69 million page views

A Little Economics

Reader comment on item: [Saudi Arabia:] Not Friend or Foe

Submitted by Lucas J. Meyer (United States), May 14, 2002 at 13:56

You are, in my view, one of today's great thinkers. Your articles are cogent, closely reasoned and tend to "tell it like it is."

There was, however, one error, in my view, in your last article. To Wit: That the Saudis helped cause the 1973-1975 American economic crisis.

That crisis was brought on by U.S. government-caused inflation. Beginning with Lyndon Johnson's flawed thesis that we could have both guns and butter (the Great Society and the Vietnam War) financed by deficit spending, and ending with Richard Nixon's bullying of then-Fed Chairman Arthur Burns, the United States unleashed a wave of inflation that resulted in both a de facto and a de jure devaluation of the U.S. dollar.

It was because of this devaluation (caused by a huge expansion of the money supply) that the Saudis, as well as other oil producers (remember, oil is priced in dollars) were able to demand higher prices for their oil. True, they exploited our weakness, but theywould have been unable to do so had we not followed a profligate and senseless fiscal and monetary policy.

Very truly yours,

Lucas J. Meyer


Note: Opinions expressed in comments are those of the authors alone and not necessarily those of Daniel Pipes. Original writing only, please. Comments are screened and in some cases edited before posting. Reasoned disagreement is welcome but not comments that are scurrilous, off-topic, commercial, disparaging religions, or otherwise inappropriate. For complete regulations, see the "Guidelines for Reader Comments".

Follow Daniel Pipes

Facebook   Twitter   RSS   Join Mailing List

All materials by Daniel Pipes on this site: © 1968-2024 Daniel Pipes. daniel.pipes@gmail.com and @DanielPipes

Support Daniel Pipes' work with a tax-deductible donation to the Middle East Forum.Daniel J. Pipes

(The MEF is a publicly supported, nonprofit organization under section 501(c)3 of the Internal Revenue Code.

Contributions are tax deductible to the full extent allowed by law. Tax-ID 23-774-9796, approved Apr. 27, 1998.

For more information, view our IRS letter of determination.)