’.

…

In the second half of the 1970s it was driven by the Western Europeans in reaction to the friction and drift at the superpower level. This aroused a profound sense of insecurity, especially in the minds of Valéry Giscard d’Estaing and Helmut Schmidt, the leaders of France and the Federal Republic, who directed the Western response. Part of their concern was economic—Western Europe was far more vulnerable to the oil shock than energy-rich America and also more seriously ravaged by stagflation—but they also feared that the lack of a new financial order to replace Bretton Woods would be exploited politically by Moscow. Acting on their shared concerns, Giscard and Schmidt convened the Rambouillet economic summit in November 1975, precursor of the annual meetings of key Western leaders that became known as the G7.

Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics by Francis Fukuyama

Asian financial crisis, banking crisis, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, cognitive bias, contact tracing, cuban missile crisis, currency risk, energy security, Fairchild Semiconductor, flex fuel, global pandemic, Herman Kahn, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John von Neumann, low interest rates, mass immigration, Menlo Park, Mikhail Gorbachev, moral hazard, Norbert Wiener, oil rush, oil shale / tar sands, oil shock, packet switching, RAND corporation, Ray Kurzweil, reserve currency, Ronald Reagan, The Wisdom of Crowds, trade route, Vannevar Bush, Vernor Vinge, Yom Kippur War

The fact that ten of the top fourteen oil-exporting countries are politically unstable, that the United States may be facing a long period of increased hurricane activity in the Gulf of Mexico, and that, following the Abqaiq attack, al-Qaeda promised that “we shall not cease our attacks until our territories are liberated,” implies that it is only a matter of time before the United States finds itself in the midst of a severe oil shock.3 Here is an eminently predictable catastrophe if ever there was one. The Energy Weapon Is Back Transportation underlies the modern U.S. economy. With 97 percent of U.S. transportation energy based on petroleum, oil is the lifeblood of America’s economy. Without oil, goods and raw materials cannot reach their destinations, service providers cannot arrive at their clients, and children cannot go to school.

…

An aggressive, inventive energy policy can gradually diminish the role of oil in world politics and reduce predictable friction between consumers and producers and among consumers themselves. Such a vision is both practical and economical—far cheaper than maintaining the current energy system. The only question is whether our leaders will lead or will instead be dragged to act by the most painful oil shock in American history. 2990-7 ch08 barrett 7/23/07 12:12 PM Page 82 8 Emerging Infectious Diseases: Are We Prepared? Scott Barrett N ews that a person has become infected with HIV is a personal tragedy but of no consequence to the world at large. News of the first person to be infected with HIV—now that, had it been revealed years ago at the start of the pandemic, would have been of monumental importance.

Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

It opposed developed and developing countries on the link between reserve creation and aid to development. Meanwhile market events had overpowered the ambition of reestablishing a rule-based system. As early as February 1973, the par-value exchange rate system had burst out and generalized floating had spread in a vacuum of consistent responses to mounting inflationary pressures. Finally, the first oil shock of October 1973 triggered much larger capital flows than experienced beforehand with the recycling by Euro-banks of the surpluses of oil producing countries. Faced with such adverse phenomena, the C20 changed course. Giving up its grand design, it focused on the task of arming the Fund with a legal framework to operate in an environment quite at odds with the Bretton Woods era.

…

This view expected capital markets to take care of themselves and to drive exchange rates to their equilibrium values reflecting the conditions prevailing in domestic economies. However, the interplay between foreign borrowing and exchange rates dynamics was the locus of new problems which arose in the wake of the second oil shock. International capital markets fed the world with a fast-increasing amount of reserves, but they proved unable to regulate the distribution of borrowed reserves among countries. Sovereign indebtedness was not properly assessed, entailing abrupt disruptions between excessive tolerance to borrowing and acute credit crunches.

The Secret World of Oil by Ken Silverstein

business intelligence, clean water, corporate governance, corporate raider, Donald Trump, energy security, Exxon Valdez, failed state, financial engineering, Global Witness, Google Earth, John Deuss, offshore financial centre, oil shock, oil-for-food scandal, Oscar Wyatt, paper trading, rolodex, Ronald Reagan, vertical integration, WikiLeaks, Yom Kippur War

he asked. ‘Two British police who arrested me when we were fighting for our independence. And you know what? I don’t bear a grudge. I’ll do business with the British as long as you give me the right price. So don’t give me your political propaganda, just give me a good contract.” After the first OPEC oil shock, in 1973, Calil became seriously involved in the petroleum business, first trading oil and then obtaining concessions and reselling them. Within five years, oil had become the largest sector of his business. Calil’s influence and wealth soared after the Nigerian general Ibrahim Babangida assumed power in a 1985 coup.

…

I took a fifty-minute train ride from Geneva to the town of Montreux, at the foot of the Alps, to meet with a retired commodities broker who got his start in the 1980s trading cement, rice, and spices before moving on to buying and selling oil and refined products. We had lunch across the street from the train station at the Grand Hotel. Since the oil shocks of the 1970s, the prevailing analysis has tended to describe oil prices in strict supply-and-demand terms, often placed in a geopolitical context. If it wasn’t conflict in the Middle East that was jacking up prices, it was devious oil cartels tinkering with the spigot, Hugo Chávez nationalizing refineries, rebels in the Niger Delta blowing up pipelines, or demand from the emerging middle class in India and China.

Fed Up!: Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader by Colin Lancaster

"World Economic Forum" Davos, Adam Neumann (WeWork), Airbnb, Alan Greenspan, always be closing, asset-backed security, beat the dealer, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, Black Monday: stock market crash in 1987, bond market vigilante , Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, buy the rumour, sell the news, Carmen Reinhart, Chuck Templeton: OpenTable:, collateralized debt obligation, coronavirus, COVID-19, creative destruction, credit crunch, currency manipulation / currency intervention, deal flow, Donald Trump, Edward Thorp, family office, fear index, fiat currency, fixed income, Flash crash, George Floyd, global macro, global pandemic, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Growth in a Time of Debt, housing crisis, index arbitrage, inverted yield curve, Jeff Bezos, Jim Simons, junk bonds, Kenneth Rogoff, liquidity trap, lockdown, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, Masayoshi Son, Michael Milken, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, moral hazard, National Debt Clock, Nixon triggered the end of the Bretton Woods system, Northern Rock, oil shock, pets.com, Ponzi scheme, price stability, proprietary trading, quantitative easing, Reminiscences of a Stock Operator, reserve currency, Ronald Reagan, Ronald Reagan: Tear down this wall, Sharpe ratio, short selling, short squeeze, social distancing, SoftBank, statistical arbitrage, stock buybacks, The Great Moderation, TikTok, too big to fail, trickle-down economics, two and twenty, value at risk, Vision Fund, WeWork, yield curve, zero-sum game

“I’ll start with Paul Volcker, who died yesterday and who is the first one I can remember from my childhood. He was chairman of the Fed under Jimmy Carter and Ronald Reagan from ‘79 to ‘87, back when you could work for both a Democratic and Republican boss. It was a messy time. America was dealing with oil shocks, the fallout from the Vietnam War, the end of the Bretton Woods system, and then massive tax cuts. Inflation spiked when Nixon decided to leave Bretton Woods, the gold standard. The US dollar’s status as the reserve currency of the world was in serious doubt. Investors were convinced that inflation would never come down and were dumping Treasuries at any price.

…

Liquidity is gone. You do your damnedest to fucking just stay alive, maintain fewer positions, figure out where the pain is. Trade small so you can widen stops. Don’t get cute. Don’t try to be a hero. It’s insane how events such as this seem to get multiplied. It’s not just one. It’s global pandemic and oil shock, both unexpected. Today, this combination is exposing our economy’s Achilles’ heel: too much fucking debt. That’s our soft underbelly, our weakest link. We’ve been running this scam for fifty fucking years. We built a world based on a debt bubble of epic proportions. It has tried to pop lots of times, but every time, we just shuffle the deck.

How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need by Bill Gates

agricultural Revolution, call centre, carbon footprint, carbon tax, clean water, coronavirus, COVID-19, decarbonisation, electricity market, energy security, energy transition, fear of failure, Ford Model T, global pandemic, Haber-Bosch Process, Hans Rosling, Intergovernmental Panel on Climate Change (IPCC), invention of air conditioning, Louis Pasteur, megacity, microplastics / micro fibres, negative emissions, oil shock, performance metric, plant based meat, purchasing power parity, risk tolerance, social distancing, Solyndra, systems thinking, TED Talk, the built environment, the High Line, urban planning, yield management

In 1910, only 12 percent of Americans had electric power in their homes. By 1950, more than 90 percent did, thanks to efforts like federal funding for dams, the creation of federal agencies to regulate energy, and a massive government project to bring electricity to rural areas. Energy security. In response to the oil shocks of the 1970s, the United States set out to increase domestic production from various energy sources. The federal government began its first major research and development projects in 1974. The next year saw major legislation related to energy conservation, including fuel efficiency standards for cars.

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China, which accounts for a large and growing share of the world’s wind-generated power, has said it will soon stop subsidizing onshore wind projects because the electricity they produce will be just as cheap as the power from conventional sources. To understand how we got to this point, look at Denmark. Amid the oil shocks of the 1970s, the Danish government enacted a number of policies with an eye toward promoting wind energy and importing less oil. Among other things, the government put a lot of money into renewable-energy R&D. They weren’t the only ones who did this (around this time, the United States started working on utility-scale wind turbines in Ohio), but the Danes did something unusual.

The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds by Maneet Ahuja, Myron Scholes, Mohamed El-Erian

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Asian financial crisis, asset allocation, asset-backed security, backtesting, Bear Stearns, Bernie Madoff, book value, Bretton Woods, business process, call centre, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, en.wikipedia.org, family office, financial engineering, fixed income, global macro, high net worth, high-speed rail, impact investing, interest rate derivative, Isaac Newton, Jim Simons, junk bonds, Long Term Capital Management, managed futures, Marc Andreessen, Mark Zuckerberg, merger arbitrage, Michael Milken, Myron Scholes, NetJets, oil shock, pattern recognition, Pershing Square Capital Management, Ponzi scheme, proprietary trading, quantitative easing, quantitative trading / quantitative finance, Renaissance Technologies, risk-adjusted returns, risk/return, rolodex, Savings and loan crisis, short selling, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, stock buybacks, systematic bias, systematic trading, tail risk, two and twenty, zero-sum game

I was happy sleeping on a cot in a studio apartment. All I cared about was having the freedom to do what I wanted to do.” As luck would have it, Dalio’s return to Harvard coincided with a huge surge of inflation. The breakdown of the monetary system in 1971 had caused a surge that pushed commodity prices higher and created the first oil shock in 1973. To combat inflation, the Federal Reserve tightened monetary policy, which brought on what until then was the worst bear market since the Great Depression. All of a sudden, there was a rush into previously unfashionable commodities futures trading, and brokerage houses clamored to build new trading departments.

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Somewhat contradictory to its placid work environment, however, the Bridgewater team is awfully focused on crisis. Dalio creates universal investment and management principles by learning from history. He analyzes how different countries, cultures, and people around the world react to different incidents like debt or oil shocks, for example, and figures out the variables that affected the different outcomes. Stripping away all the variables let Bridgewater arrive at universal laws for doing business. “If you’re limiting yourself to what you experienced, you are going to be in trouble. . . . I studied the Great Depression.

The Dollar Meltdown: Surviving the Coming Currency Crisis With Gold, Oil, and Other Unconventional Investments by Charles Goyette

Alan Greenspan, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, business cycle, buy and hold, California gold rush, currency manipulation / currency intervention, Deng Xiaoping, diversified portfolio, Elliott wave, fiat currency, fixed income, Fractional reserve banking, housing crisis, If something cannot go on forever, it will stop - Herbert Stein's Law, index fund, junk bonds, Lao Tzu, low interest rates, margin call, market bubble, McMansion, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, oil shock, peak oil, pushing on a string, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Saturday Night Live, short selling, Silicon Valley, transaction costs

Unemployment hit 9 percent, while the official inflation rate climbed to 12.2 percent in 1974 and 13.3 percent in 1979. It was a period of confused monetary policy. Businesses encountered Nixon’s disastrous wage and price controls, which fixed the prices at which they could sell, while they also had to contend with huge increases in borrowing costs. And then came the oil shocks. OPEC warned repeatedly that a change in the value of the dollar would result in higher nominal oil prices, so when Nixon suspended dollar convertibility to gold in 1971, oil prices were bound to climb. They quadrupled from $3 per barrel in 1972 to $12 in 1974. They spiked again beginning in the late 1970s until they hit $35 in 1981.

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Even with gas lower than it had been since 2004, the sting of $4.00 gasoline is not likely to be forgotten by drivers for some time. The destruction of demand caused by high prices can persist even after prices have fallen back. As American consumers began moving massively to smaller cars after the oil shocks of the 1970s, average fuel consumption declined and continued to do so for years even after the price of gasoline had retreated sharply. By the end of 2008, in response to the recent price shocks, plants making SUVs were closing left and right. On December 23, General Motors closed an Ohio plant that had turned out 3.7 million large SUVs.

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit by William Keegan

Alan Greenspan, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, capital controls, congestion charging, deindustrialization, Donald Trump, Etonian, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial innovation, financial thriller, floating exchange rates, foreign exchange controls, full employment, gig economy, inflation targeting, Jeremy Corbyn, Just-in-time delivery, light touch regulation, liquidity trap, low interest rates, Martin Wolf, military-industrial complex, moral hazard, negative equity, Neil Kinnock, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, North Sea oil, Northern Rock, oil shock, Parkinson's law, Paul Samuelson, pre–internet, price mechanism, quantitative easing, Ronald Reagan, school vouchers, short selling, South Sea Bubble, Suez crisis 1956, The Chicago School, transaction costs, tulip mania, Winter of Discontent, Yom Kippur War

The unfortunate fact of the matter was that this doubling in the price of oil was obviously going to drive a coach and horses through the government’s economic strategy, even before the next batch of price increases. This exercise in procrastination did the government no good. It might have been wise to get their excuses in early about the way the oil shock was going to damage their economic strategy, but they chose not to own up immediately to the full impact. There can be something funny about even the most authoritative of newspapers – a curious lack of confidence and a temptation to believe that the truth lies elsewhere. When the FT’s editor, Fredy Fisher, noticed the difference between his own correspondent’s version and that of the others, he summoned Adrian and told him to print an apology the following day.

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Dell added: ‘Barbara Castle’s legislation might well have proved equally unworkable.’ I wonder. Indeed, the background to the onset of the three-day week and the fall of the Heath government can be pinned down to three factors: first, the succession of events that led to the collapse of what was known as the Selsdon Man approach; secondly, the way in which the oil crisis – or ‘oil shock’, as the Japanese christened it – compounded the government’s economic problems; and thirdly (in my opinion), a missed opportunity during crucial talks at a meeting of ministers, employers and unions under the auspices of the National Economic Development Council on 9 January 1974. Selsdon Man was the phrase with which Harold Wilson had derided the policies that lay behind the Conservative manifesto in the 1970 general election – supposedly hammered out at a weekend meeting at the Selsdon Park Hotel, Croydon, Surrey.

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival by Charles Goodhart, Manoj Pradhan

asset-backed security, banks create money, Berlin Wall, bonus culture, Boris Johnson, Branko Milanovic, Brexit referendum, business cycle, capital controls, carbon tax, central bank independence, commodity super cycle, coronavirus, corporate governance, COVID-19, deglobalization, demographic dividend, demographic transition, Deng Xiaoping, en.wikipedia.org, Fall of the Berlin Wall, financial independence, financial repression, fixed income, full employment, gig economy, Gini coefficient, Greta Thunberg, housing crisis, income inequality, inflation targeting, interest rate swap, job automation, Kickstarter, long term incentive plan, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, middle-income trap, non-tariff barriers, offshore financial centre, oil shock, old age dependency ratio, open economy, paradox of thrift, Pearl River Delta, pension reform, Phillips curve, price stability, private sector deleveraging, quantitative easing, rent control, savings glut, secular stagnation, shareholder value, special economic zone, The Great Moderation, The Wealth of Nations by Adam Smith, total factor productivity, working poor, working-age population, yield curve, zero-sum game

Given significantly cheaper capital goods, the cost of accumulating a given stock of capital uses up a smaller amount of the economy’s stock of savings. To some extent, this can counter the savings deficit created by ageing demographics and somewhat temper the rise in both the interest rate and wages. Historical experience after the oil shock provides evidence of such substitution. Manufacturing in many economies that faced favourable/unfavourable shocks to the price of an input of production underwent a change in the capital/labour ratio in a significant way. Data from 1972–88 from manufacturing plants in the USA (Davis et al. 1996) show that the 1970s oil price shock led to the demise of energy-intensive manufacturing.

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In order to identify the Phillips curve in such conditions of simultaneity, one would need to be able to assess and quantify occasions of supply shocks and/or monetary policy errors.5 That is not easy. What we do know, however, is that supply shocks were far more prevalent between 1970 and 1990, e.g. oil shocks in 1973/1974, 1979, 1986 and commodity price shocks and monetary policy errors more obvious, than in the subsequent years, especially during the Great Moderation, 1992–2005, when everything macroeconomic seemed to remain stable. Thus the fact that the slope of the calculated relationship between unemployment (or the output gap) and wage (price) inflation appeared to become more horizontal in these later decades may be just an artefact of better monetary policies and fewer supply shocks, rather than representing any change to the underlying structural relationship.

The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", 3D printing, 9 dash line, activist fund / activist shareholder / activist investor, addicted to oil, Admiral Zheng, Albert Einstein, American energy revolution, Asian financial crisis, autonomous vehicles, Ayatollah Khomeini, Bakken shale, Bernie Sanders, BRICs, British Empire, carbon tax, circular economy, clean tech, commodity super cycle, company town, coronavirus, COVID-19, decarbonisation, deep learning, Deng Xiaoping, Didi Chuxing, disruptive innovation, distributed generation, Donald Trump, driverless car, Edward Snowden, Elon Musk, energy security, energy transition, failed state, Ford Model T, geopolitical risk, gig economy, global pandemic, global supply chain, green new deal, Greta Thunberg, hydraulic fracturing, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), inventory management, James Watt: steam engine, John Zimmer (Lyft cofounder), Kickstarter, LNG terminal, Lyft, Malacca Straits, Malcom McLean invented shipping containers, Masayoshi Son, Masdar, mass incarceration, megacity, megaproject, middle-income trap, Mikhail Gorbachev, mutually assured destruction, new economy, off grid, oil rush, oil shale / tar sands, oil shock, open economy, paypal mafia, peak oil, pension reform, power law, price mechanism, purchasing power parity, RAND corporation, rent-seeking, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, Russian election interference, self-driving car, Silicon Valley, smart cities, social distancing, South China Sea, sovereign wealth fund, Suez crisis 1956, super pumped, supply-chain management, TED Talk, trade route, Travis Kalanick, Twitter Arab Spring, Uber and Lyft, uber lyft, ubercab, UNCLOS, UNCLOS, uranium enrichment, vertical integration, women in the workforce

The Test of Prudence 25. Belt and Road Building MAPS OF THE MIDDLE EAST 26. Lines in the Sand 27. Iran’s Revolution 28. Wars in the Gulf 29. A Regional Cold War 30. The Struggle for Iraq 31. The Arc of Confrontation 32. The Rise of the “Eastern Med” 33. “The Answer” 34. Oil Shock 35. Run for the Future 36. The Plague ROADMAP 37. The Electric Charge 38. Enter the Robot 39. Hailing the Future 40. Auto-Tech CLIMATE MAP 41. Energy Transition 42. Green Deals 43. The Renewable Landscape 44. Breakthrough Technologies 45. What Does “Energy Transition” Mean in the Developing World?

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There were still an estimated fifteen to twenty thousand ISIS fighters, plus another ten thousand held in makeshift prisons, plus the affiliates and followers around the world. Yet in one significant way ISIS’s impact had faded much earlier. In 2014, its lightning advance across Iraq had induced panic in the oil market and caused it to spike. But, the impact on oil prices had hardly lasted. Chapter 34 OIL SHOCK For three years, 2011 through 2013, the oil price had been surprisingly stable—a little over $100 a barrel. Though that was almost five times higher than it had been a decade earlier, the world had become accustomed to this new price. It was called the “new normal,” and on this basis countries could make their budgets and companies would finance their projects.

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“In Audio Recording, ISIS Leader Abu Bakr Al-Baghdadi Says Operations Underway, Urges ‘Caliphate Soldiers’ to Free Captives,” MEMRI, September 16, 2019. 17. Department of Defense Briefing on Baghdadi raid, October 30, 2019, www.defense.gov/Newsroom/Transcripts/Transcript/Article/2004092/department-of-defense-press-briefing-by-assistant-to-the-secretary-of-defense-f/. Chapter 34: Oil Shock 1. Neil Hume and Anjli Raval, “Iraq Violence Lights Fuse to Oil Price Spike,” Financial Times, June 20, 2014. 2. Ali Al-Naimi, Out of the Desert: My Journey from Nomadic Bedouin to the Heart of Global Oil (New York: Portfolio/Penguin, 2016), pp. 286–88; Robert McNally, Crude Volatility: The History and the Future of Boom-Bust Oil Prices (New York: Columbia University Press, 2017), pp. 212–16; Raf Sanchez, “Barack Obama: Iran Could Be a ‘Successful Power,” Telegraph, December 29, 2014. 3.

Street Smart: The Rise of Cities and the Fall of Cars by Samuel I. Schwartz

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active transport: walking or cycling, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, autonomous vehicles, bike sharing, car-free, City Beautiful movement, collaborative consumption, congestion charging, congestion pricing, crowdsourcing, desegregation, Donald Shoup, driverless car, Enrique Peñalosa, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, high-speed rail, if you build it, they will come, Induced demand, intermodal, invention of the wheel, lake wobegon effect, Lewis Mumford, Loma Prieta earthquake, longitudinal study, Lyft, Masdar, megacity, meta-analysis, moral hazard, Nate Silver, oil shock, parking minimums, Productivity paradox, Ralph Nader, rent control, ride hailing / ride sharing, Rosa Parks, scientific management, self-driving car, skinny streets, smart cities, smart grid, smart transportation, TED Talk, the built environment, the map is not the territory, transportation-network company, Uber and Lyft, Uber for X, uber lyft, Unsafe at Any Speed, urban decay, urban planning, urban renewal, walkable city, Wall-E, white flight, white picket fence, Works Progress Administration, Yogi Berra, Zipcar

The gas crises were the only times I had seen traffic volumes go down significantly in my long career until 2005 or so. It wasn’t the cost of gas that was keeping drivers out of their cars; it was the difficulty of getting gas. We made this observation after the supply crisis was over, when even though prices surged, VMT started rising again. The purpose for reminding ourselves about the oil shocks and gas lines is not to make a purely economic argument. The price of filling a tank is, of course, higher today than it was before OPEC started flexing its muscles (and before China and India started putting millions of new cars on the road, thus increasing demand for a shrinking resource like petroleum).

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In 1920, the height of the popularity of the Model T, gas cost 20 cents a gallon, which is equivalent to $3.87 in 2015. Gas prices go up, and they go down. More important than the inflation-corrected price per gallon is how drivers thought about the cost of a fill-up. And repairs. And insurance. And traffic jams. From the second oil shock on, their daily commute and weekly fill-up gave them more and more reasons to be annoyed about tradeoffs demanded by the six- or eight-cylinder money pits taking up space in their suburban garages. By 2004, economists were calculating that what they called the commuting effect (an increase of about twenty minutes in commuting time daily) was about as costly, in emotional terms, as breaking up with a boyfriend or girlfriend.

Food and Fuel: Solutions for the Future by Andrew Heintzman, Evan Solomon, Eric Schlosser

agricultural Revolution, Berlin Wall, big-box store, California energy crisis, clean water, Community Supported Agriculture, corporate social responsibility, David Brooks, deindustrialization, distributed generation, electricity market, energy security, Exxon Valdez, flex fuel, full employment, half of the world's population has never made a phone call, hydrogen economy, Kickstarter, land reform, megaproject, microcredit, Negawatt, Nelson Mandela, oil shale / tar sands, oil shock, peak oil, precautionary principle, RAND corporation, risk tolerance, Silicon Valley, social contagion, statistical model, Tragedy of the Commons, Upton Sinclair, uranium enrichment, vertical integration

Ordinary people are able to implement efficiency long before big, slow, centralized plants can be built, let alone paid for. Since Western economies ceased to think that oil was infinite and reliably available, more efficient use has been the biggest “source” of new energy — not oil, gas, coal, or nuclear power. After the 1979 oil shock, efficient use of energy enabled Americans to cut oil consumption by 15 percent in six years while the economy grew 16 percent. There are many ways to measure progress in saving energy but even by the broadest and crudest measure — lower primary energy consumption per dollar of real GDP — progress has been dramatic.

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For the two preceding decades energy demand had indeed been growing rapidly, fueled by low oil prices and the post-war economic expansion. For many of the megaproject proponents, the link between growth in energy use and growth in the GDP seemed not only strong historically but inflexible and essential. Of course new supply projects would be needed! Then in 1973 came the first oil shock. With little warning the Arab oil producers embargoed the United States for some months, and the Organization of Petroleum Exporting Countries (OPEC) declared they would no longer negotiate but would instead adopt a take-it-or-leave-it approach to oil pricing. By the end of 1974 the price of a barrel of oil was eight times higher than it had been five years earlier.1 The resulting impacts shocked the Western world, both economically and politically.

When the Money Runs Out: The End of Western Affluence by Stephen D. King

Alan Greenspan, Albert Einstein, Apollo 11, Asian financial crisis, asset-backed security, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Madoff, bond market vigilante , British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, currency risk, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, Ford Model T, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, junk bonds, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, low interest rates, market clearing, mass immigration, Minsky moment, moral hazard, mortgage debt, Neil Armstrong, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, risk free rate, Savings and loan crisis, seminal paper, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

Even during the deepest recessions, however, there was always the hope of subsequent recovery. Long-term economic growth was supposedly God-given. Recessions were merely annoying interruptions, blamed variously on policy-making incompetence, excessive union power, short-sighted financial institutions, lazy managers and nasty oil shocks. Our modern era of economic stagnation is a fundamentally different proposition. Many of the factors that led to such scintillating rates of economic expansion in the Western world in earlier decades are no longer working their magic: the forces of globalization are in retreat, the boomers are ageing, women are thankfully better represented in the workforce,3 wages are being squeezed as competition from the emerging superpowers hots up and, as those superpowers demand a bigger share of the world's scarce resources, Westerners are forced to pay more for food and energy.

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A home bias within the eurozone would remove, at a stroke, the benefits of the single market and likely condemn the southern nations to decades of grinding economic adjustment. That, surely, would be politically unsustainable. In time, and making up for lost ground, maybe money will be recycled into risky ventures in hitherto untapped parts of the world economy. Following the first oil shock in 1973, the money earned by Arab nations eventually found its way via the US banking system to Latin America. Yet Latin America was unable to deal with the scale of capital inflows. Poorly invested, they eventually paved the way to the Latin American debt crisis between 1982 and 1984. Hunting for yield is all very well but, without a proper understanding of the associated risk, unsustainable financial bubbles too often become an unfortunate way of life.

Net Zero: How We Stop Causing Climate Change by Dieter Helm

3D printing, autonomous vehicles, Berlin Wall, biodiversity loss, blockchain, Boris Johnson, carbon credits, carbon footprint, carbon tax, clean water, congestion charging, coronavirus, COVID-19, CRISPR, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, electricity market, Extinction Rebellion, fixed income, food miles, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Great Leap Forward, green new deal, Greta Thunberg, Haber-Bosch Process, high-speed rail, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jevons paradox, lockdown, market design, means of production, microplastics / micro fibres, North Sea oil, ocean acidification, off grid, off-the-grid, oil shale / tar sands, oil shock, peak oil, planetary scale, precautionary principle, price mechanism, quantitative easing, remote working, reshoring, rewilding, Ronald Reagan, smart meter, South China Sea, sovereign wealth fund, statistical model, systems thinking, Thomas Malthus

The sheer scale of Chinese economic growth is unprecedented: nothing on this scale – or that of the environmental shock it has created – has happened before over such a short period of time. Only the Covid-19 outbreak has been able to make a serious dent, causing the economy to contract after decades of growth. Think back to 1979. Most of the world’s attention was on the Iranian revolution and the oil shock it produced. Nobody gave much thought to the impoverished Chinese communist country oppressed since 1949 by Chairman Mao. The Great Leap Forward (1958–62) and the Cultural Revolution (1966–76) left around 70 million Chinese dead from famine and the intellectual class decimated. China was a poor country, insignificant except for its nuclear weapons and its challenge to Russia for communist leadership.

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In a normal competitive market, the cheapest reserves would be produced first. In this market, the Saudis in particular choose not to do this to their full potential capacity. As the price is credibly kept well above $5 a barrel, other supplies come into the market which would not otherwise be produced. The North Sea oil and gas industry developed because of the oil shocks in the 1970s, with much higher costs than in the Middle East. So too did Alaska, the offshore Gulf of Mexico, and eventually even the tar sands of Alberta in Canada could turn a profit at the higher prices. These high-cost producers need the Saudis and others to manipulate the market to keep the price up.

Roller-Coaster: Europe, 1950-2017 by Ian Kershaw

airport security, anti-communist, Apollo 11, Ayatollah Khomeini, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business cycle, centre right, colonial rule, cuban missile crisis, deindustrialization, Deng Xiaoping, Donald Trump, European colonialism, eurozone crisis, Exxon Valdez, failed state, Fall of the Berlin Wall, falling living standards, feminist movement, first-past-the-post, fixed income, floating exchange rates, foreign exchange controls, Francis Fukuyama: the end of history, full employment, Herbert Marcuse, illegal immigration, income inequality, Jeremy Corbyn, Johann Wolfgang von Goethe, labour market flexibility, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liberation theology, low interest rates, low skilled workers, mass immigration, means of production, Mikhail Gorbachev, mutually assured destruction, Neil Armstrong, Nelson Mandela, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open borders, post-war consensus, precariat, price stability, public intellectual, quantitative easing, race to the bottom, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Sinatra Doctrine, Suez crisis 1956, The Chicago School, trade liberalization, union organizing, upwardly mobile, washing machines reduced drudgery, Washington Consensus, Winter of Discontent, young professional

A policy of stimulating growth through reductions in taxation had meanwhile been introduced. Although the rate of growth sharply (and temporarily) rose, the boom merely added fuel to the flames of inflation, which the government then vainly sought to control by imposing limits on wage rises. And all this was before the oil shock. The gathering crisis in industrial relations, as the economy reeled from the impact of soaring energy prices, came to a head in 1974 after the National Union of Mineworkers – the most powerful trade union in the country – had demanded a big pay rise, well in excess of the wage restriction recently introduced by the Conservative government.

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The governments of Western Europe’s other two biggest industrial nations, West Germany and France, navigated the economic storm-waves with fewer traumas than did either Britain or Italy. They faced similar economic problems as energy prices soared. But they handled them better. They benefited from strong economies that could cushion the worst of the oil shock. Their governments were also under highly competent new management. Helmut Schmidt succeeded Willy Brandt as Chancellor of West Germany on 16 May 1974 following the revelation that one of Brandt’s closest aides, Günter Guillaume, had been spying for the East German intelligence services. Only three days later, Valéry Giscard d’Estaing, head of the centre-right Independent Republicans, narrowly defeated François Mitterrand in the French presidential election.

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So the tripling of inflation rates to over 6 per cent per annum by the mid-1970s, if low by the standards of neighbouring countries, was a cause of anxiety. In West Germany, as elsewhere, there was no agreed recipe for dealing with ‘stagflation’. But if no new economic model was plainly in view, it was clear that the old Keynesian solutions were out of date. The second oil shock of 1979 was more damaging to the West German economy than the first, of 1973, had been. Economic growth slumped to only 1.9 per cent in 1980, minus 0.2 per cent in 1981 and minus 1.1 per cent in 1982. Unemployment reached post-war record levels – two million by 1983 (nearly a tenth of the workforce).

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Black Swan, Bob Litterman, bond market vigilante , book value, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, carbon credits, Carmen Reinhart, central bank independence, classic study, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, deal flow, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global macro, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, inverted yield curve, invisible hand, John Bogle, junk bonds, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, pension time bomb, performance metric, Phillips curve, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, savings glut, search costs, selection bias, seminal paper, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stock buybacks, stocks for the long run, survivorship bias, systematic trading, tail risk, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

Inflation expectations were insufficiently adaptive: investors should have looked more at the most recent year’s inflation than the past decade’s inflation when setting expectations:• It seems harsh and hindsighted to call this irrational, given that the inflation process was changing dramatically. If we recognize that inflation expectations in the 1970s and 1980s evolved amidst almost unprecedented structural uncertainty (the end of Bretton Woods, oil shocks, and other wrenching changes), rational learning models may be relevant. In a regime shift context, people may have adjusted too slowly to the probability of being in a high-inflation or low-inflation regime. • A few decades earlier, price stability was the long-run norm (zero inflation expectations and little persistence in annual inflation rates); by the 1970s, the level of and uncertainty regarding inflation were rising and so was its persistence; the inflation rate (as opposed to the price level) became close to a random walk.

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., wars (Korea and Vietnam) again coincided with rising fiscal deficits and rising inflation; aggressive demand man-agement and insufficient understanding of expectations also contributed. After the Bretton Woods regime (a quasi gold standard) collapsed in 1971, the major economies were clearly in a fiat money regime and inflation expectations became further unanchored. The two 1970s’ oil shocks coincided with productivity decline, while the Fed’s overestimation of trend output and therefore slack in the economy resulted in overly loose monetary policy, contributing to the Great Inflation. Under Paul Volcker’s leadership, which began in 1979, the Fed finally ended and reversed the decades-long uptrend in inflation—at the cost of deep recessions in 1980–1982.

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Capitalism, democracy, the rule of law, deregulation, and market-friendly economic policies gained ground across the globe over almost the entire period. No wonder market optimism was rife but, as we know, all did not end well. In contrast, the preceding period involved an increasing role for the state and doubts about capitalism, a shift to fiat currencies, two oil shocks, rising inflation and economic volatility, declining productivity, falling asset valuations, and relatively low realized asset returns. This period of mostly bad news did not last the full 20 years from 1968 to 1987, but essentially came to an end in the summer of 1982 when the massive 1980s’ bull market began.

The Bin Ladens: An Arabian Family in the American Century by Steve Coll

American ideology, anti-communist, Berlin Wall, Boeing 747, borderless world, Boycotts of Israel, British Empire, business climate, colonial rule, Donald Trump, European colonialism, Fall of the Berlin Wall, financial independence, forensic accounting, global village, haute couture, high-speed rail, independent contractor, intangible asset, Iridium satellite, Khyber Pass, Korean Air Lines Flight 007, low earth orbit, margin call, Mount Scopus, new economy, offshore financial centre, oil shock, Oscar Wyatt, RAND corporation, Ronald Reagan, Saturday Night Live, Silicon Valley, Silicon Valley startup, urban planning, Yogi Berra

Yet within two decades, by the time this generation of Bin Ladens became young adults, they found themselves bombarded by Western-influenced ideas about individual choice, by gleaming new shopping malls and international fashion brands, by Hollywood movies and alcohol and changing sexual mores—a dizzying world that was theirs for the taking, since they each received annual dividends that started in the hundreds of thousands of dollars. These Bin Ladens, like other privileged Saudis who came of age during the oil shock decade of the 1970s, became Arabian pioneers in the era of globalization. The Bin Ladens were the first private Saudis to own airplanes, and in business and family life alike, they devoured early on the technologies of global integration. It is hardly an accident that Osama’s first major tactical innovation as a terrorist involved his creative use of a satellite telephone.

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Bakr spoke some French, but he conducted most of his business in English or in Arabic, and he kept private secretaries to assist him in each language; over the course of a typical day, he would slip frequently and easily between the two tongues. In this he resembled many younger, privileged Saudis who had adapted rapidly to global business idioms in the aftermath of the oil shock. In some respects, he was unprepared for the leadership role he now occupied. As an engineer and an operations man, as Salem’s loyal number two, he had learned to work hard and to concentrate on results, but he lacked a natural touch for the richly diverse human foibles and quandaries that his family members continually presented him.

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First-and second-generation Lebanese and Armenian entrepreneurs maneuvered among them—builders, restaurateurs, retailers, developers, and hustlers sui generis. Some blocks on the west side of Los Angeles already resembled a stucco-and-Spanish-tile bazaar when the Saudis turned up in numbers, their pockets bulging after the second oil shock. Young merchant scions from Jeddah and Riyadh and Dhahran rolled through Beverly Hills in Porsches and Mercedes-Benzes, their sunglasses just a little too fashionable, their aftershave a little too pungent—as conspicuous a population of marks as ever swam in the seas of capitalism. Accountants looked at them and saw fees; lawyers saw billable hours; stockbrokers saw commissions; jewelers saw gold.

The Unwinding: An Inner History of the New America by George Packer

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Apple's 1984 Super Bowl advert, bank run, Bear Stearns, big-box store, citizen journalism, clean tech, collateralized debt obligation, collective bargaining, company town, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, DeepMind, deindustrialization, diversified portfolio, East Village, El Camino Real, electricity market, Elon Musk, Fairchild Semiconductor, family office, financial engineering, financial independence, financial innovation, fixed income, Flash crash, food desert, gentrification, Glass-Steagall Act, global macro, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, high-speed rail, housing crisis, income inequality, independent contractor, informal economy, intentional community, Jane Jacobs, Larry Ellison, life extension, Long Term Capital Management, low skilled workers, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, market fundamentalism, Maui Hawaii, Max Levchin, Menlo Park, military-industrial complex, Neal Stephenson, Neil Kinnock, new economy, New Journalism, obamacare, Occupy movement, off-the-grid, oil shock, PalmPilot, Patri Friedman, paypal mafia, peak oil, Peter Thiel, Ponzi scheme, proprietary trading, public intellectual, Richard Florida, Robert Bork, Ronald Reagan, Ronald Reagan: Tear down this wall, Savings and loan crisis, shareholder value, side project, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, smart grid, Snow Crash, Steve Jobs, strikebreaker, tech worker, The Death and Life of Great American Cities, the scientific method, too big to fail, union organizing, uptick rule, urban planning, vertical integration, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, white picket fence, zero-sum game

Although he had a younger brother, he was a lonely boy, almost without friends until he approached his teens, lonely and inward in the way of the extremely gifted. By the age of five he knew the names of all the countries and could draw the world map from memory. When he was six, his father got a job with a uranium mining company—it was just after the 1973 oil shock, when America seemed to be headed toward nuclear energy—and the Thiels spent two and a half years in South Africa and South-West Africa, under apartheid. Peter began to play chess with his parents and quickly mastered it. In Swakopmund, a little German town on the coast of South-West Africa, he spent hours making up adventures for himself in the dried-up riverbed facing the desert sand dunes behind their house, or reading atlases, nature books, and French comics in the local bookstore.

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But Thiel’s pessimism also led him to form radical new ideas about the future. 2008 BAM SLAMS HILLARY IN HISTORIC VICTORY He’s First Black to Win Iowa Caucus as Voters Embrace Message of Change … REAL ESTATE APPRAISED: FROM MALAISE TO CRITICAL … GM POSTS RECORD US AUTOMOTIVE LOSS OF $38.7B FOR 2007 Offers Buyouts to 74,000 US Workers … OIL SHOCK: ANALYST PREDICTS $7 GAS, “MASS EXODUS” OF US CARS … DEPRESSION QUESTIONS RETURN IN NEW CENTURY … IN WEEK OF IRAQ WAR ANNIVERSARY, OBAMA’S RACE SPEECH DOMINATED MEDIA COVERAGE … Obama’s entire campaign is built on class warfare and human envy. The “change” he peddles is not new. We’ve seen it before.

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If a sort of unwinding was happening in America, status markers became weirdly problematic—in a screwed-up society, they could not be the correct, real things. Almost nothing that had high status was a good thing to invest in. After the global financial crisis, Thiel developed a theory about the past and the future. It went back to 1973—“the last year of the fifties.” That was the year of the oil shock, the year when median wages in America began to stagnate. The seventies was the decade when things started going wrong. A lot of institutions stopped working. Science and technology stopped progressing, the growth model broke down, government no longer worked as well as in the past, middle-class life started to fray.

Strange Rebels: 1979 and the Birth of the 21st Century by Christian Caryl

Alvin Toffler, anti-communist, Ayatollah Khomeini, Berlin Wall, Boeing 747, Bretton Woods, British Empire, colonial rule, Deng Xiaoping, disinformation, export processing zone, financial deregulation, financial independence, friendly fire, full employment, Future Shock, Great Leap Forward, household responsibility system, income inequality, industrial robot, Internet Archive, Kickstarter, land reform, land tenure, Les Trente Glorieuses, liberal capitalism, liberation theology, Mahatma Gandhi, means of production, Mikhail Gorbachev, Mohammed Bouazizi, Mont Pelerin Society, Neil Kinnock, new economy, New Urbanism, oil shock, open borders, open economy, Pearl River Delta, plutocrats, price stability, rent control, road to serfdom, Ronald Reagan, Shenzhen special economic zone , single-payer health, special economic zone, The Chicago School, union organizing, upwardly mobile, Winter of Discontent, Xiaogang Anhui farmers, Yom Kippur War

Macroeconomic orthodoxy held that inflation tended to stimulate economic activity, so slow growth and high unemployment were assumed to be at odds with high price levels. Central banks in the United States, Europe, and Japan jointly cut interest rates, desperately hoping to stimulate a recovery. But nothing happened. Investment and employment failed to respond—yet inflation, already high before the “oil shock,” now began to climb. “Stagflation,” as this new phenomenon was called, defied all expert prognoses. The experts in Washington, and in the other capitals of the Western world, no longer appeared as the guarantors of prosperity. In some ways, the first energy crisis merely exacerbated shifts that were already under way.

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The postwar consensus endured because it worked—at least for the first few decades. The British economy grew steadily through the 1950s and 1960s, widely spreading the benefits of expanding national wealth. But by the 1970s, the bloom was off. Rising global competition had revealed the structural rigidities of Britain’s social-democratic system. The oil shock hit at a moment when traditional British manufacturing industries were already affected by painful decline. Once-proud working-class cities had turned into landscapes of blight, factory ruins defaced with graffiti. In the 1970s, the British economy tottered from one crisis to another. In 1974, in the wake of the Arab oil embargo, Conservative prime minister Edward Heath was forced to introduce electricity rationing and a three-day workweek.

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Something always seemed to get in the way: the resistance of the unions, the global economic climate, the accustomed way of doing things. The old ideas no longer worked—that much was clear. But where were the new ones? Britain was waiting for something to give. There were, of course, countries that benefited from the oil shock. First and foremost among them was the Imperial State of Iran, one of America’s key Cold War allies in the Middle East. Nevertheless, the shah of Iran, Mohammad Reza Pahlavi, welcomed the cash that poured into his coffers as a result of the OPEC embargo. He had ambitious plans for the remaking of Iranian society, and changes on the scale he envisioned certainly did not come cheap.

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, bank run, banking crisis, Bear Stearns, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, classic study, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, export processing zone, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, Multi Fibre Arrangement, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, precautionary principle, price stability, profit maximization, race to the bottom, regulatory arbitrage, Savings and loan crisis, savings glut, Silicon Valley, special drawing rights, special economic zone, subprime mortgage crisis, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

The Bretton Woods compromise was a roaring success: the industrial countries recovered and became prosperous while most developing nations experienced unprecedented levels of economic growth. The world economy flourished as never before. The Bretton Woods monetary regime eventually proved unsustainable as capital became internationally more mobile and as the oil shocks of the 1970s hit the advanced economies hard. This regime was superseded in the 1980s and 1990s by a more ambitious agenda of economic liberalization and deep integration—an effort to establish what we may call hyperglobalization. Trade agreements now extended beyond their traditional focus on import restrictions and impinged on domestic policies; controls on international capital markets were removed; and developing nations came under severe pressure to open their markets to foreign trade and investment.

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Moreover, the belief system that supported capital controls began to dissolve over the 1970s and was replaced in subsequent decades by an alternative narrative emphasizing the inevitability of liberalization and the benefits of capital mobility. Just as in trade, an agenda of deep integration centered on free capital mobility would replace the Bretton Woods compromise. The 1960s were the heyday of Keynesian ideas on economic management. The oil shocks and the stagflation of the 1970s—which confronted advanced economies with unemployment and inflation together—pushed attention away from Keynes’s focus on demand management to the supply side of the economy. In the traditional Keynesian model, unemployment was the result of too little demand for domestic products; but the simultaneous increase in inflation belied that explanation.

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World by Paul Gilding

"World Economic Forum" Davos, airport security, Alan Greenspan, Albert Einstein, biodiversity loss, Bob Geldof, BRICs, carbon credits, carbon footprint, carbon tax, clean tech, clean water, Climategate, commoditize, corporate social responsibility, creative destruction, data science, decarbonisation, energy security, Exxon Valdez, failed state, fear of failure, geopolitical risk, income inequality, Intergovernmental Panel on Climate Change (IPCC), John Elkington, Joseph Schumpeter, market fundamentalism, mass immigration, Medieval Warm Period, Naomi Klein, negative emissions, Nelson Mandela, new economy, nuclear winter, Ocado, ocean acidification, oil shock, peak oil, Ponzi scheme, precautionary principle, purchasing power parity, retail therapy, Ronald Reagan, shareholder value, systems thinking, The Spirit Level, The Wealth of Nations by Adam Smith, union organizing, University of East Anglia, warehouse automation

Governments and the corporate sector were engaged deeply on these issues, and the public, driven by major climatic events and high-profile campaigners like Al Gore and Tim Flannery, had put the issue at the forefront of public and political debate. So many experts argued we’d turned the corner and would now start to see serious political action. Jorgen was skeptical of that view. He had seen the issue ebb and flow over many decades, from the 1970s oil shock through various peaks of attention in the 1980s and 1990s to the then emerging global financial crisis. He was convinced the world still wasn’t ready for the type of transformational action required to shift the global economy. He mounted a convincing argument, so our conversation moved to when we thought real action was likely to occur and what the science told us about the implications of acting at that stage.

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While it will start with a focus on energy and water it will soon spread to all aspects of the high-carbon economy and then to sustainability more broadly. Some of you are thinking, “Haven’t we heard all this before, several times? Wasn’t the energy revolution going to start in the 1970s with the oil shock and the beginning of the solar revolution? Then oil prices went down and it all went away? Haven’t people been saying ever since that the boom is ‘just around the corner’?” Yes, all true, but this is fundamentally different for a simple reason. Each previous time, the transformation has been driven by economics; fossil-fuel prices went up so alternatives became competitive.

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

air traffic controllers' union, Alan Greenspan, back-to-the-land, Bear Stearns, benefit corporation, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, classic study, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, Glass-Steagall Act, guns versus butter model, high-speed rail, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kickstarter, lake wobegon effect, Long Term Capital Management, low interest rates, market fundamentalism, Martin Wolf, McMansion, medical malpractice, Michael Milken, military-industrial complex, Minsky moment, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, open immigration, Paul Samuelson, plutocrats, price mechanism, price stability, private military company, public intellectual, radical decentralization, Ralph Nader, reserve currency, rising living standards, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, school vouchers, Silicon Valley, single-payer health, Solyndra, South China Sea, statistical model, Steve Jobs, Suez crisis 1956, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War, you are the product

In a similar way, Carter began the process of deregulating the airline, banking, trucking, and telecommunications industries that Reagan later built on as he unraveled the economic base of the Roosevelt social contract. Carter provided a bridge from the age of Roosevelt to the age of Reagan. At the same time, Carter, more than any president since, seemed to understand the geopolitical lesson of the 1970s oil shocks: that the United States had become dangerously dependent on foreign supplies of oil. A year after he became president, Carter proposed a comprehensive multiyear plan for conservation and the development of new energy technologies. He spent most of his political capital trying to convince Congress and the people that (aside from the prevention of nuclear war) energy dependence was “the greatest challenge our country will face during our lifetimes,” as he told the nation in a televised speech on April 18, 1977.

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That high federal deficits always lead to inflation is an economic urban myth. In the modern American experience, there has been virtually no peacetime example of budget deficits triggering inflation and higher interest rates. The last serious bout of U.S. inflation had occurred in the 1970s, and it was driven not by federal deficits but by three separate oil shocks generated by the global oil cartel. The previous episode of inflation resulted from the cost of the Vietnam War added to an economy already at full employment. The episode of inflation before that was fueled by the Korean War, and the one before that was caused by the pent-up demand for consumer goods and the loosening of price controls after World War II.

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen

Alan Greenspan, American ideology, asset allocation, Bear Stearns, behavioural economics, Bernie Madoff, buy and hold, Cass Sunstein, Credit Default Swap, David Brooks, delayed gratification, diversification, diversified portfolio, Donald Trump, Elliott wave, en.wikipedia.org, estate planning, financial engineering, financial innovation, Flash crash, game design, greed is good, high net worth, impulse control, income inequality, index fund, John Bogle, Kevin Roose, London Whale, longitudinal study, low interest rates, Mark Zuckerberg, Mary Meeker, money market fund, mortgage debt, multilevel marketing, oil shock, payday loans, pension reform, Ponzi scheme, post-work, prosperity theology / prosperity gospel / gospel of success, quantitative easing, Ralph Nader, RAND corporation, random walk, Richard Thaler, Ronald Reagan, Saturday Night Live, Stanford marshmallow experiment, stocks for the long run, The 4% rule, too big to fail, transaction costs, Unsafe at Any Speed, upwardly mobile, Vanguard fund, wage slave, women in the workforce, working poor, éminence grise

Julia Child, who arguably did for fine cooking what Porter did for financial advice, is still widely known, while Porter is so forgotten that a mention of her name to anyone under the age of fifty-five will elicit not an opinion about the columnist deemed one of the most important women of the 1970s by Ladies Home Journal, but rather the simple query: “Who?” There isn’t even a single nostalgia-trip clip of this once ubiquitous television presence on YouTube. Sylvia Porter’s descent into oblivion began at the height of her fame. The oil shocks, inflation, unemployment, and overall recessionary environment of the 1970s led to a growing demand for financial and investment information. Porter initially rode the wave, publishing her biggest bestseller Sylvia Porter’s Money Book in 1975. The book featured more than a thousand pages devoted to all things financial, from how to dress appropriately for the office without busting the budget to tips on how to cut your grocery and medical bills.

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In the early 1970s, longtime foreign correspondent Irving R. Levine pioneered the business beat for NBC News, after network honchos dinged his request to cover the State Department. What seemed like an assignment destined to send Levine to career Siberia turned out to be anything but as the economy turned into the defining story of the decade. Through oil shocks, inflation, and job woes, Levine, wearing a trademark bow tie, explained it all in a calm, almost phlegmatic tone. Soon, PBS joined in, picking up Wall Street Week with Louis Rukeyser from a local Maryland affiliate. As for the now-ubiquitous CNBC, its origins are in second-tier Los Angeles UHF television station KWHY.

Trillion Dollar Triage: How Jay Powell and the Fed Battled a President and a Pandemic---And Prevented Economic Disaster by Nick Timiraos

"World Economic Forum" Davos, Alan Greenspan, asset-backed security, banking crisis, Bear Stearns, Bernie Sanders, bitcoin, Black Monday: stock market crash in 1987, Bonfire of the Vanities, break the buck, central bank independence, collapse of Lehman Brothers, collective bargaining, coronavirus, corporate raider, COVID-19, credit crunch, cryptocurrency, Donald Trump, fear index, financial innovation, financial intermediation, full employment, George Akerlof, George Floyd, global pandemic, global supply chain, Greta Thunberg, implied volatility, income inequality, inflation targeting, inverted yield curve, junk bonds, lockdown, Long Term Capital Management, low interest rates, managed futures, margin call, meme stock, money market fund, moral hazard, non-fungible token, oil shock, Phillips curve, price stability, pushing on a string, quantitative easing, Rishi Sunak, risk tolerance, rolodex, Ronald Reagan, Savings and loan crisis, secular stagnation, Skype, social distancing, subprime mortgage crisis, Tesla Model S, too big to fail, unorthodox policies, Y2K, yield curve

Fed governor Dewey Daane later contrasted Burns unfavorably with his predecessor. Martin “was always seeking to strengthen the system to make it work. Burns was always trying to get invited to the White House.”61 Burns’s second term proved as challenging as his first. A bad harvest in 1972 and the oil shock of 1973 drove prices up rapidly, leading to a recession at the end of 1973. As would be expected in a contracting economy, unemployment shot up over the course of 1974. But so did inflation, reaching levels not seen since the immediate postwar era. Normally, central bankers look past one-time price increases from such transitory shocks.

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Miller used an egg timer at committee meetings to keep his colleagues from droning on and posted a sign that said THANK YOU FOR NOT SMOKING. Both proved as ineffective as his monetary policy.63 Inflation was soaring, but rising unemployment made the Fed reluctant to raise rates. Miller’s job grew harder after the second oil shock of the decade, again driven by events in the Middle East. On July 19, 1979, after Carter outlined his measures for dealing with twin energy and economic crises, he sacked his Treasury secretary. Miller would take his place. He called Volcker, who was then president of the New York Fed, and asked him to fly down to see Carter.

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Alan Greenspan, Albert Einstein, algorithmic trading, Andy Kessler, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, BRICs, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, carbon credits, Carl Icahn, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, Daniel Kahneman / Amos Tversky, deal flow, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Dr. Strangelove, Dutch auction, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial engineering, financial independence, financial innovation, financial thriller, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, global reserve currency, Goldman Sachs: Vampire Squid, Goodhart's law, Gordon Gekko, greed is good, Greenspan put, happiness index / gross national happiness, haute cuisine, Herman Kahn, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", job automation, Johann Wolfgang von Goethe, John Bogle, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Michael Milken, Mikhail Gorbachev, Milgram experiment, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, Phillips curve, planned obsolescence, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, Reminiscences of a Stock Operator, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk free rate, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, stock buybacks, survivorship bias, tail risk, Teledyne, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, two and twenty, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game