It's hard to put a finger on it, but something about this barroom brawler of a song just feels different than the rest of Tonight's The Night. If you were to play the album's songs on a juke box, you'd wind up with a bunch of people slumped over the bar and crying into their beers. Not "Lookout Joe." Put this one on the old juke and you'll get air guitars and "hell yeahs" all over the place. There's a reason for this discrepancy.
"Lookout Joe" was written earlier than the other songs on the album, back during rehearsals for Young's tour promoting the 1973 album Time Fades Away. This was before the death of guitarist Danny Whitten, which is a significant note because Tonight's The Night was written in mourning of Whitten and roadie Bruce Berry.
"Lookout Joe" is about Vietnam veterans. At the time, the term "GI Joe" was still common slang for US soldiers, with "GI" being an abbreviation for "government issue" or "general issue." The term has since fallen out of use, probably because of the widespread popularity of the G.I. Joe action figure and cartoon line.
The song is warning GIs that times have changed and the streets are no longer to be trusted. "Old times were good times," sure, but this is no longer old times, and Joe needs to lookout lest he gets caught in the same cycle of addiction and waste that greeted so many Vietnam vets.
There's a second layer to this song. In addition to warning Joe, it's also a commentary on how American society had degenerating in the 1970s. Young saw firsthand the destruction being wrought on his generation by drugs.