The efficient market says that the market price reflects "all available information". That's tautological, and it's hard to argue with tautologies. The problem is that trades are made by people or algorithms designed by people. Different people have different tolerances for risk, different ideas about market performance and different strategies for making money. What does it even mean for a price to reflect all available information? A lot of that information is embedded in people's minds and situations and in our institution structures.
So, as stated, the EMH is correct. It has to be. What does this mean for trading? It helps to remember is that one can only sell a stock for what someone else is willing to buy it for and one can only buy a stock for what someone else will accept as payment. The EMH says that's the price which is great, but not useful. I think the problem is that people tend to think that there is some absolute true price that is somehow discovered by trading. There's no reason to believe this, but it is comforting. People try to estimate this price by looking at earnings, by looking at liquidation value, by studying prospects, by surveying potential customers and so on. That might be useful for deciding your own buy or sell price, but that's your price.
The idea of the EMH is that the price is somehow or another actually the absolute true value of the item at a particular instant. I tend not to indulge in such mysticism. I've been through too many market crashes and transitions. I think societal and institutional structure are more important. Most people don't have money. That limits investment opportunities, and for most of my lifetime the rule has been, if there is nothing to invest in, put your money in the stock market.
P.S. Back in January, I expected the market to crash for the COVID-19 epidemic and was tempted to sell. I did sell a few losers I was planning to sell anyway, but I had enough cash on hand to decide not to sell morre. Unless COVID-19 leads to a major restructuring of our economy that spreads the wealth more broadly, odds are it is going to recover nicely.
LBJ's guns (Vietnam) and butter (Great Society) were already causing a lot of inflationary pressure. Nixon imposed wage-price controls in 1971 around the time he took us off Bretton-Woods. I gather the Fed was raising interest rates, but not enough to slow an economy with that level of rising inflation. Wage price controls were considered, depending on your politics and probably the time of day, socialism or war-time measures. B-W was a good post-WWII idea that helped the post-war recovery, but as in the 1930s, gold standards never work as well in practice as they do in theory.
The 1973 oil shock was a real shock. Oil prices rose slowly thanks to future hedging and inventory. Gas prices didn't rise all of a sudden. They crept up, but availability became spotty. People got nervous and topped up more often, kind of like toilet paper more recently, and for similar reasons. People wanted a stash of their own rather than trusting the supply chain. (Should I mention Watergate here? It wasn't an economic thing, but it contributed to the sense of something being wrong. People had different sensibilities back then.)
The US had only started importing oil in 1968 or 1969. Before then, petroleum was local. Then came the embargo. I remember the gas lines, the odd-even day rationing and the general shock to the American way of life. The suburbs had been booming through the 1960s, and now, in the early 1970s, one had to look for a green or yellow flag to buy gasoline. Old timers remembered WWII rationing, but the US was much more car dependent in the 1970s. If nothing else, people suddenly had to evaluate their use of gasoline, much as one now has to assess one's risk of catching COVID-19.
In some ways the economy was pretty crappy in the 1970s, but if you were working, it was probably a high point. I remember reading the Middletown books on the 1920s and 1930s. The working and business class lived in two separate worlds. The former eked out a precarious living. The latter had a much bigger buffer and more opportunities. There was a followup study in the 1970s, Middletown Families, that pointed out that the divide between the working class - whites only - and the business class seemed to have vanished. Many more people were getting decent pay, benefits, comfy housing and so on. We've gone back to the 1920s pattern. You can call it the exempt / non-exempt divide or the working / business class divide, but that old gap has returned.
You are right that the economic slowdown wasn't just about the price of oil. There was a lot going on, and I haven't mentioned the baby boom yet. There was a big difference between being a boomer before 1955 - that's the usual year cited - and after 1964. The baby boom was a surprise in the 1940s and it built slowly. By 1972, the boomers were starting to saturate the economy, so I'm guessing there was demographic pressure as well. I'll leave that to Peter Turchin, but we've seen a lot more immiseration and elite competition - his terms - since then.
An even more interesting question is "Why are juveniles smaller than their parents?" It was raised by Ellistrand in a 1983 paper.
It isn't clear that aging is something under evolutionary pressure. This may be what evolutionary theorists call a "spandrel" situation. It's more about structure and mechanism, that is the shape of the landscape, than optimization in that landscape.