The Energy Crisis and the Coronavirus Crisis - Chesapeake Observer

The Energy Crisis and the Coronavirus Crisis - Chesapeake Observer: There is a remarkable similarity between policy responses to the Arab oil embargo of the 1970s and the way responses to the Chinese coronavirus are developing. Both events were handled by Republican administrations with weak commitments to basic economic principles at their highest levels, that had to cooperate with Democratic majorities in Congress with their own ideas about how to manage markets.

The oil embargo had a very small direct effect on the U.S. economy, and the direct effects of the coronavirus are not likely to be larger. The economic damage resulting from the Arab oil embargo was almost entirely self-inflicted, due to panic and poorly designed policies. Any economic damage from the coronavirus is also much more likely to arise from panic and policy errors than from the disease itself.