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Those two things are coincidences, not any sort of causality. The US had implemented price controls which affected the fundamental interaction of the demand an
by MR4D 7y ago
Those two things are coincidences, not any sort of causality.
The US had implemented price controls which affected the fundamental interaction of the demand and supply curves.
Had the US let the price float, the price would have risen (probably considerably), and the country would have gone into recession. Upon which, the price for oil would have fallen, and things would have gotten back to normal.
Instead, the 1970's is a story full of price controls and the impact they have not just on the economy, but on the psyche as well (hint: look up "malaise" and Jimmy Carter).
- ceejayoz 7y agohttps://en.wikipedia.org/wiki/1979_oil_crisis https://en.wikipedia.org/wiki/1979_oil_crisis > The 1979 (or second) oil crisis or oil shock occurred in the world due to decreased oil output in the wake of the Iranian Revolution. Claiming they're coincidences is silly.
- WalterBright 7y agoNot really. Events in Iran couldn't possibly cause a simultaneous glut in Florida and long gas lines in California. Besides, there have been many "oil shocks" since. Things like several major wars in the mideast, refineries in the US burning down, etc. Not a single gas line resulted. Also, when Reagan repealed the price controls, the Saudi oil cartel promptly collapsed. I remember that day. The gas lines disappeared LITERALLY OVERNIGHT and never returned.
- WalterBright 7y agoMost accounts neglect to mention the allocation controls. Allocation controls meant bureaucrats in the DOE decided what each gas station got. Naturally, this was a hopeless mess.