The Great Money Binge by George Melloan

Author:George Melloan
Language: eng
Format: epub
Tags: Spending our way to Socialism
Publisher: Threshold Editions
Published: 2009-07-15T00:00:00+00:00

Yet once Carter was in the White House it became clear he had no idea how to lead the nation out of its deepening economic troubles. Lacking a core pillar of ideology, Carter proved to be a micromanager and a constant vacillator.…

For example, in Carter’s first year in office he lobbied for a tax rebate to help the middle class and to stimulate the economy. But in the later years of his presidency he attacked tax cuts as unaffordable. He had pledged to “reform the tax code” but never put forward a coherent plan. The supply-side tax revolution was just getting started, but Jimmy and his incompetent Treasury Secretary Michael Blumenthal did everything they could to block it. The bipartisan Steiger capital gains tax cut of 1978 was denounced by Carter as “a huge tax windfall for millionaires and two bits for the average American.” He declared that the Steiger bill was “the greatest hoax ever perpetrated on the American people.” Blumenthal called the supply-side tax cuts “the millionaires’ relief act.” This was the birth of the Left’s class warfare rhetoric. The bill passed by such huge veto-proof majorities that Carter begrudgingly signed it into law.

One of the hallmarks of the 1970s malaise was the persistent energy shortages. They were caused by two things: the price controls that had discouraged domestic production and the badly weakened U.S. dollar that had sharply raised the price of imported oil.

But Jimmy Carter, under the influence of the limits-to-growth crowd, seemed to think we were suffering a punishment from God when in fact the punishment was being inflicted by Washington. He thought the world was running out of oil, which of course was pure nonsense.

As a result of the wacky measures the Carter administration took to counter this dire but totally fanciful contingency, U.S. oil production fell to 9 million from 11 million barrels a day from 1971 to 1980, mainly because price controls made it unprofitable to employ advanced methods of exploration and development. Oil imports rose sharply during the 1970s, flooding the banks with “petrodollars” owned mainly by Arab oil sheiks.

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