A guest post by Benjamin Cole
To read a newspaper from 1984 is indeed to enter an Orwellian world, in which the right-wing was outraged at Paul Volcker…for continuing his war on inflation, having recently beaten inflation down from double digits.
This lead from a July 8, 1984 column by conservatives Rowland Evans and Robert Novak is worth framing: “When Paul Volcker and his central bank colleagues decide later this month whether to further tighten the screws on a dangerously deflationary economy, President Reagan’s policymakers will be offstage as impotent….”
Of course, the 1984 elections were up to bat.
Evans and Nowak continue, “The Federal Reserve’s staff…monomaniacal fear of resurgent inflation ignores sliding commodity prices which connote deflation rather than inflation.”
The column-penners darkly continue, “Their (tight-money) position is being pressed by Lyle Gramley, a former Fed staffer named to the board by Jimmy Carter in 1980.”
Here is the link btw, and the ink drawing of Evan and Nowak, innocently posed together like sure looks like gay lovers, is alone worth the visit.
And where is Ronald Reagan in this battle for looser money? Well, “Vice President Preston Martin, Reagan’s first Fed appointment…has courageously stood alone against the rest of the FOMC….”
The rate of inflation in 1984? It was 4.3 percent, annual average. The chart illustrates.
Of course, today’s inflation isn’t even half that rate, and hasn’t even been close to 4.3 percent in years. And the right-wing is apoplectic, if not hysterical about potential inflation.
But back to 1984: The real problem is then-Chairman Paul Volcker, originally an appointee of Jimmy Carter, say Evans and Novak, in their July 8 column. Volcker overlooks “today’s deflation that threatens small-business men and farmers and instead worries about tomorrow’s inflation that haunts Wall Street bond traders.” The columnists also say Volcker “exhibited his hauteur” to House Republicans at a recent conference.
Other than jaw-dropping entertainment, there is a purpose to reading antique newspapers. There was a time in the not-so-distant but conveniently forgotten past when moderate rates of inflation were not considered economic AIDS, and were in fact embraced by right-wing economists (Milton Friedman excepted).
And what was true then is still true today: Economists, despite their scrims of calculus and posturing of objectivity, are usually just making political arguments in drag.
Historinhas 