As I believe there is a tremendous amount of revisionist history going on surrounding the Reagan era as it relates to economic and fiscal policy, I’ve begun to research available online archives, including the The American Presidency Project.  One never knows what one will find upon diving into a research project, but surprises are always to be expected.  And so today’s tidbit:

It appears the Gipper would tell all of today’s inflationistas to relax and stop running around with their hair on fire:

Surges of inflation are not unusual in history; there were price explosions after both World Wars, as well as smaller outbursts in the 1920s and late 1930s. Therefore, in spite of the role played by food and energy prices in recent inflationary outbursts, it is misleading to concentrate on these transitory factors as fundamental causes of the inflationary bias in the American economy.

I agreed with President Reagan here and here.

Category: Inflation, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “Fade the Inflation Hysteria: Gipper Edition”

  1. gman says:

    Fade Brockvar!

  2. Rouleur says:

    …fade invictus, for that matter…cpi less “inflation”, huh?…come, on – manipulative construct…

  3. Permabear says:

    I hope that Barry isn’t implying that Dick Cheney was right when he said” “Reagan proved deficits don’t matter”. Further I hope that Barry isn’t implying that the Fed can just carry on with QE3, 4, 5 ,6 and on and on without repercussions. My view is that the Fed is caught between a rock and a hard place. The consumer is still up to his/her neck in debt and will be deleveraging for years to come. As long as the consumer is deleveraging, the economy is going to suck for years to come. Thus the natural trend of the economy going forward is deflation, and if totally left to its own devices, economic depression. So the question is does the government and Fed come in to continue to rescue the economy from the ravages of deflation and depression, and in turn put the nation at risk of hyperinflation? I don’t have a good answer to this question because I am a permabear. I don’t think there is a good answer to this question. I think whatever the government and Fed do, it’s going to turn out badly because we lived beyond our means for the past 30 years and now we’re paying the dues.

  4. socaljoe says:

    The damage caused by inflation is due to its relentless compounding nature. Even though it may appear benign on a yearly basis, it destroys savers’ wealth over time.

    According to the CPI, for example, inflation has robbed savers of about 1/3 of their savings since 2000… a period which is generally considered low inflation.

    Since 1970, it has taken almost 90%.

    Today, deposit rates do not offset inflation, making it impossible for savers to protect themselves from the wealth confiscation of inflation without taking much more risk.

  5. techperson says:

    As long as you have a Fed that doesn’t monetize the deficits, Reagan was right. There’s a reason the subtitle to Survive The Great Inflation is “How to Protect Your Family, Your Future and Your Fortune from the Worst Fed Regime Ever.” At the end of the day, fiscal stupidity resolves itself unless it is monetized, so the last clear chance to avoid the train wreck requires Bernanke to act like Volker. Not going to happen.

  6. pflantzdog27 says:

    I believe Reagan would be happy to let the people worry about inflation – it’s largely better than the fear of deflation.

    Submitted this article on Shmish! – go vote for it. http://shmish.com

  7. mathman says:

    Permabear: i’m with you, but it wasn’t just the U.S. living beyond its means. Our species’ industrialized way of life on earth based on finite fossil fuels, an unbalanced distribution of wealth, plundering the world’s resources, population increase and longevity have tipped the scales for humanity just as if we were yeast on a petri dish – despite our much touted ‘intelligence’, we overran the carrying capacity of our planet, polluted everything everywhere and now we’re in the bottleneck of decline. Politics won’t change our wrong-headed direction and it’s too late to do anything about the repercussions. From here on out it’s gonna be ugly and get worse each year for the foreseeable future. It may start slow and look like it’s something we can handle, but as things interrelate (like climate change and Peak Oil to mention just one) the effects will compound and our situation will become worse by orders of magnitude before long.

  8. OK Avenger says:

    Serious question. Can anyone tell me of an event of hyper-inflation not tied to a serious calamity like a war, or a natural disaster, or serious social unrest prior to the hyper-inflation? I can’t think of any off the top of my head, but I could be wrong.

  9. VennData says:

    If Reagan’s relentless tax increases wouldn’t cause inflation…

    http://old.nationalreview.com/nrof_bartlett/bartlett200310290853.asp

    …why would a small hike back to the successful Clinton rates that paid down the deficit?