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Stagflation – Another Blast from the Past

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09.05.2022

“History doesn’t repeat itself but it often rhymes” is a quote attributed to Mark Twain. In the political and economic world, this maxim is proving true, as we are witnessing today.

The misery index is one such bit of history, dating back not that far, to the Jimmy Carter presidency of the late 1970s. Calculated by adding the unemployment and inflation rates together, the misery index “measures the degree of economic distress felt by everyday people.”

It is currently just over 12 percent, and that’s being generous given how the government calculates inflation. More on that later. The misery index reached 15 percent just after COVID hit and the country locked down, closing businesses left and right. During the Carter era it topped 20 percent.

Former House Speaker Newt Gingrich was recently interviewed on Fox News and brought up the misery index along with another golden oldie, stagflation. This is a term first used in the 1960s in the United Kingdom, describing a period of a stagnating economy along with rampant inflation, hence the coined term.

Various definitions have been applied to stagflation. Investopedia describes, “Stagflation can be alternatively defined as a period of inflation combined with a decline in the gross domestic product (GDP).” Former Speaker Newt also used the term in his Fox News interview, tying them both together:

We lived through this with Jimmy Carter. It ended up being called stagflation and people ate it up. The unemployment rate and the inflation rate and turn it into the misery index by adding the two numbers together, we........

© American Thinker


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