Posted on 02/06/2023 7:06:40 AM PST by ChicagoConservative27
The ghost of the early 1980s recession is haunting the Federal Reserve.
With inflation still near 40-year highs and the U.S. economy slowing, the Fed’s aggressive rate hikes have fueled concerns of a central bank-induced recession akin to the one triggered by former Fed Chairman Paul Volcker during the 1980s. While Volcker’s rate shock ended two decades of rising inflation, it did so at the cost of a severe recession.
Fed Chairman Jerome Powell has frequently praised Volcker’s refusal to back down and channeled that persistence into his own battle with inflation. But most economists believe Powell can wage a far less costly war against rising prices, given major shifts in the economy — and Fed policy — since the days of Volcker.
“Inflation looks like it has already peaked and never got near the 14.5 percent peak reached in 1980, so the Fed will not have to raise rates as high as it did back then,” said Eric Swanson, an economics professor at the University of California, Irvine.
(Excerpt) Read more at thehill.com ...
You know what should haunt the Fed even more? The 70s inflation that caused the early 80s recession.
The 1970’s inflation was a direct result of fuel price increases, IMHO. That resulted in a decrease in production, and consumption, and eventually cycled into the recession.
We have the price of fuel, especially diesel, more than double that under Trump. That’s only PART of the problem, the other part is the 13.7 Trillion in spending by Joe Biden in 23 months, or about 2.5 times expected tax revenue. That causes currency devaluation which along with increased fuel prices, is pushing inflation.
I don’t see it as the same problem as 1980-81. This is a new animal werein supply side economics may or may not help. So, to control inflation and a recession we have to make energy cheaper and stop deficit spending. What we really need to help the American People is a fiscally responsible government.........
That won’t happen without a balanced budget amendment.
Some of us were there and remember that it was not Reagan’s recession or inflation, it was OPEC’s.
Carter just made it worse.
It was a miserable time if you were not in the oilfield. Things there were great.
Carter wasn't a failure. He was successful in his mission.
“IMHO a major factor for OPEC’s power in the 1970’s was the then newly created EPA making drilling for oil harder to do here. The left who say they hate Nixon seem to love the EPA Nixon created. Carter’s version of the EPA made oil drilling harder to do in the U.S. When you depend on other countries for oil, they get to set the price.
Carter wasn’t a failure. He was successful in his mission.”
Yes, Nixon’s swamp creation, the EPA and Carter’s anti-energy here in the US were big players as well. Sometime when your really bored, investigate the EPA, Air Quality, and it’s effect on Global Warming......
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