by Jon S. Strebler
Conventional economic analysis and policies came under more and more assault as the decade of the 1970s progressed. The main problem was increasing demand for goods and services, by consumers and by governments. In the case of the US federal government, it wanted to create a Great Society and also prosecute an expensive war in Vietnam, without increasing taxes too much, as higher taxes tend to cost the tax-raisers their jobs.
1971 saw a Republican president institute a rather un-Republican restriction of free market policies in the form of Nixon’s wage and price freeze, which was a dismal failure. Two years later, OPEC basically tripled the price of oil overnight, over mounting concern over two issues. First, because many OPEC countries were Muslim and didn’t see why they should sell the economic lifeblood (oil) to supporters of their sworn enemy, Israel, at bargain-basement prices. But second, because the US ... Log in or subscribe to continue reading.