Trump’s Iran speech ignores risks of a return to the 1970s

“The hard part is done,” President Donald Trump said in his address to the nation on the Iran war Wednesday night. He said the recent increase in gas prices was a “short-term increase” and would “return quickly” when the vital Strait of Hormuz reopens.

But there is reason to worry that the conflict and its economic consequences for Americans could get worse before they get better. If so, Trump will struggle to shake off the damaging political legacy of the war.

In doing so, he will join a long line of US presidents dating back to the 1970s, whose tenures were defined by the energy crisis and inflation (economic scourges that Trump has called “nation-destroying”).

“The oil shock of the ’70s was perhaps hardwired into the subterranean part of our brains,” said presidential historian Jay Hakes, who ran the U.S. Energy Information Administration in the 1990s during the Clinton administration.

“It’s been there for a long time because it was such a shakeup. And I think this is going to be that kind of shakeup,” Hakes said.

Gasoline prices on Tuesday rose above $4 per gallon on average for the first time since the war began. gas followed Brent crude oil prices It rose 27 percent to just over $100 a barrel on Wednesday, up 27 percent since the war began. Oil tankers and other commercial ships that would normally pass through the narrow Strait of Hormuz off Iran’s southern coast have been stopped due to Iranian threats and attacks. The waterway normally carries 20% of the world’s oil.

But $4 a gallon gas, painful as it may be, may be just the tip of the iceberg. For now, this situation is clearer in the rest of the world than in the United States. The UK will receive its last shipment of jet fuel for the foreseeable future this week. According to Platts data published by the International Air Transport Association, jet fuel prices increased by 96 percent worldwide. Liquid natural gas futures contracts in Japan and South Korea rose 43%, according to FactSet data.

Asia, and to a lesser extent Europe, are more quickly exposed to supply disruptions from the Strait of Hormuz. Unlike the US – as Trump has repeatedly stated – they buy directly from the Middle East. But all of these commodities are connected through global markets. Disruptions in one part of the world will quickly spread to others. Analysts fear the price of oil will rise above the record of around $150 per barrel set in July 2008 during the Great Recession.

So far, the world has benefited from energy sources that were already in transition when the war began a month or so ago, aided by emergency releases from strategic oil reserves. But the world is consuming these materials.

“Even with the modest estimates we have now, the oil loss in April will be twice the oil loss in March,” International Energy Agency Executive Director Fatih Birol said. he said. podcast Released Wednesday.

Governments around the world are trying to encourage energy conservation in the face of the crisis. A viewer show from the IEA 26 governments took steps Like Pakistan lowering the speed limit.

Trump has taken steps to encourage the market to improve supply but has refrained from calling on Americans to save energy. Doing so could lead to uncomfortable comparisons with President Jimmy Carter’s initiatives after the 1979 crisis that began with the Iranian Revolution. Ronald Reagan turned Carter’s calls for consumers to exercise self-restraint into a powerful political weapon and won him the presidency the next year.

And Trump spent part of his term in the White House calling for limits on construction and subsidies for renewable energy production.

Energy policies have harmed the nation. “We have lost the ability to ask the American people to make sacrifices,” Hakes said.

Before Carter, presidents, including Republicans, called for shared sacrifice. President Richard Nixon proposed a national speed limit of 55 miles per hour following the Arab Oil Embargo in 1973, Hakes said. That limit became law the following year, but even before that, Nixon was urging people to slow down, and “they slowed down,” Hakes said.

“We still had a little bit of a World War II mentality,” Hakes said.

The energy crises of the 1970s put the nail in the coffin of this mentality. Nixon and Carter had difficulty lowering prices, and inflation soared. To combat inflation, Carter appointed Paul Volcker as chairman of the Federal Reserve; And it eventually did, but by raising interest rates high enough to cause a recession, followed by record-high mortgage rates. Carter, of course, was not re-elected.

Americans’ understanding of what government can and should do has changed permanently.

“The failure of the nation’s politicians to address the energy crisis contributed to the erosion of Americans’ faith in their government to solve problems,” wrote Princeton University historian Meg Jacobs in her book “Panic at the Pump: The Energy Crisis and the Transformation of American Politics in the 1970s.”

“If the Vietnam war and the Watergate scandal taught Americans that their presidents lied, the energy crisis showed them that their government was useless,” Jacobs wrote.

Trump’s claim as president today is that the government will only work when he is in charge. “Nobody knows the system better than me, so I can fix it alone,” he said at the 2016 Republican National Convention. He centralized control of the executive branch in the Oval Office and derived power from cabinet secretaries and agencies that had previously operated autonomously.

Worst-case concerns may not come true. The United States could quickly force Iran to surrender, and the global economy could recover quickly, as it did after the shock of Russia’s invasion of Ukraine. But otherwise Trump’s decision to go to war in Iran could further deepen many Americans’ alienation from the government. And as the sole decision-maker at the top of the federal bureaucracy, Trump will have a hard time convincing the public that everyone but him bears responsibility.