Glorious 1980 Returns As Oil Nears $100
If you're freaked out over oil topping $90 a barrel for the first time in history, maybe this will add some depressing historical perspective: Oil topped $100 per barrel at another grim point in U.S. history when George Bush was first running for president and America's imperial troubles in Iran and Iraq threatened our precious oil supply from the Persian Gulf -- in 1980!
When the Iran vs. Iraq War began in April of that wretched year, panicked traders quickly brought oil prices over $38 per barrel for the first time; that's $101.70 in today's worthless dollars. The United States had already gone through two "energy crises" in the 1970s, thanks to a 1973 Arab/OPEC embargo against the Great Satan (America) and the 1979 Iranian Revolution against the Shah, who was installed as dictator in a CIA counter-coup after the American/British coup against beloved prime minister Dr. Mohammad Mossadegh, who got the West's attention when he nationalized the Anglo-Iranian Oil Company. So, just as today's traders fear a Turkish invasion of Kurdistan or a Russian takeover of Iran's oil supply or god knows what kind of mideast oil horror, traders in 1980 figured there was going to be a lot less of that nice oil coming to America.
It was a great time to be alive. Inflation hit 13.5% that year, and unemployment was at 7.7%. America's big cities were cesspools of horror. The Number One song of 1980 was "Lady," by Kenny Rogers.
Reagan/Bush rolled into the White House eight months later and fixed up everything, as the worst recession since the Great Depression ravaged the nation. After just a year in office, the Reagan/Bush administration brought unemployment up to an astonishing 11% while interest rates topped 21%. More than 40 U.S. banks had collapsed by mid-1982, another post-Great Depression record. The steel and automobile industries began a decline from which they would never recover, and more than 17,000 U.S. businesses failed. Massive cuts in social services dumped more than a million homeless people on the streets, from poor people who lost their housing when HUD's budget was slashed by two-thirds to the hopeless armies of the crazy forced out of federally-funded mental institutions.
The Number One song was "Physical," by Olivia Newton John.
Think Oil Is Expensive? [CNBC]
Roll Out the $100 Barrel? [The Economist]