Petrodollars and the Rise of Financial Power

David Gibbs explains the 1974 Saudi deal, petrodollar recycling, and how it preserved U.S. dollar dominance.

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Transcript

Episode notes

While the podcast team is taking a Radical Sabbatical, Kim is interviewing authors of the books that have had a big impact on her in the past two years.

Wealth concentration in the United States is top of mind these days. While it’s tempting to see this as a recent trend, it is instructive to look at what was happening in American politics decades ago and see how many of these forces were set in motion in the 1970’s.

Kim talks with Prof. David Gibbs about his book, Revolt of the Rich, How the Politics of the 1970s Widened America's Class Divide. Prof. Gibbs reviews decisions that were made during the Nixon and Carter administrations that continue to reverberate in our world today. For example, during the first oil shock in the early 1970s, President Nixon actively worked to keep oil prices high to support the Shah of Iran and to prop up the dollar. The result was financialization and deindustrialization. Later in the decade, President Carter was central to the trend of deregulation. The net effect of these decisions was an erosion of the foundations of the American middle class.

Technical note: we had an issue with one of the microphones on this interview that affected the sound quality. Sorry if this affects your enjoyment of this episode.

Background on David Gibbs: David N. Gibbs is professor of history at the University of Arizona, whose past research has emphasized political conflicts in Sub-Saharan Africa, Eastern Europe, and Afghanistan. He has published extensively in academic journals as well as the London Guardian, Los Angeles Times, Christian Science Monitor, Le Monde Diplomatique, Salon, and Jacobin. His third and most recent book is entitled: Revolt of the Rich: How the Politics of the 1970s Widened America’s Class Divide. His detailed personal website is at: https://dgibbs.arizona.edu/

Resources:
Buy Revolt of the Rich on Bookshop.org

(00:00) Introduction to the Radical Sabbatical Podcast

(01:33) The Oil Crisis of the 1970s

(04:46) Nixon's Role in the Oil Price Increase

(09:59) Petrodollars and U.S. Economic Power

(12:37) Financialization and Deindustrialization

(15:05) Impact on Ordinary Americans

(18:28) The Revolt of the Rich

(21:34) The Shift in Economic Power

(24:41) Political and Economic Alternatives

(26:01) The Evolution of Taxation and Economic Policies

(27:48) The Shift in Political Ideologies