Energy Costs as a Share of Spending

From Spencer of Angry Bear:

Comments

[John Emerson]

That's pretty dramatic. The first thing I thought, being the person I am, is that someone **really** didn't want Carter to be re-elected President. (I also believe that Reagan made some kind of deal with Khomeini before the election, and that Iran-Contra was a late stage of that deal.)

The steep climb was in 1979, whereas the OPEC embargo was 1973, so that can't be the primary reason.

However, as we know, conspiracies are always too complicated to pull off, and as a result there has never been a conspiracy in human history, and only fucking loonies ever talk about them.

[Ken Houghton]

"I also believe that Reagan made some kind of deal with Khomeini before the election, and that Iran-Contra was a late stage of that deal."

Well, that part is documented, so it's good that you believe it.

I'm inclined to look at graphics such as this one and conclude that all the b.s. about "the Great Moderation" is really b.s. It seems more that aging economists decided that the mid-1970s was the rule, not the exception, and that the story of the mid-1970s wasn't a matter so much of inflation as a reduction in consumer surplus in energy costs.

[christofay]

The S&P 500 like American wages hasn't increased for 10 years. It's treading flat. What about the equity premium? Please don't back to the gilded age to show how it grows.

[Neal]

North Sea oil rescued us the last time--where is the next big find???

Cheap oil--gone forever.

[effay]

I want to say there was another round of supply cuts in 1979 that, along with the hostage crisis, led to the spike. Could be wrong though.