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Revisionist History

The effort to canonize Ronald Reagan never ends. No matter how much history has to be twisted, the “miracles” never stop.

Tonight on All Things Considered, Benjamin Zycher explains how Ronnie saved the world during the last energy crisis without a nasty windfall profits tax.

Ben’s version omits the real actions that left us in better shape than we had been in some time. Jimmy Carter explained the problem and proposed a solution in a 1977 speech.

A series of things begun by Carter [55mph speed limit, Energy Star appliances, tax credits for renewable energy, and energy conservation] pulled us back from the brink and help to reduce the consumption of oil which brought down the price. If Reagan and the Bushies had continued the programs, we wouldn’t be hurting like we are.

A point I would like to make absolutely clear is that the Organization of Petroleum Exporting Countries [OPEC] is a cartel, and they significantly influence the oil market, i.e. it is not a free market, so free market solutions don’t work.

If the oil companies find new sources of oil, the price of crude oil drops. If the oil companies build new refineries, the profits on refined products drop. Where is the economic reason for oil companies to spend money to reduce their profit margins?

Update: Mustang Bobby corrected me, it was “Tricky Dick” Nixon who imposed the “double nickel” on the US. Nixon was also behind the Department of Energy and the Strategic Petroleum Reserve.

2 comments

1 Mustang Bobby { 04.29.06 at 5:05 pm }

The 55-mph speed limit came in under the Nixon administration as a part of the energy-saving plan after the first oil embargo in 1973-74. That was what led to the CB radio craze at the time for cross-country truckers (remember “Convoy”?) and people like me who liked to speed. It also led to an experiment with year-round daylight savings time that lasted a couple of years. Carter’s programs were more practical and longer-term. So far these cats can’t come up with anything that would inflict a hardship on the oil companies, so I guess the idea of curing our “addiction” is to make the peddlers richer…

2 Bryan { 04.29.06 at 7:49 pm }

Thanks for the correction, Bobby, I plead señor moment, or something.

When you look at the situation in Florida, solar makes a lot of sense. The major use is for air conditioning during the day. Having the extra available at exactly the time when it’s needed really makes economic sense, but they’d rather use coal on barges.

Have fun at the Inge Festival.