Karl Smith points out an important truth: All that matters is unemployment.
“The 1970s were definitely an era of stagflation and remembering that can help us see through a lot of the bad analysis we have today.
Scott is correct that we remember the 70s as an era of slow growth but indeed GDP growth was rapid. We remember the 70s as having a poor labor market, but as you can see the employment population ratio rose strongly during the 1970s. As much as during the boom era 1960s.
As the Carter administration was coming to a close the employment population ratio was at an all time high.
Not only did unemployment reach a post-war high during the 1970s but even during the best part of the 1970s it failed to fall below 6%, a value that had been near only associated with recessions in years past.
This is part of why I keep harping on unemployment, unemployment, unemployment.”
The charts and the rest make this a must read.
Inflation is very low right now, but nobody cares. People think this is a terrible economy because unemployment is so high.