our discussion here on ET in a previous diary of mine

So what really happened in the 70s?

The issue was never one of needing to switch from stimulus spending to tax cuts for the rich, or of needing to care exclusively about inflation and ignore unemployment. People who interpreted the seventies in that fashion misunderstood fatally what was going on. That misunderstanding fuels and feeds their misunderstanding of the present problems.

The use of the words 'misunderstood' and 'misunderstanding' is to me the most problematic aspect of the above quote. I am sure there was a lot of misunderstanding. I have to wonder at the thought that it was all just a big misunderstanding.

I would apply the principle that the law used in the case of 'erroneous' pricing of items in the data from which barcode readers obtained prices at the check stands in California supermarkets in the '90s. The fact was that the errors were always in the direction of the store chains and the chains were required to refund a condiderable amount of money.

Of course my knowledge and memory are far from complete or perfect, so perhaps others can remind me of the times when 'misunderstandings' in economic theory have redounded to the benefit of the average citizen. For the life of me I cannot think of any.

"It is not necessary to have hope in order to persevere."

The only lesson that can be taken from the seventies is that it is a very foolish thing for a state to become dependent on a particular resource or product that it cannot make for itself and must import, because that puts the economic welfare of that state at the mercy of the exporting nations.

The answer to that is Jane Jacobs' analysis of Import Replacement:

Jacobs believed that the best way to achieve such sustainable economies is to examine what is now imported into a region and develop the conditions to produce those goods from local resources with local labor. She referred to this process as "import replacing."

What happened in the 70s provided an opening to move away from imported oil, replacing it with other forms and means of energy production.  This would have required a number of actions all of which where stomped on by TPTB, notably the Big Seven oil companies.  The reasons for the stomp is easy: import replacement restructures the economy, replacing the companies importing the good and the companies relying on the imported good for their profit margins.  


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre