How Bad Did It Get?
What The Great Inflation (1965 — 1982) Taught Us
Now in 2022, the U.S. is experiencing the highest inflation in 40 years, and the Fed is fighting back by raising funds rates continuously. The stock market is feeling the pain. The people who want to buy houses are feeling the pain. Companies are feeling the pain.
For a lot of us born after the 1980s, this inflation crisis is the first. But it is not the first for the United States. Between 1965 and 1982, the United States had runaway inflation up to about 15% — “The Great Inflation”. It was way worse than now. Many people tried and failed to turn the U.S. around until Paul Volcker became the chairman of the Federal Reserve, and did brave monetary policy changes.
History has been repeating itself. Not necessarily the policies themselves or the outcomes of policies are the same, but how humans think and react has been consistent.
In this article, I collected many interesting facts about the Great Inflation. My goal is to have an understanding of how the government and people went through the era, so we can equip ourselves with wisdom for the future.
At the same time, it is my way to pay tribute to Paul Volcker, the brave and lone hero in the U.S. monetary policy in the 1980s. Many prosperous years of the United States after the Great Inflation owe thanks to him.
