Deleted member 1487
Did you not read the quote, it says that right there and the oil shock caused the price for goods to rapidly rise because throughout the supply chain fuel cost more to move everything around. So the price for goods became prohibitive as a result and gridlocked the economy. There was no expanded productive capacity due to tax cuts, energy prices just fell when the 2nd oil shock ended. All tax cuts would have done in the continuation of oil price hikes is result in more money chasing that same restricted supply of goods. Increased production does nothing about fuel costs to get raw materials to factories and products to market.Yeah, no. That's not how inflation works. It's caused when the supply of goods does not keep up with the supply of money. The substantive increase in investment spending greatly expanded production capacity and reduced pricing power, limiting inflation - the aggregate supply of goods increased more rapidly than the supply of money.
https://en.wikipedia.org/wiki/1979_energy_crisis#United_States
The Jimmy Carter administration began a phased deregulation of oil prices on April 5, 1979, when the average price of crude oil was US$15.85 per barrel (42 US gallons (160 L)). Starting with the Iranian revolution, the price of crude oil rose to $39.50 per barrel over the next 12 months (its all-time highest real price until March 3, 2008.)[8] Deregulating domestic oil price controls allowed U.S. oil output to rise sharply from the large Prudhoe Bay fields, while oil imports fell sharply.
There was no Stagflation until the 1979 oil shock drove energy prices through the roof and people panicked again expecting a repeat of 1973. The price of oil in 2008 was a temporary spike caused by market manipulation, supply was never restricted, and if you'll remember we had a massive recession in 2008 which prevented inflation, because the economy was massively contracting. Within less than 5 months it had gone from $147 to $30.In the 1970s, had there not been rampant increased in money supply, there would have been no inflation - just a really bad recession - when people spend more on gas they spend less on clothes rather than spending on both. And to your point about oil, it went from $10/barrel in 1999 to $150 in 2008 during a period when the rate of inflation steadily declined. Sorry, your oil shock thesis is just wrong. It contributed a lot but to say its nothing more is just wrong.
Source proving that assertion?ERISA. In early 1970s they changed the rules and nature of legal liability as it related to investment managers. It opened up a whole range of investment opportunities for investment managers that included activist strategies and high yield bonds that gave investors the means to reform badly managed companies.
Not really at all. We didn't go on a diet, we have an oil shock, inflation wrecked the economy, but tappered off as the shock ended, but all the problems of deregulation caused a temporary spike followed by the 1987 market crash; then the economy limped along into the early 1990s when further deregulation and the internet hitting caused the Dot Com bubble to inflate and we rode that into 2000 when Bush inherited a recession; he then inflated a real estate bubble partially via cutting taxes again and deregulating that market and not having the SEC keep up with new speculations on Wall Street which resulted in the 2007-09 recession. That was masking the increasing problems with the economy and how the middle class was getting hollowed out by automation, out sourcing, computing, etc.By analogy, imagine a guy that weighs 400 pounds and goes on a diet. He later develops an eating disorder and dies of it, weighing 90lbs at his death. This issue isnt that he went on a diet when he was 400lbs. Same idea here.