The Source of Change.

A major source of the instability and change of the economy during the 1970s was energy. In early 1973 the United States faced shortages of electricity, gasoline, and heating oil, leading to the shutdown of factories and schools, the cancellation of some commercial airline flights, electrical brownouts, and lines at gasoline service stations. Blackouts plagued cities and industries, most spectacularly in New York City on 13— 14 July 1977. High fuel prices reduced the productivity of American industry. Heavy imports of fuel harmed the U.S. balance of payments and destabilized the international monetary system.

The Embargo.

On 6 October 1973 the Yom Kippur War between Israel and its Arab neighbors broke out. When the United States moved to support Israel, several of the oil-exporting nations of the Middle East cut off exports of oil on 19 October. The price of oil in December 1973 rocketed...