Did Reagan really conspire to drop oil prices?

Did Reagan really conspire to drop oil prices?

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Wikipedia says that Ronald Reagan persuaded Saudi Arabia to rise oil production so to drop the prices and make pressure on the Soviet economy. I encountered such claim in many other sources as well.

But if we look at the oil production plot

we can see that in 1982-1988 there was actually a drop in oil production by Saudi Arabia while the USSR had the peak of oil production at the same time. Saudi Arabia increased production only after the production by the USSR dropped in the end of 1980s.

So was not it actually the USSR who dropped the prices, and not Saudi Arabia?

I will stick to the "spirit" of your question, not to the title; I presume that you are interested in contribution of Saudi Arabia versus USSR to the oil crisis, and not in the details of Reagan's personal involvement.

Side note regarding the chart: the chart is not very useful for the purposes of this discussion as it does not show relevant metric. The oil price did not depend on Soviet production, because most of this production was sold at a fixed price (domestic and Eastern bloc supply); being traded outside the market, it could not possibly impact the market price. The oil price was impacted by Soviet export to free-market countries, and of course, by the overall demand. Both values are not shown on the chart. I find this much more enlightening, see page 7.

Back to the point. The same source that backs up said Wikipedia article says "We are certain about the date [… ] September 13, 1985 [… ] in the next 6 months oil production in Saudi Arabia increased dramatically." This increase in production can be seen in your chart, so there is no contradiction here. The oil price dropped between December 1985 and March 1986, and it seems that all sources attribute it to OPEC (which includes Saudi Arabia).

As of the export from USSR to the West (of which oil was the most significant part) I see:

  • when counted in rubles export decreased in 1985 and plummeted in 1986 to never recover, source

  • when counted in barrels actually have risen in 1986, 1987, and 1988; source - page 7

  • when counted in barrels export was approx. 1.5 mbd, which was not very much - Saudi Arabia alone had 4-5 mbd. Ibid. USSR was the major producer but had a minor free-market share.

So it does seem that USSR did not try (did not want? had no capability?) to bring the market price up. This was obviously to their disadvantage.

This is almost more of an economics question.

The thing is, Oil prices at the time had a much more drastic effect on the US economy than the Soviet one, so you don't really have to look outside of US borders for reasons.

Rising Oil prices were almost single-handedly responsible for getting Regan elected. When oil prices go up, the price of everything in the USA rises due to the vast distances involved in shipping things around our continent. This caused a never-before-noticed effect in the USA economy which they had to invent a new word for: stagflation. Normally unemployment and inflation vary inversely to each other. Eg: if a recession happens, people lose jobs, but inflation drops too. During an economic boom, the opposite happens.

However, during the Carter administration there was a big Oil production slowdown, and the result was both inflation and unemployment got worse. The government didn't much know what to do about this, because their typical solution for one would make the other worse.

Regan got elected because of this, so quite sensibly it was a very high priority of his to stop the Oil slowdown. USSR or no, he'd really like to be re-elected.

I know there's a tendency now to grasp whatever straws available to paint Regan as the cunning genius who brought down the USSR. Having lived through it myself (and watched the guy's press conferences and speeches), I'll tell you it was much more like living through a live action Mr. Magoo cartoon. He may still deserve the credit, but the guy was just trying to drive his car…

Ronald Reagan’s Real Legacy

In the course of clearing her throat for an attack on Rick Perry Tuesday night, Michele Bachmann tossed out this now-standard bit of conservative boilerplate:

In the 1980s, Ronald Reagan produced an economic miracle…

It’s probably hopeless to take on the Reagan economic myth at this late date, but honestly, it’s long past time to put it to rest. The truth about the 󈨔s is far more prosaic: In 1979, Jimmy Carter appointed Paul Volcker chairman of the Federal Reserve. Inflation was running at about 12 percent when he took office, and Volcker immediately slammed on the monetary brakes in order to bring it down. Whether he was targeting interest rates or monetary aggregates remains a bit murky, but it hardly matters. In the end, he engineered one minor recession in 1980, and when that didn’t do the trick, he tightened Fed policy even more and threw the economy into a second recession—this one extraordinarily deep and painful—which he maintained until 1982. When he let up, the economy recovered. Reagan had very little to do with it.

But that’s not all. If you’re looking for other reasons that the 1980s were boom years, No. 2 would be oil prices. The American economy is highly sensitive to oil prices, and after peaking at around $100 per barrel during the Iranian revolution (in inflation adjusted terms), oil prices steadily dropped, falling below $30 in 1986 (again, in inflation adjusted terms). This was largely due to (a) reduced demand thanks to the recession (b) reduced demand thanks to CAFE standards and other conservation/efficiency improvements that followed the oil shocks of the 󈨊s (c) increased oil supply from Prudhoe Bay, which peaked in the early 󈨔s and (d) increased oil supply thanks to a Jimmy Carter executive order ending price controls on oil. Again, Ronald Reagan had very little to do with it.

What else? Well there was enormous deficit spending in the early 󈨔s that wasn’t offset by Fed action, and that probably stimulated the economy a bit. That was Reagan’s doing, though it’s not something his fans like to boast about today. And there was the Plaza Accord of 1985, which devalued the dollar and helped spur exports. That was also Reagan’s doing, but again, it’s not something his admirers say much about today, since modern tea party orthodoxy insists that this amounts to “debasing” the dollar. And finally, there are the 1981 tax cuts, which probably had a positive economic effect, but a fairly modest one.

That’s most of the story of the Reagan era. The most important economic drivers of recovery, in rough order of importance, were:

  1. Paul Volcker easing up on interest rates/monetary aggregates in 1982
  2. The steep drop in oil prices after 1981
  3. Reagan’s devaluation of the dollar
  4. Reagan’s deficit spending
  5. Reagan’s tax cuts

Other major Reagan policies were probably a wash. The tax reform act of 1986 was certainly a net positive, but sitting back and allowing the S&L crisis to spin out of control was a big net negative. But those are nits. In the end, although Reagan’s tax legacy is his most celebrated accomplishment, it was distinctly secondary to Fed policy, the oil glut, deficit spending, and a weak dollar. Lowering top marginal rates may or may not have been a great thing to do, but it was no miracle. The truth was far more mundane.

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"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones : You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

1990-92 Early 1990s Recession

The recession of the early 1990s lasted from July 1990 to March 1991. It was the largest recession since that of the early 1980s and contributed to George H.W. Bush's re-election defeat in 1992. Although mainly attributable to the workings of the business cycle and restrictive monetary policy, the 1990-91 recession demonstrated the growing importance of financial markets to the American and world economies.

From November 1982 to July 1990 the U.S. economy experienced robust growth, modest unemployment, and low inflation. The "Reagan boom" rested on shaky foundations, however, and as the 1980s progressed signs of trouble began to mount. On October 19, 1987 stock markets around the world crashed. In the U.S. the Dow Jones Industrial Average lost over 22% of its value. Although the causes of "Black Monday" were complex, many saw the crash as a sign that investors were worried about the inflation that might result from large U.S. budget deficits. The American housing market presented another sign of weakness, as in the second half of the 1980s a large number of savings and loan associations (private banks that specialized in home mortgages) went bankrupt. The collapse of the S&L industry negatively impacted the welfare of many American households and precipitated a large government bailout that placed further strain on the budget.

Although the 1987 stock market crash and the S&L crisis were separate phenomena, they demonstrated the growing importance of financial markets—and associated public and private sector debt—to the workings of the American economy. Other causes of the early 1990s recession included moves by the U.S. Federal Reserve to raise interest rates in the late 1980s and Iraq's invasion of Kuwait in the summer of 1990. The latter drove up the world price of oil, decreased consumer confidence, and exacerbated the downturn that was already underway.

Although the National Bureau of Economic Research has concluded that the early 1990s recession lasted just eight months, conditions improved slowly thereafter, with unemployment reaching almost 8% as late as June 1992. The sluggish recovery was a key factor in George H.W. Bush's defeat for re-election to the U.S. presidency in November 1992.

Mark Carlson, "A Brief History of the 1987 Stock Market Crash with a Discussion of the Federal Reserve Response," Federal Reserve Board, Washington, D.C. (2006): http://www.federalreserve.gov/Pubs/feds/2007/200713/200713pap.pdf

Peter Temin, "The Causes of American Business Cycles: An Essay in Economic Historiography," in Jeffrey C. Fuhrer and Scott Schuh, eds., Beyond Shocks: What Causes Business Cycles? (Federal Reserve Bank of Boston, 1998), 37-59.

Carl Walsh, "What Caused the 1990-1991 Recession?" Economic Review of the Federal Reserve Bank of San Francisco (1993): 34-48: http://www.frbsf.org/publications/economics/review/1993/93-2_34-48.pdf

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Oil Market and Gas Price History by President

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Oil & gas: Do past presidents provide precedent?
As arguably the planet&rsquos most important commodity, the price of oil has downstream impacts for everything from interest rates to equity prices to currency exchange rates. As we approach November 3rd, traders are naturally wondering: How will the 2020 US Presidential Election impact oil and gas prices?

(1) Generally, a president's ability to impact prices is relatively limited.
Broadly speaking, the oil market is global in nature, and therefore, the policies of a single country&rsquos leader (even a country as important for the global economy as the United States) have a limited impact on the planet&rsquos aggregate supply and demand dynamics, despite occasional claims to the contrary.

To take a trite example, no one would accuse former President George W. Bush of being particularly hostile to the oil industry, yet gasoline prices nearly tripled under his watch from a low of $1.45/gallon in early 2001 to $4.05/gallon by June 2008. More commonly, broader economic forces (e.g. the Great Financial Crisis that hit shortly thereafter and drove gas prices back below $2.00/gallon or the COVID-19 Pandemic during President Trump&rsquos first term) are the primary drivers for oil and gas prices.

(2) &ldquoDrilling Down&rdquo on Bush, Obama, and Trump

That said, in some instances domestic and international policies can nudge prices in one direction or another over a period of time, especially when it comes to refined petroleum products such as gasoline. As the chart below shows, the price of gasoline has fluctuated under the last three presidents, with no clear relationship based on party affiliation:

Source: Forbes, Robert Rapier

Looking at the above graph, some would argue that the drop under President Trump heading into 2019 was driven at least partially by President Trump&rsquos aggressive deregulation of energy companies. Similarly, Trump&rsquos international policies encouraging both Saudi Arabia and Iran to export oil over this timeframe may have played a role in temporarily increasing global supply.

Of course, the proverbial &ldquoelephant in the room&rdquo is the ongoing COVID-19 pandemic, which has decimated global demand for oil. Pending any vaccine breakthroughs, the path of the pandemic (and by extension, demand for gasoline and other petroleum products) will at least partially depend on the federal virus containment efforts. As the chart below shows, demand for gasoline in the United States has nearly recovered to its 2019 average of 10M barrels per day:

Source: Bloomberg, Bank of America

(3) Economists vs. everyday citizens: who's side are you on?

When it comes to a President&rsquos perceived influence on oil and gas prices, professional economists and everyday American citizens disagree. For example, according to a recent study quoted by the New York Times, not a single one of 41 economists surveyed agreed with the following statement: "Changes in U.S. gasoline prices over the past 10 years have predominantly been due to market factors rather than U.S. federal economic or energy policies." These economists (correctly in our view) assert that the global supply and demand dynamics are far more important.

In contrast, many Americans believe that the President can control, or at least heavily influence, oil and gas prices. This belief is representative of a more general tendency to attribute too much credit when things go well and too much blame when things go poorly to the current President.

As we&rsquove noted before, the biggest risk for readers is to let politics become too big of a factor in their trading, rather than following a well-developed, objective strategy including proper risk management principles. For help developing your own effective trading strategy for the 2020 Presidential election and beyond, reach out to one of our client support representatives today!

* Please note oil products may not be available to trade in all regions.

Did Reagan really conspire to drop oil prices? - History

&bull Gas prices have gone up under President Joe Biden, continuing an upward trend that began in May 2020.

&bull The increase is largely due to supply and demand, energy experts say, rather than presidential policies.

&bull The coronavirus pandemic prompted a big fall in oil demand and gasoline prices, due to declines in driving and air travel. As the economy has slowly rebounded, growing demand has boosted prices at the pump.

There&rsquos been chatter online recently about the recent spike in gasoline prices &mdash and whether President Joe Biden is to blame.

One Facebook post features a photograph of Biden with the caption, "Gas prices going up? How do you like me now?"

Another Facebook post uses a different picture of Biden and a thinly veiled comparison with former President Donald Trump. "Gas prices are soaring," the caption says. "But thank God there were no offensive tweets this week."

These posts were flagged as part of Facebook&rsquos efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

Concern about rising gasoline prices also reached Fox News, where anchor Bill Hemmer said on March 1, "Gas prices are going higher, and if you don't think that Middle America takes notice of that, think again. We are seeing prices now that we frankly haven't seen in years."

Given the apparent alarm about gas prices, we thought it would be a good time to take a look at where they stand now, how they measure up historically and what&rsquos causing the price movements.

Yes, according to federal data, gas prices have mostly been going up since they bottomed out at $1.87 a gallon in late April 2020. With gas prices reaching $2.72 in late February 2021, that&rsquos an increase of 45% within about 10 months.

Part of that has come on Biden&rsquos watch &mdash prices have risen about 10% since he took office in January 2021. The bulk of the increase came under Trump.

No. Today&rsquos prices are the highest they&rsquove been in about 18 months.

Gas prices were similar to or higher than their current level for much of the time between October 2017 and January 2020 &mdash that is, more than two years of Trump&rsquos presidency. Prices were higher than today for all of the time between March 2018 and November 2018, and all of the time between April 2019 and August 2019.

Gasoline prices have a seasonal component: Demand rises during the summer and falls during the colder months, meaning that summer prices tend to be higher. That pattern is exacerbated by laws requiring more expensive gasoline formulations during the summer in order to limit emissions.

Looking just at winter levels, gasoline prices today are roughly in line with where they were at similar points in the calendar in 2017, 2018, 2019 and 2020, when Trump was in office.

Some critics of Biden have said that his cancellation of the Keystone XL pipeline early in his presidency would quickly result in higher gasoline prices. But we previously found that, for several reasons, that&rsquos not the case.

For starters, the pipeline wasn&rsquot operating yet. "Revoking it does nothing to today&rsquos balance" of supply and demand, said Mark Finley, a fellow at the Center for Energy Studies at Rice University.

Any price impact from the pipeline decision, or from other Biden policies to limit fossil fuels, would be "years down the road," said Patrick De Haan, head of petroleum analysis at GasBuddy, a website that tracks gas prices.

In addition, most of the oil to be carried by the Keystone XL pipeline would have been exported, meaning U.S. customers should see little direct effect on prices.

Experts said it was conceivable that Biden&rsquos policies could eventually affect gas prices. But any impact wouldn&rsquot be detectable in the recent gas price changes.

In general, a president has limited control over the weekly and monthly shifts in gasoline prices. On a short-time horizon, gas prices depend mostly on global supply and demand.

On the supply side, the OPEC oil cartel and Russia have made voluntary production cuts, which has the effect of raising prices, Finley said.

In addition, Finley said, U.S. companies are investing less in finding new sources of oil. This is due to a combination of factors, including low oil prices over the past year, which discourage companies from developing new drilling sites, as well as growing pressure from environmentalists to shift away from fossil fuels.

"Oil companies were hit hard in 2020," De Haan said. "They are not in growth mode. They are in survival mode."

But the biggest factor in the recent price spike has been the slow but steady economic recovery from the coronavirus pandemic.

When the pandemic began in the first quarter of 2020, the price of oil fell off a cliff. That reflected a plunge in demand: The pandemic shut down some major industries for weeks, and sharply curbed the ability of people to travel (in airplanes) and commute to jobs (in cars). Crude oil prices closely track the price at the pump.

What the pandemic took away, however, the recovery has begun to put back.

"The coronavirus numbers in every state are moving in the right direction," De Haan said. "We&rsquore now seeing the highest demand since the pandemic started. And now that demand is up, and oil production is not, that has pushed oil prices up."

It&rsquos hard to say whether Biden deserves credit for the improving coronavirus outlook and economy. But De Haan said you could actually make the opposite argument than the Facebook posts do &mdash that rising gas prices are a positive sign of growing consumer confidence.

"You could argue that the economic outlook has improved under Biden," he said, "providing a dose of optimism among consumers" that has led to rising prices at the pump.

Dismantling Liberal Myths: A Refresher Course on Ronald Reagan

P residential historian H. W. Brands’s new biography of Ronald Reagan and his conclusion that modern American politics is best seen as “The Age of Reagan” has aroused liberals to circulate once again the hoariest myths about the man and his presidency, including the malicious charge that Reagan was deliberately indifferent to the lot of African Americans and other minorities.

Liberal Myth No. 1: Reagan’s dangerously belligerent foreign policy had little to do with the disintegration of Soviet Communism. Mikhail Gorbachev was the leader most responsible for bringing the Cold War to a non-nuclear conclusion.

Reality: In the 1970s, as presidential scholar Kiron Skinner has written, Reagan formulated four key ideas about U.S.–Soviet relations and the Cold War. One, discussion of Soviet expansionism around the world had to precede any talk about arms control, not the reverse. Two, America was an “exceptional” nation obligated to match deeds with words in the promotion of freedom around the world. Three, because the Soviet Union was an “abnormal” nation with no popular base of support, it was prepared to foment global crises to maintain its control. Four, the Soviet Union’s inefficient economy and inferior technology “could not survive competition” with America. Once elected president, Reagan began carrying out a multifaceted victory strategy based on these ideas.

The Cold War ended in triumph for the idea of freedom because of Ronald Reagan, not Mikhail Gorbachev, who as late as 1988 quoted the Communist Manifesto when asked his position on private property.

Reagan ordered an across-the-board buildup of the defense establishment, including land-based weapons, new ships, and new medium-range missiles. He launched a psychological offensive, declaring that the Soviets’ “evil empire” was headed for “the ash heap of history.” He made SDI (the Strategic Defensive Initiative) the cornerstone of the Reagan Doctrine and would not surrender it, even at the Reykjavik summit. He strongly supported anti-Communist forces in Afghanistan, Nicaragua, Angola, and Cambodia.

He carried his crusade for freedom into the disintegrating Soviet empire. Standing before Berlin’s Brandenburg Gate in 1987, he directly challenged the Kremlin, saying, “Mr. Gorbachev, tear down this wall!” A little more than two years later, the wall came down and Communism in Eastern and Central Europe collapsed. Lech Walesa, Nobel laureate and founder of the Polish trade union Solidarity that confronted the Communist regime, said of President Reagan, “We in Poland . . . owe him our liberty.”

Democracy triumphed in the Cold War, Reagan wrote in his autobiography, because it was a battle of ideas — “between one system that gave preeminence to the state and another that gave preeminence to the individual and freedom.” The Cold War ended in triumph for the idea of freedom because of Ronald Reagan, not Mikhail Gorbachev, who as late as 1988 quoted the Communist Manifesto when asked his position on private property.

Liberal Myth No. 2: The Eighties were a decade of greed that benefited only the wealthy and overlooked the middle class.

Reality: Reagan inherited a dangerously weakened economy. High tax rates had severely limited jobs and investment and brought in less than expected government revenue. President Reagan reversed the process by cutting personal tax rates and government regulations, stabilizing the economy and encouraging entrepreneurs.

Following the Economic Recovery Tax Act of 1981, unemployment in the succeeding years fell an estimated 45 percent. During the Eighties, the consumer price index rose only 17 percent, private domestic investment grew 77 percent, and economic growth averaged 4.6 percent annually. The real income of every stratum of Americans increased, and total tax collections rose from $500 billion in 1980 to $1 trillion in 1990 (in constant dollars).

At the same time, Reagan deregulated oil prices, making energy cheaper, and launched U.S.–Canadian free trade, setting the stage for NAFTA (the North American Free Trade Agreement). Perhaps most important of all, he created IRAs (individual retirement accounts) and 401(k) programs, giving birth to what has been called “the investor class.” New industries arose in computing, software, communications, and the Internet that streamlined and transformed the American economy.

Liberal Myth No. 3: The federal government continued to grow and expand under Reagan, who callously tripled the national debt.

Reality: During the Reagan years, overall domestic spending did increase, as the president battled with a Democratic House of Representatives led by a fiercely partisan Speaker Tip O’Neill. Spending on education, social services, medicine, and food almost doubled. However, federal outlays on regional development, commerce, and housing credit decreased by about 22 percent. And the size of the federal civilian workforce declined by about 5 percent, because of conservative managers such as Donald Devine, described by the Washington Post as “Reagan’s terrible swift sword of the civil service.” The annual federal deficit as a share of GDP fell significantly from 6.3 percent in 1983 to 2.9 percent in 1989. As Reagan left office, CBO (the Congressional Budget Office) projected that “deficits were on a path to fall to about 1 percent of GDP” by 1993.

Was it worth $1.72 trillion to build up America’s defenses so that Reagan could end the Cold War at the bargaining table and not on the battlefield? Most Americans would not hesitate to emphatically answer, “Yes!”

The near tripling of the national debt was mostly due to Reagan’s defense spending. In President Carter’s last budget, America spent just under $160 billion on national defense. In 1988, the Reagan administration spent $304 billion, including more than twice as much on military hardware. During his years in office, Reagan expended a total of $1.72 trillion on national defense, an unprecedented amount that he stoutly defended.

Challenged in a cabinet meeting that he “couldn’t spend all of this money on the military” and that it would look bad to boost spending on guns while cutting the butter, Reagan replied: “Look, I am the president of the United States, the commander-in-chief. My primary responsibility is the security of the United States. . . . If we don’t have security, we’ll have no need for social programs.”

The essential question was, “What price peace?” Was it worth $1.72 trillion to build up America’s defenses so that Reagan could end the Cold War at the bargaining table and not on the battlefield? Most Americans would not hesitate to emphatically answer, “Yes!”

If we examine the economic report cards of postwar presidents from Truman through Reagan, according to Harvard economist Robert Barro, Reagan easily finishes first. Using the change each year in inflation, unemployment, interest rates, and growth in gross national product, Reagan ranks first. He engineered the largest reduction in the misery index (inflation plus unemployment) in history — 50 percent. The 1980s, says economist Richard B. McKenzie, were, up to then, “the most prosperous decade in American history.”

Liberal Myth No. 4: Reagan was a cynical, calculating politician who used “states’ rights” to win the 1980 election and paid little attention to African Americans as president.

Reality: The African-American columnist Joseph Perkins has calculated that black unemployment fell from 19.5 percent in 1983 to 11.4 percent in 1989. The income of black-owned businesses rose almost one-third between 1982 and 1987. The black middle class grew from 3.6 million to 4.8 million during the Reagan years, while the cash income of black households (adjusted for inflation) rose by 12 percent. By contrast, the median income of black households fell by 2.2 percent during the Obama years from 2010 to 2013.

Throughout the Seventies, Reagan exhorted fellow Republicans to address the party’s failure to attract black voters. At the 1977 Conservative Political Action Conference, he said, “We [Republicans] believe in treating all Americans as individuals and not as stereotypes or voting blocs.” Speaking to the Urban League in August 1980, after having won the GOP’s presidential nomination, Reagan said, “I am committed to the protection and enforcement of the civil rights of black Americans . . . into every phase of the programs I will propose.”

While marking Dr. Martin Luther King’s birthday in 1983, President Reagan drew an arresting parallel between the first Republican president and the man Americans were honoring that day. “Abraham Lincoln freed the black man,” he noted. “In many ways, Dr. King freed the white man. . . . Where others — white and black — preached hatred, he taught the principles of love and nonviolence.”

Bush Angle to Reagan Shooting Still Unresolved as Hinckley Walks

Why did George H.W. Bush and his cabinet determine that John W. Hinckley Jr. — the man who in 1981 tried to kill the newly inaugurated President Ronald Reagan — was a lone nut, and no conspiracy, foreign or domestic, was involved? How did they arrive at this conclusion just five hours after the shooting, without any thorough examination?

And why won’t the Federal Bureau of Investigation release its documents on the shooter?

Hinckley, who was released from a federal psychiatric facility on August 5 after 35 years, remains a mystery, and that’s the way the government prefers it. Among the documents the Bureau withholds are those that reveal organizations linked to him — and the names of his associates.

One noteworthy individual will not even acknowledge knowing of Hinckley beforehand, someone associated with the shooter’s family, and an even longer history of dissociation — George H.W. Bush.

Most Americans have never heard about this — and even those who have will be intrigued by some little-known aspects. One is the rather unique way the Bush clan has dealt with or sought to dismiss such peculiar situations — and this is hardly the only one in which the family has been enmeshed.

Here’s an amazing example: Bush Senior, known to family and friends as “Poppy,” claimed he could not remember where he was when he heard that President John F. Kennedy had been shot. I discovered a good reason why he should have remembered — because he, himself, had been in Dallas that morning.

I learned this while researching the Bush dynasty for what would become the book Family of Secrets. I came upon one odd “coincidence” after another, weird ones that would make anyone’s eyebrows soar.

I also saw an FBI memo showing that the man who would later become Bush 41 had secretly called the FBI shortly after the shooting of President Kennedy with information on a man he said might be involved. It turned out that not only was the man not involved, but that Bush knew him personally — and even, via a subordinate, gave the man an alibi.

I also learned that Poppy Bush was a longtime acquaintance/friend of George de Mohrenschildt, the mysterious Russian “baron” who was perhaps the closest person to Lee Harvey Oswald in the year before Kennedy’s death.

Imagine my interest when I learned of de Mohrenschildt’s connections to American intelligence — and then that Bush Senior himself had covertly served the CIA for decades before being named CIA director as a purported “outsider” in 1976.

Indeed, he’d been secretly mucking around with the spy agency before, during, and after Kennedy was killed.

The CIA, of course, was later revealed by the Senate’s Church Committee investigation to be in the business of arranging the removal — or even the murder — of national leaders in various parts of the world.

Imagine my fascination, then, to learn that John Hinckley Jr., the man who shot and nearly killed President Ronald Reagan in 1981 — an attempt which, if successful, would have resulted in then-Vice President George H.W. Bush moving up to the top spot — was none other than a friend of the Bush family.

How strange is that? So strange that it literally caused NBC News’s anchor John Chancellor’s eyebrows to arch as he reported the curious connection.

The story was broken by the now-defunct Houston Post, and then picked up briefly by the AP and UPI wire services, and some newspapers, plus Newsweek.

Then it vanished without a trace or further inquiry or comment in the mainstream media.

The story was so baffling and off-putting that even I, in writing Family of Secrets more than a quarter-century later, did not mention it. I was preparing to publish a book with so many shocking elements that the publisher and I worried about whether the mainstream media would even dare cover it, or review it fairly in that context, the Hinckley-Bush connection seemed one provocation too far.

Fast forward to early August of this year, when news came that a federal judge had ordered John Hinckley released from captivity. Hinckley had already been granted partial freedoms over the years, including extended stays with his family outside the mental facility where he has been incarcerated. But now he is effectively “out,” albeit with some supervision.

Word of Hinckley’s release was met with pregnant silence, including from entities and individuals that bray about “law and order” — who routinely support jail time with no possibility of parole for all manner of individuals, particularly the poor and the unconnected.

Neither description, of course, fits Hinckley.

The Hinckleys and the Bushes have been friendly for decades, going back to the days when both families set down stakes in the dusty town of Midland, Texas, a magnet for the children of wealthy, East Coast families seeking to cash in on the oil boom.

The Hinckleys were donors to Poppy Bush’s political campaigns over the years, and they gave to support the first, unsuccessful bid for Congress of the young George W. Bush, in 1978. The families lived close to each other, they socialized I saw indications that, at one point, they may have shared the same lawyer.

Even more strangely, Neil Bush, son of the vice president, was scheduled to have dinner with Hinckley’s brother, Scott, the day after the shooting.

The shooting took place on Monday, March 30, 1981. Neil and his wife, Sharon, were to have dinner with a girlfriend of hers who brought along Scott Hinckley as her date. Scott had supposedly been invited to round out the foursome.

Neil and his wife, and Scott, all lived in Denver at the time. Scott’s father’s oil company, Vanderbilt Oil, had its headquarters in Denver at that time. Scott was a company vice president.

Meanwhile, the shooter, John W. Hinckley Jr., lived from time to time with his family in a small town outside Denver. In fact, at the time he shot Reagan, he was living with his parents.

This put Neil Bush, the senior Hinckleys, Scott Hinckley, and would-be presidential assassin John W. Hinckley Jr. in close quarters over an extended period.

Neil might reasonably have been aware that John Jr. was having serious problems, and was in psychiatric care. And — given the Bush family’s politically-driven strategy of tracking and staying in touch with huge numbers of family friends and acquaintances, plus a fondness for sharing the doings of their network among themselves — the probability that Neil would have relayed to his parents John Jr.’s mental problems, and psychiatric treatments, is not remote.

In the fall of 1980, Hinckley was arrested at Nashville airport carrying three guns on the very day that then-president Jimmy Carter arrived in that city. (He is believed to have been stalking Carter, against whom the Reagan-Bush ticket was locked in combat) He was neither fingerprinted nor charged.

Notwithstanding the commonness of guns in Tennessee, once he was in custody, nobody seems to have discovered his troubled background and psychiatric problems or expressed any concern that a gun-toting non-local was arriving in the same city at the same time as the president.

(It’s interesting to note that just as Hinckley stalked candidates of both parties with widely differing political philosophies, authorities claimed that Lee Harvey Oswald took shots not only at President Kennedy, but also at General Edwin Walker, a Kennedy nemesis on the hard right.)

In late 1980 and early 1981, Hinckley was also stalking the actress Jodie Foster. He said that he had been hearing “voices” in his head — and became convinced that he and Foster had a special bond.

Interestingly, notes by Hinckley describing a conspiracy to assassinate a president were found in a search of his prison cell, according to Breaking Points, a memoir written by his parents. They said the notes referred only to “an imaginary conspiracy” and his lawyers dismissed them as far-fetched. They have never surfaced publicly.

The FBI declined to release 22 pages of documents that included the names of associates and organizations linked to Hinckley, and details of his finances..

A jury bought the story that the Hinckley case was strictly one of a deranged individual obsessed with an actress and he was found guilty and packed off to the Washington-area St. Elizabeth’s mental hospital — an institution with a fascinating history of involvement with the CIA’s MK-ULTRA program, which focused on mind control experiments — and efforts to study the possibility of “programming” killers. Psychiatrists played a crucial role in recruiting subjects for these experiments. (Documents on Hinckley’s psychiatric records are among those kept secret.)

Congressional hearings in the 1970s revealed the existence of MK-ULTRA and these mind-control programs. Five years before the Reagan shooting, at the time of those hearings, the new CIA director was…. Poppy Bush.

John Hinckley Sr. (“Jack” Hinckley) was deeply involved with World Vision, a nonprofit humanitarian organization that receives heavy funding from USAID, the government organ that has historically been closely associated with the Central Intelligence Agency. He was close with the head of World Vision’s ministries, a former State Department official who worked, among other things, as an adviser in Vietnam.

Interestingly, another “lone nut” who changed the global landscape, Mark David Chapman, who shot and killed John Lennon, had been an employee of World Vision.

Vice President Bush seems never to have personally commented on his connections with the Hinckleys. In a typical non-response — which I noted in Family of Secrets is a Bush family tactic in dealing with sensitive information — a Bush aide, press secretary Peter Teeley, told a UPI reporter the day after the arrest: “I don’t know a damn thing about it. All I know is what you’re telling me.”

Of course, the issue was not what the British-born Teeley knew, it was what his boss knew. Asked whether Bush had mentioned knowing the Hinckleys, Teeley replied that the veep “made no mention of it whatsoever.” So there we have it: no actual comment from Poppy Bush himself.

Neil Bush, at a press conference the day after the shooting, did admit to one connection with the Hinckleys: he mentioned, in passing, that Scott Hinckley had also been at his house a couple of months earlier, at his surprise birthday party. Ostensibly he was there as the “date” of the same “close” female friend who was scheduled to dine with the Bushes the day after the shooting.

The apparent use of the woman friend of Sharon Bush to explain any connection between the families, despite an already existing direct connection between the families, warranted more attention.

This was again a typical pattern I had noted with the Bushes: stress another person, in this case, the female friend, as if she were the only connection between the Bushes and the Hinckleys, thereby diverting attention from the central fact: the Bushes and Hinckleys were themselves longtime friends. (Neil did claim he had never met the gunman or the gunman’s father — a claim that would be hard to disprove — and that would in any case hardly matter given the family-to-family connections.)

In any event, no evidence has ever surfaced that any of the Bushes were so much as questioned about their relationship to the Hinckleys by the FBI, Secret Service, or any other entity, and no investigation, informal or formal, appears to have taken place.

Meanwhile, the media’s focus was on the highly unpopular Secretary of State, Alexander Haig, whose statement that “I’m in charge here” in the minutes after Reagan’s shooting was turned into a meme that is remembered to this day, despite the fact that Haig had merely stated that he was in charge as the third in succession, “pending the return of the vice president and in close touch with him.”

Thus, the Haig story became a sensation, and successfully distracted just about everyone from the weird Bush-Hinckley connection.

Poppy would have become president if Reagan died, rather than waiting eight long years. He had engaged in a bitter primary campaign against Reagan, who then surprised many people by taking Bush as his running mate. (Richard Nixon, once asked by an aide why he took such an unappealing and unpopular figure as Spiro Agnew as his vice president, reportedly answered, “assassination insurance.” It’s interesting to note that George H.W. Bush similarly chose Dan Quayle, a figure widely considered a “lightweight” ill suited to the presidency, as his running mate.)

In any case, although Reagan survived, Bush for a time served as de facto president — and after Reagan’s resumption of “power,” Bush remained an astonishingly influential vice president, to many, the real power in the country in many respects ever after.

Around the time of the shooting of Kennedy in Dallas, the Hinckleys were operating out of Dallas, with offices in the Republic Bank Building, a tower which housed many entities and individuals connected by varying degrees to intelligence activity, including the offices of the mysterious Russian “baron” George de Mohrenschildt (an old friend of George H.W. Bush), who was perhaps the principal influence in the life of Lee Harvey Oswald in the year leading up to the shooting of Kennedy.

In 1978, not long before Poppy Bush’s presidential bid, his son George W. was making his first bid for elective office (with donations from the Hinckley clan). Neil Bush was W’s campaign manager, living in the city of Lubbock.

Another person living there at that time was… John Hinckley Jr. Asked about that by a newspaper reporter, W. commented that it was “conceivable” Neil would have met Hinckley during that period.

As for himself, W. said at the time, “It’s certainly conceivable that I met him or might have been introduced to him. I don’t recognize his face from the brief, kind of distorted thing they had on TV and the name doesn’t ring any bells. I know he wasn’t on our staff. I could check our volunteer rolls.”

Was there any follow-up? Did Bush ever seek to learn more about Hinckley or explain what ways they were or were not acquainted? Not that I can find.

And then there is this: The very day that Reagan was shot, the Reagan-Bush Department of Energy notified the Hinckley family at Vanderbilt oil that the government might be forced to penalize the family business to the tune of $2 million. (AP, April 1, 1981) Was Scott coming to dinner with Neil to try to sort it out? Whatever happened, after John Hinckley shot Reagan, the penalty never materialized.

Neil never did provide a more satisfying explanation of why the shooter’s brother was coming to his house for dinner than that he was filling in as a date for a friend of his wife’s. But who had suggested the dinner in the first place, and who had recommended Scott be one of the foursome? That remains murky.

As for the shooter, here’s what Neil said about whether he knew or had met him: “I have no idea,” he said. “I don’t recognize any pictures of him. I just wish I could see a better picture of him.”

In a memoir, Bush aide Chase Untermyer, who accompanied Bush to the unveiling, writes:

I washed up and went to bed for a nap before writing this entry. Around 1:30, I was awakened by a call from Art Wiese of the Houston Post. Art related the possibility that Neil Bush (the VP’s son) may be acquainted with the alleged assailant, John W. Hinckley Jr. Neil and Sharon do know Hinckley’s brother (in Denver) and were planning to have dinner with them tomorrow night. The Hinckleys are a prosperous family, and John Sr. may have been a Bush contributor. Art wanted to know if this connection was known by GB…

As Art pointed out, even a slight Bush connection in this shooting could set off the conspiracy freaks.”….

“What’s up?” GB asked, seeing us all there.

“Did you talk to Neil last night?” Pete asked as we entered the West Basement.

We all went into the VP’s office, where Pete related the story that Wiese had been working on and which was being played big in Houston and over the wires. GB appeared only mildly concerned, so little in fact that he didn’t think to call Barbara or ask any of us to do so.

This should have been one of the most investigated, most heavily reported stories for years after. Certainly, in contrast to the email scandal, Benghazi, Travelgate, and other complex and somewhat esoteric matters that became media rages, lasting on and on and dominating the public conversation, this peculiar Hinckley matter — which by any measure passes all the tests for something worthy of interest by law enforcement — just vanished.

Even when Neil Bush’s involvement in the massive Savings and Loan collapses that dominated headlines in the 1980s was widely reported, no mention was made of the fascinating Bush-Hinckley connection.

To sum up: John W. Hinckley’s brother attends a surprise birthday party at Neil Bush’s house in a period when John Hinckley was suffering serious mental problems. The government exerts financial pressure on the Hinckley family business. Hinckley shoots President Reagan, nearly making Neil Bush’s father the president. The financial pressure on the Hinckleys disappears, George H.W. Bush is in charge of the “investigation” of the shooting, the Hinckleys chalk it all up to their son’s demons, everyone focuses on Jodie Foster, and that’s the end of that.

Coincidence? Sure. Anything, after all, is possible.

Related front page panorama photo credit: Adapted by WhoWhatWhy from Neil Bush (Reagan Library) and John Hinckley (FBI / Wikimedia)

Reagan and the Cold War

President Ronald Reagan, in his famous June 1982 speech to the British Parliament, described the outlines of “a plan and a hope for the long term—the march of freedom and democracy which will leave Marxism-Leninism on the ash-heap of history as it has left other tyrannies which stifle the freedom and muzzle the self-expression of the people.”

Five years later, Reagan delivered an address at the Brandenburg Gate in West Berlin, near the infamous Wall. A new Soviet leader, Mikhail Gorbachev, had recently been making noises about a fundamental change in the communist system. “The Soviets themselves may, in a limited way, be coming to understand the importance of freedom,” Reagan observed. “We hear much from Moscow about a new policy of reform and openness.” Still, the West was right to ask whether this marked the beginnings of profound changes in the Soviet state or merely token gestures, intended to raise false hopes and to strengthen the Soviet system without changing it. But, Reagan noted, “there is one sign the Soviets can make that would be unmistakable, that would advance dramatically the cause of freedom and peace.

Communism (at least the Soviet variety) has indeed been since left on the ash-heap of history. The wall was torn down. How did this happen and who should get the credit?

Peter Schweizer, a Fellow at the Hoover Institution, has no doubt of the answer. The title of his latest book tells all: Reagan’s War: The Epic Story of His Forty-Year Struggle and Final Triumph over Communism (New York: Doubleday). Schweizer argues that Reagan had comprehensive vision for dealing with the Soviet Union and ending the Cold War. Reagan’s approach was remarkably consistent for four decades.

Reagan’s views about and opposition to communism were long-standing and personal, going back to his experience with Soviet efforts to infiltrate Hollywood in the 1940s. Reagan hated the tyranny and oppression of Marxism-Leninism but he also had a positive and optimistic view of humanity that he believed was best exemplified by the American regime.

What struck Reagan about Communism was its weakness. Communists ruled by fear and intimidation. He believed that policies of peaceful coexistence Ð or of passively containing the Soviet Union Ð would be disastrous. The Communists would over time use the Western fear of war, especially nuclear war, to undermine the confidence of free peoples. They practiced “salami slice” tactics of intimidation and bluff to gain marginal advantages that would eventually accumulate to a victory in the Cold War or allow the Communists to win a final showdown. Reagan sought to turn the tables on Moscow and its allies by advocating an all-out fight against the growing encroachment of Communism in this nation and throughout the world.

By all-out fight, Reagan did not mean military action, although if that was required of the United States in particular circumstances—e.g., Korea, Vietnam—the United States should have fought to win. The key front in the Cold War, in Reagan’s assessment, was actually the Soviet economy. Marxism was a materialist philosophy, and its chief claim to practical allegiance around the world was its supposed ability to produce economic plenty (and thereby, social justice). In fact, Reagan believed that democracy and capitalism had decisive, natural advantages over totalitarian systems and centrally-planned economies. Reagan sought to confront the Soviet Union simultaneously with various forms of economic pressure: nearly-open ended American military spending threats to the security of the Soviet empire (especially in Eastern Europe and Afghanistan) through direct and indirect American support to resistance movements losses of foreign currency that the Soviets had expected from sales of oil and natural gas and a cutoff of Western aid and technology.

Reagan argued that the Cold War would end only when there was a fundamental change in the Soviet system, and not just in Soviet policies. The strategy of economic warfare was designed to force such a change, by bringing to the fore a new generation of Soviet leaders who would finally recognize the bankruptcy of communist ideology and move toward a true political rapprochement with the West. The United States, in turn, would promote democracy throughout the world as a magnet and an example to all the peoples oppressed by dictatorships of whatever stripe.

Of course, Schweizer does not offer the only explanation for the end of the Cold War. The Left (broadly defined) has a different hero: Mikhail Gorbachev.

According to the Left, Reagan was an accidental, indeed, an unworthy beneficiary of Gorbachev’s reforms. Indeed, Reagan’s threats and military pressure only retarded the Soviet leader’s plans and made the peaceful transformation of the Soviet Union impossible. Gorbachev, if he had met with a more enlightened American leader than Reagan, might have succeeded in approximating the Left’s great aim: democratic socialism with a human face. Instead, Gorbachev was removed from power the Soviet Union disintegrated into a hodgepodge of unstable states armed in some cases with nuclear weapons and ruled by fascist oligarchs. Left unchecked by countervailing Soviet power, the United States has since gone off on unilateralist crusades. By the lights of the Left, Reagan didn’t win the Cold War we all lost it.

For those who believe that “democratic socialism with a human face” is oxymoronic at several levels, the Left’s assertion that we all lost the Cold War is hardly worthy of comment. But Reagan undeniably and deliberately did run the risk of war in order to place pressure on Moscow. Historians still debate just how close we came, especially during the European nuclear missile crisis in the early 1980s. In any event, we should be thankful that the Soviets chose to fold their hand rather than fight. As Reagan correctly estimated, they lacked the stomach for war. But we may not be as fortunate with other tyrants and terrorists in the future.

The American foreign policy establishment has a different explanation for the end of the Cold War: Containment of the Soviet Union finally worked. Containment was the bipartisan U.S. national security policy initially adopted in the late 1940s and pursued (according to the establishment) resolutely by successive presidential administrations, Republican and Democrat. The United States won the Cold War because it outlasted the Soviet Union through a battle of attrition, not because of any brilliant strategic maneuvers. Reagan played an important role in this process, but he was merely standing on the shoulders of giants beginning with Truman, Marshall, and Acheson.

This conclusion is self-serving and self-congratulatory. It presumes the “right to rule” by foreign policy elites who know all the answers. But it has an essential element of truth. America did stay the course. American foreign policy throughout the Cold War was hardly as passive and defensive as often portrayed (and as Reagan sometimes seemed to believe). NSC-68, the national security policy document adopted during the later stages of the Truman administration, had a strong offensive thrust. Even the much-maligned Carter administration made its contribution, as key officials in the Department of Defense conceived of an “offset strategy” that would match American technological strengths against Soviet weaknesses and drive up the cost of defense for the Kremlin. Ronald Reagan inherited this strategy but, unlike Carter, he proved willing to pay for it.

The American foreign policy establishment resisted many of Reagan’s initiatives as too risky, and its representatives fought vigorously to take the edge off many of his policies or redirect them altogether. Reagan himself subscribed to the adage of coaches everywhere, that it is amazing how much can be accomplished when no one cares who gets the credit. He accepted the fierce interagency and Congressional disputes that arose in consequence, as part of the price of implementing his policies in a democracy. He never lost sight of the prize, however.

Conservatives generally accept Schweizer’s explanation for the end of the Cold War. They are happy to take credit for Reagan’s success and apply his name to policies they wish to pursue in the future. Yet there are some important differences between Reagan’s approach and that of many of his conservative contemporaries. Reagan was naturally optimistic about the strength of democracy and the weakness of communism. He believed the West could and would win the Cold War. Many (not all) conservatives were pessimistic. They doubted the will of the democracies, overestimated Soviet staying-power and toughness, and saw themselves as fighting a rear-guard action designed to stave off defeat as long as possible. Some conservatives questioned Reagan’s judgment when he saw the possibilities of doing business with Gorbachev they argued that any negotiation with the Kremlin Ð any accommodation to the fears of allies Ð was politically demoralizing.

In the end, Reagan was proven correct on the big questions against critics from the left, center and right. He was never one to sweat the small stuff. And as Schweizer concludes, “Reagan’s hope that we be guided not by fear but by courage and moral clarity is as apt today as it was during the Cold War.”

Confronting the Afro-Asian Bloc

A related purpose of the Trilateral Commission was to promote cooperation among the industrialized countries in the face of an emerging bloc of Arab, African and Asian states which had come to dominate the General Assembly of the United Nations.

The emergence of the Afro-Asian bloc was not foreseen by the founders of the United Nations. In 1945, when the UN was founded, most of Africa and much of Asia remained in subjugation to British and French imperialism. As colonies, these countries were not even considered for UN membership.

As the countries of Asia and Africa gained political independence, it was expected that continuing economic dependence would cause the former colonies to align politically with the former colonial masters. Instead, nationalist pride, along with a heavy dose of Marxism imbibed at British and French universities, caused the new leaders in Africa and Asia to line up against America and Europe.

In the case of the Arab countries, the U.S. alliance with Israel provided additional encouragement for their anti-Americanism.

The voting majority held by the radical Arab, African and Asian states in the UN General Assembly did not in reality threaten America or Europe. America, Europe and Japan provide the bulk of funding for the UN and its agencies. A cut-off of funds from the Trilateral countries would render the UN an empty shell.

Is there a conspiracy to bring the price of oil down?

There are a number of conspiracy theories floating around. Even some oil executives are quietly noting that the Saudis want to hurt Russia and Iran, and so does the United States — motivation enough for the two oil-producing nations to force down prices. Dropping oil prices in the 1980s did help bring down the Soviet Union, after all.

But there is no evidence to support the conspiracy theories, and Saudi Arabia and the United States rarely coordinate smoothly. And the Obama administration is hardly in a position to coordinate the drilling of hundreds of oil companies seeking profits and answering to their shareholders.