{"id":32336,"date":"2018-03-14T16:53:14","date_gmt":"2018-03-14T21:53:14","guid":{"rendered":"http:\/\/olduvai.ca\/?p=32336"},"modified":"2018-03-14T16:54:33","modified_gmt":"2018-03-14T21:54:33","slug":"this-isnt-your-grandfathers-1960s-inflation-scare","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=32336","title":{"rendered":"This Isn’t Your Grandfather’s (1960s) Inflation Scare"},"content":{"rendered":"
\n

This Isn\u2019t Your Grandfather\u2019s (1960s) Inflation Scare<\/a><\/h3>\n<\/header>\n
\n

\"inflation<\/a><\/p>\n

\u201cThis reminds me of the late 1960s when we experimented with low rates and fiscal stimulus to keep the economy at full employment and fund the Vietnam War. Today we don\u2019t have a recession, let alone a war. We are setting the stage for accelerating inflation, just as we did in the late \u201860s.\u201d
\n\u2014Paul Tudor Jones<\/a><\/p><\/blockquote>\n

As soon as the GOP followed its long-promised tax cuts with damn-the-deficit spending increases (who cares about the kids, right?), you knew to be ready for the Lyndon B. Johnson reminders.<\/p>\n

And it\u2019s worth remembering that LBJ pushed federal spending higher, pushed his central bank chairman against the wall (figuratively and, by several accounts, also literally) and eventually pushed inflation to post\u2013Korean War highs.<\/p>\n

Inflation kept climbing into Richard Nixon\u2019s presidency, pausing for breath only during a brief 1970 recession (although without falling as Keynesian<\/a> economists predicted) and then again during an attempt at wage and price controls that ended badly. Nixon\u2019s controls disrupted commerce, angered businesses and consumers, and helped clear a path for the spiraling inflation of the mid- and late-1970s.<\/p>\n

So naturally, when Donald Trump and the Republicans pulled off the biggest stimulus years into an expansion since LBJ\u2019s guns, butter and batter the Fed chief, it should make us think twice about inflation risks\u2014I\u2019m not saying we shouldn\u2019t do that.<\/p>\n

But do the 1960s really tell us much about the inflation outlook today, or should that outlook reflect a different world, different economy and different conclusions?<\/span><\/p>\n

I would say it\u2019s more the latter, and I\u2019ll give five reasons why.<\/p>\n

1\u2014Technology<\/u><\/b><\/p>\n

I\u2019ll make my first reason brief, because the deflationary effects of technology are both transparent and widely discussed, even if model-wielding economists often ignore them. When some of your country\u2019s largest and most impactful companies are set up to help consumers pay lower prices, that should help to, well, contain prices.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

This Isn\u2019t Your Grandfather\u2019s (1960s) Inflation Scare \u201cThis reminds me of the late 1960s when we experimented with low rates and fiscal stimulus to keep the economy at full employment and fund the Vietnam War. Today we don\u2019t have a recession, let alone a war. We are setting the stage for accelerating inflation, just as […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18667,19280,19281,19282,202,10520,7844,370,3574,426,8530,6841,19283,4520,11866,12096,19284,4305,4219,19285,19286,19287,19288],"class_list":["post-32336","post","type-post","status-publish","format-standard","hentry","category-economics","tag-circular-flow","tag-commentbank-lending","tag-cost-push-inflation","tag-debt-to-gdp-ratios","tag-deflation","tag-disinflation","tag-donald-trump","tag-globalization","tag-great-inflation","tag-inflation","tag-john-f-kennedy","tag-keynesianism","tag-lyndon-johnson","tag-m2","tag-monetarism","tag-monetary-aggregates","tag-new-economics","tag-paul-tudor-jones","tag-richard-nixon","tag-robert-samuelson","tag-wage-and-price-controls","tag-wage-price-spiral","tag-william-greider"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32336"}],"version-history":[{"count":4,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32336\/revisions"}],"predecessor-version":[{"id":32340,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32336\/revisions\/32340"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}