Times change. Sell off the oil.

President Trump has proposed selling half the oil from the Strategic Petroleum Reserve (SPR). He is right on this, and it would be a good start on selling all the oil.

Sadly, the SPR is a failed economic experiment. In 1976, I supported it, believing it held promise as a means of stabilizing the nation’s economy by moderating the impact of price volatility. I was wrong.

The SPR was created at a time of widespread commodity shortages. “Buffer stocks,” a concept made popular by economist John Maynard Keynes, were proposed. Studies showed that large government-owned stocks could steady commodity prices and reduce disturbances caused by price spikes.

Those who originally endorsed the SPR talked not of price fluctuations but shortages. The SPR was created in the belief that stocks could be used to address shortfalls.

Behind the scenes, everyone understood shortages never occur. Instead, prices increase to clear markets. The fear was that oil might rise above $100 per barrel — an unheard of level in 1976 — causing economic dislocations. Some worried that U.S. strategic relationships could be undermined by high prices.

Four decades later, we have had multiple experiences with $100 oil. Economic activity was disrupted by high prices.

The disruptions occurred because strategic reserves were not released. Governments proved incapable of using their stocks. Conflicting pressures tied their hands. Consumer activists demanded that the SPR be used. Oil companies, though, lobbied against this, asserting more than once that no “shortage” existed and thus the reserve should not be used. Their arguments prevailed. Strategic stocks were captured by industry.

Today, markets have addressed the problem. Futures markets, which did not exist in 1976, have allowed for the hedging of more than 2 billion barrels of oil, three times the amount held in the SPR. These markets make it possible to dampen price fluctuations. Indeed, these markets broke OPEC and have held prices to about $50 per barrel.

Markets have made the SPR superfluous. In this era of budget stringency, the oil must be sold.