Friday, June 10, 2011

Generation Gap

The new bugbear in economic circles is, apparently, inflation. Both Atrios and Digby think the war on workers is based on a false war on inflation, and they scratch their heads trying to figure out how come, and marvel at the machinery of falsehood Republicans must employ to pull the wool over our collective eyes once again.

Which just proves neither of them were alive or paying attention in the 1970's.

My memories of inflation are admittedly fuzzy, but it was the worst problem facing America after the Vietnam War. Milton Friedman rose to prominence denouncing it, and made his monetary policy virtually US economic policy (I can't say how much real influence he had in the halls of government, but he had a great deal among conservatives) by declaring it would bring a final end to inflation. Robert Lekachman established it as a permanent problem of capitalism. Paul Volcker finally brought it to heel under Reagan by raising interest rates until the economy slowed down enough for inflation to die (there is a reason there are no more usury laws in the states, or that such laws are effectively toothless. Inflation was the culprit. There was a time, for you who don't remember, when any interest rate above 10% was a violation of black letter law and impossible to charge. If the sky is the limit now, you can thank inflation and the only solution to it anyone could find. The Fed's interest rates went back down, but the statutes didn't revert.).

Inflation, for more than a decade, destroyed buying power and eroded incomes. Most of the reason women entered the work force was not empowerment, but inflation. It gradually but inevitably took two incomes to pay for what one had paid for all along. Inflation did that. When it ended, under Reagan, we got yuppies and "Beamers" and $2.00 coffee, and the current rage for possession above all things. Inflation laid the foundations of the economic world we live in today. And yes, it's true fighting inflation is fighting the last war, but to wonder why that is happening is to wonder why people still talk about Vietnam or MIA's or the struggle for civil rights. It may not be sound policy to worry about inflation, but to act like it is a chimera is to act like the lessons taken from World War II that lead to our standing army and a permanent military headquarters (the Pentagon was designed to be an archive, when after the war we returned to a non-standing army status) are equally mythical, simply because that war ended before many of us were born.


  1. Anonymous9:19 AM

    I was reminded of this:

    A few years ago there was a shining moment in that struggle. It seemed as if there was a real promise of hope for the poor -- both black and white -- through the poverty program. There were experiments, hopes, new beginnings. Then came the buildup in Vietnam, and I watched this program broken and eviscerated, as if it were some idle political plaything of a society gone mad on war, and I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube. So, I was increasingly compelled to see the war as an enemy of the poor and to attack it as such.

    Perhaps a more tragic recognition of reality took place when it became clear to me that the war was doing far more than devastating the hopes of the poor at home. It was sending their sons and their brothers and their husbands to fight and to die in extraordinarily high proportions relative to the rest of the population. We were taking the black young men who had been crippled by our society and sending them eight thousand miles away to guarantee liberties in Southeast Asia which they had not found in southwest Georgia and East Harlem. And so we have been repeatedly faced with the cruel irony of watching Negro and white boys on TV screens as they kill and die together for a nation that has been unable to seat them together in the same schools. And so we watch them in brutal solidarity burning the huts of a poor village, but we realize that they would hardly live on the same block in Chicago. I could not be silent in the face of such cruel manipulation of the poor...

    A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand, we are called to play the Good Samaritan on life's roadside, but that will be only an initial act. One day we must come to see that the whole Jericho Road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life's highway. True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.

    A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. With righteous indignation, it will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries, and say, "This is not just." It will look at our alliance with the landed gentry of South America and say, "This is not just." The Western arrogance of feeling that it has everything to teach others and nothing to learn from them is not just.

    Anthony McCarthy

  2. Rmj, I remember shopping for groceries in the 1970s as a frightening experience. I watched with alarm the rise in prices from week to week. Where would it all end? Beyond our income, I feared.

    Anthony, we kill the prophets and ignore their messages. And sadly, the revolution of values has not yet come.