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The Great Inflation and Its Aftermath: The Past and Future of American Affluence
It’s a giant gap in our history. The Great Inflation, argues award-winning columnist Robert J. Samuelson in this provocative book, was the worst domestic policy blunder of the postwar era and played a crucial role in transforming American politics, economy, and everyday life–and yet its story is hardly remembered or appreciated. In these uncertain economic times, it is more imperative than ever that we understand what happened in the 1960s and 1970s, lest we be doomed to repeat our mistakes.
From 1960 to 1979, inflation rose from barely more than 1 percent to nearly 14 percent. It was the greatest peacetime inflationary spike in this nation’s history, and it had massive repercussions in every area of our lives. The direct consequences included Ronald Reagan’s election to the presidency in 1980, stagnation in living standards, and a growing belief–both in America and abroad–that the great-power status of the United States was ending. The Great Inflation and Its Aftermath traces the origins and rise of double-digit inflation and its fall in the brutal 1981-82 recession, engineered by the Federal Reserve under then-chairman Paul Volcker and with the staunch backing of Reagan.
But that is only half the story. The end of high inflation triggered economic and social changes that are still with us. The stock market and housing booms were both direct outcomes; American business became more productive–and also much less protective of workers; and globalization was encouraged.
We cannot understand today’s world, Samuelson contends, without understanding the Great Inflation and its aftermath. Nor can we prepare for the future unless we heed its lessons. This incisive and enlightening book will stand as the authoritative account of a watershed event of our times.
Praise for The Great Inflation and Its Aftermath
"Newsweek and Washington Post columnist Samuelson is one of the rare journalists who debates politics and economics with a healthy skepticism toward conventional wisdom. Politicians would do well to study [the errors] the past that teach that choosing quick fixes only delays and worsens the inevitable.” – Booklist
"If you want to understand the economic events of the last half century, you should read. . . Robert Samuelson's The Great Inflation and Its -- U.S News & World Report.
From 1960 to 1979, inflation rose from barely more than 1 percent to nearly 14 percent. It was the greatest peacetime inflationary spike in this nation’s history, and it had massive repercussions in every area of our lives. The direct consequences included Ronald Reagan’s election to the presidency in 1980, stagnation in living standards, and a growing belief–both in America and abroad–that the great-power status of the United States was ending. The Great Inflation and Its Aftermath traces the origins and rise of double-digit inflation and its fall in the brutal 1981-82 recession, engineered by the Federal Reserve under then-chairman Paul Volcker and with the staunch backing of Reagan.
But that is only half the story. The end of high inflation triggered economic and social changes that are still with us. The stock market and housing booms were both direct outcomes; American business became more productive–and also much less protective of workers; and globalization was encouraged.
We cannot understand today’s world, Samuelson contends, without understanding the Great Inflation and its aftermath. Nor can we prepare for the future unless we heed its lessons. This incisive and enlightening book will stand as the authoritative account of a watershed event of our times.
Praise for The Great Inflation and Its Aftermath
"Newsweek and Washington Post columnist Samuelson is one of the rare journalists who debates politics and economics with a healthy skepticism toward conventional wisdom. Politicians would do well to study [the errors] the past that teach that choosing quick fixes only delays and worsens the inevitable.” – Booklist
"If you want to understand the economic events of the last half century, you should read. . . Robert Samuelson's The Great Inflation and Its -- U.S News & World Report.
336 pages, Hardcover
First published January 1, 2008
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Displaying 1 - 30 of 42 reviews
October 13, 2011
I don't like Reaganomics. I don't like the capitalist world that it created, with its massive and absurd inequalities in rewards for labor. I don't like the idea of medicine for profit, or the notion that people *should* retire at a give age willy-nilly.
So I was predisposed to dislike this book because it extols the risk/reward rules that I so frown on. I ended up not disliking the book, though I still dislike the system it praises. Samuelson sings the conservative aria that entitlement spending must come down, must must must, or the sky will fall and *cue horror movie music* profits will shrink!!! NOOOOOO say it isn't so!!!! Profits *sob* won't go to the investors anymore, no no not so much as a billion even, so they can consume more and, oh yeah, invest more to make more *salacious slurping sounds* profits!!!
Yeah, well, welcome to my world, investors. My income has gone down to zero, and I'm ineligible for unemployment "insurance" because employers have the right to deny it to you, and medical insurance? What's that? All because vampires getting millions in bonuses invented a creative way to snatch even bigger gobs of taxpayer money by throwing themselves a recession! (Luckily for me, the personal consequences are mitigated by my family situation, but if they had not been, I wouldn't be on this computer right now, I'd be on the street.)
So I am utterly out of sympathy with this tome's central assumption...that profits for the few belong solely to the few...yet the author makes some very good points. His analysis of the global warming problem is cogent and probably correct: Ain't gettin' solved, no one wants to pay the large and ever-growing price. Health care costs are, undoubtedly, out of control. Hey...anybody notice that there are (for-profit) insurance companies and hospital groups out there, paying executives tasty-big salaries that have to grow, and be earned somehow? Hmmm.
Where I absolutely march with the author is in his abhorrence for inflation, and the necessity of preventing it from recrudescing. Inflation amounts to a large tax on working people. What you get in your pay envelope has already lost some value by the time you get the money into your bank (for a fee, the size of which goes up as your balance goes down, hmmm). The nasty recession I lived through as a young worker was extremely unpleasant. It killed inflation, and so should be praised. Then came the idiot consumption-fest that's brought us to the place we are now.
Why is there no force in the public discourse saying "There is such a thing as 'enough' in every area of life, INCLUDING MONEY AND PROFITS"? Only things that make the least and the last among us safer, better off, more secure, are targets for the "enough" concept. Why is that? I suspect it's because the greedy mo-fos who have the commanding heights of the economy to themselves like it that way. No individual should have a billion dollars in assets. There is simply no conceivable justification for that kind of wealth in private hands. None. So hand it over. An extra billion in, say, Microsoft stocks in the hands of the fools at the Treasury is better than in the hands of Bill Gates. All of us are smarter than any one of us.
Oh well, I am not likely to be appointed to a government position, am I? Not with my confiscatory bent. So y'all're safe.
So far.
So I was predisposed to dislike this book because it extols the risk/reward rules that I so frown on. I ended up not disliking the book, though I still dislike the system it praises. Samuelson sings the conservative aria that entitlement spending must come down, must must must, or the sky will fall and *cue horror movie music* profits will shrink!!! NOOOOOO say it isn't so!!!! Profits *sob* won't go to the investors anymore, no no not so much as a billion even, so they can consume more and, oh yeah, invest more to make more *salacious slurping sounds* profits!!!
Yeah, well, welcome to my world, investors. My income has gone down to zero, and I'm ineligible for unemployment "insurance" because employers have the right to deny it to you, and medical insurance? What's that? All because vampires getting millions in bonuses invented a creative way to snatch even bigger gobs of taxpayer money by throwing themselves a recession! (Luckily for me, the personal consequences are mitigated by my family situation, but if they had not been, I wouldn't be on this computer right now, I'd be on the street.)
So I am utterly out of sympathy with this tome's central assumption...that profits for the few belong solely to the few...yet the author makes some very good points. His analysis of the global warming problem is cogent and probably correct: Ain't gettin' solved, no one wants to pay the large and ever-growing price. Health care costs are, undoubtedly, out of control. Hey...anybody notice that there are (for-profit) insurance companies and hospital groups out there, paying executives tasty-big salaries that have to grow, and be earned somehow? Hmmm.
Where I absolutely march with the author is in his abhorrence for inflation, and the necessity of preventing it from recrudescing. Inflation amounts to a large tax on working people. What you get in your pay envelope has already lost some value by the time you get the money into your bank (for a fee, the size of which goes up as your balance goes down, hmmm). The nasty recession I lived through as a young worker was extremely unpleasant. It killed inflation, and so should be praised. Then came the idiot consumption-fest that's brought us to the place we are now.
Why is there no force in the public discourse saying "There is such a thing as 'enough' in every area of life, INCLUDING MONEY AND PROFITS"? Only things that make the least and the last among us safer, better off, more secure, are targets for the "enough" concept. Why is that? I suspect it's because the greedy mo-fos who have the commanding heights of the economy to themselves like it that way. No individual should have a billion dollars in assets. There is simply no conceivable justification for that kind of wealth in private hands. None. So hand it over. An extra billion in, say, Microsoft stocks in the hands of the fools at the Treasury is better than in the hands of Bill Gates. All of us are smarter than any one of us.
Oh well, I am not likely to be appointed to a government position, am I? Not with my confiscatory bent. So y'all're safe.
So far.
August 10, 2022
First 2/3 was excellent. Last bit went a little off on a tangent in my opinion.
September 6, 2022
Very relevant read specially in today’s world. You learn a lot from this book, but it is a bit repetitive and feels like author goes of topic a bit sometimes.
May 29, 2009
I'm a little torn on this book. As some reviewers have pointed out, it's already out of date: like other economist, the author fails to predict the devastating economic severity of the subprime debacle in his mono focus on the perils of inflation. But for those of us born after 1965, The Great Inflation and Its Aftermath presents the history of the inflationary '70s in a clear, intelligible format that's easy to digest (not so of many econ books).
Robert J. Samuelson weaves a good tale as he traces the rise and fall of double-digit inflation and the brutal recessions that followed. He argues that this massive spike in inflation was due not to external forces (war in Vietnam, oil prices) but because of a series of domestic policy blunders made by Republicans and Democrats alike. Finally reigned in by Red chairman Paul Volcker and President Reagan, this inflationary spiral triggered massive economic and social changes.
My beef is that he's a little too quick to defend the fallout from what Yale political scientist Jacok Hacker calls the "great risk shift": corporations shifting risk to individuals rather than the post WWII (implicit) promise of a steady paycheck and a pension. Samuelson rails against "entitlement" and, while he seems to regret the personal instability caused by this shift, he deems it a necessary evil and cautions that the former system wasn't all roses, either.
Samuelson contends that we cannot understand the pressures facing today's world without understanding the Great Inflation and it's aftermath. I would agree. It's an enlightening book for those of us young enough not to remember the crippling effects of rapid inflation - and for those interested in the future of American affluence.
Robert J. Samuelson weaves a good tale as he traces the rise and fall of double-digit inflation and the brutal recessions that followed. He argues that this massive spike in inflation was due not to external forces (war in Vietnam, oil prices) but because of a series of domestic policy blunders made by Republicans and Democrats alike. Finally reigned in by Red chairman Paul Volcker and President Reagan, this inflationary spiral triggered massive economic and social changes.
My beef is that he's a little too quick to defend the fallout from what Yale political scientist Jacok Hacker calls the "great risk shift": corporations shifting risk to individuals rather than the post WWII (implicit) promise of a steady paycheck and a pension. Samuelson rails against "entitlement" and, while he seems to regret the personal instability caused by this shift, he deems it a necessary evil and cautions that the former system wasn't all roses, either.
Samuelson contends that we cannot understand the pressures facing today's world without understanding the Great Inflation and it's aftermath. I would agree. It's an enlightening book for those of us young enough not to remember the crippling effects of rapid inflation - and for those interested in the future of American affluence.
February 2, 2009
This book suffers from bad timing. Issued early in 208, it has already been overtaken by events. It shows I suppose the inability of economists to foresee the future.
When this book came out we were already in our current recession/depression, although that was not yet clear. The author was dimly aware of the sub-prime crisis but obviously could not imagine the way it was to bring down the entire world economy, wiping out trillions of dollars of accumulated wealth, throwing millions out of work and endangering the entire international financial structure.
In his final chapter, entitled "The Future of Affluence" the author looks at what he considered the main economic challenges of the future. The sub-prime crisis is relegated to a five-line footnote on page 206, framed mainly in terms of CEO compensation packages.
A few pages later, Samuelson does devote a paragraph to the risks of "credit that is mediated less through banks and more through securities." But he does not mention the fact that so many of these securities would shortly be demonstrated to be "toxic" or worthless.
Is this a cheap shot, criticizing a book for failing to foresee the future? I hope not. Some economists did see the coming storm, although few predicted its severity. However a book that uses the past to peer into the future, as this one does, opens itself to criticism if it fails to predict an event as huge as the current crisis.
Later Samuelson asks, "Have we entered, or are we about to enter, an era of 'affluent deprivation,' which I define as a period of slower economic growth that doesn't satisfy what people regard as reasonable private wants and public needs?"
No, we were about to enter a period of calamitious economic collapse that has plunged people in dire circumstances in which many are unable to satisfy even basic wants and needs.
An author needs luck and Samuelson suffers from bad luck in bringing this book out at precisely the wrong time. But it also reflects the economic thinking typified by Alan Greenspan who regarded inflation as the overarching economic enemy while neglecting to deal with the myriad other threats building just over the horizon.
When this book came out we were already in our current recession/depression, although that was not yet clear. The author was dimly aware of the sub-prime crisis but obviously could not imagine the way it was to bring down the entire world economy, wiping out trillions of dollars of accumulated wealth, throwing millions out of work and endangering the entire international financial structure.
In his final chapter, entitled "The Future of Affluence" the author looks at what he considered the main economic challenges of the future. The sub-prime crisis is relegated to a five-line footnote on page 206, framed mainly in terms of CEO compensation packages.
A few pages later, Samuelson does devote a paragraph to the risks of "credit that is mediated less through banks and more through securities." But he does not mention the fact that so many of these securities would shortly be demonstrated to be "toxic" or worthless.
Is this a cheap shot, criticizing a book for failing to foresee the future? I hope not. Some economists did see the coming storm, although few predicted its severity. However a book that uses the past to peer into the future, as this one does, opens itself to criticism if it fails to predict an event as huge as the current crisis.
Later Samuelson asks, "Have we entered, or are we about to enter, an era of 'affluent deprivation,' which I define as a period of slower economic growth that doesn't satisfy what people regard as reasonable private wants and public needs?"
No, we were about to enter a period of calamitious economic collapse that has plunged people in dire circumstances in which many are unable to satisfy even basic wants and needs.
An author needs luck and Samuelson suffers from bad luck in bringing this book out at precisely the wrong time. But it also reflects the economic thinking typified by Alan Greenspan who regarded inflation as the overarching economic enemy while neglecting to deal with the myriad other threats building just over the horizon.
March 6, 2011
This is a very balanced overview of the economic history of the US since WWII and the crucial role that inflation has played over the last 65 years. Samuelson argues convincingly that Reagan's support of Paul Volcker's tight money policy was his single largest accomplishment in domestic policy--not tax or spending policy--that set the stage for the economic recovery of the 80s and 90s.
Though I don't agree with all of his views, I credit Samuelson with presenting a fair, non-polemical accounting of the challenges facing the US in economic policy. This book does a particularly good job of showing how the obsession with full employment that developed in the 50s and 60s created a mindset in politicians and regulators that prevented the Federal Reserve from using the tools at its disposal to keep inflation in check.
Another important take away from this book is that while the inflation of the 70s is commonly attributed as a policy failure of the Carter administration, this was a problem that had been brewing for several decades which both Democratic and Republican presidents had struggled with.
In calm and reasoned prose, Samuelson discusses the need to reform entitlements pointing out that the welfare state "has in part created a reverse Robin Hood effect: It sometimes transfers income from the struggling young to the relaxed old."
For anyone who wants a wider understanding of the historical context of our current debates on economic policy, this is a very worthwhile and relatively quick read.
Though I don't agree with all of his views, I credit Samuelson with presenting a fair, non-polemical accounting of the challenges facing the US in economic policy. This book does a particularly good job of showing how the obsession with full employment that developed in the 50s and 60s created a mindset in politicians and regulators that prevented the Federal Reserve from using the tools at its disposal to keep inflation in check.
Another important take away from this book is that while the inflation of the 70s is commonly attributed as a policy failure of the Carter administration, this was a problem that had been brewing for several decades which both Democratic and Republican presidents had struggled with.
In calm and reasoned prose, Samuelson discusses the need to reform entitlements pointing out that the welfare state "has in part created a reverse Robin Hood effect: It sometimes transfers income from the struggling young to the relaxed old."
For anyone who wants a wider understanding of the historical context of our current debates on economic policy, this is a very worthwhile and relatively quick read.
January 10, 2010
"What succeeds and would be popular in the long run is often unpopular in the short run. What's popular in the short run often fails in the long run." -
"As we weigh our economic prospects, we need to recall the lessons of the Great Inflation. Its continuing significance is that it was a self-inflicted wound: something we did to ourselves with the best of intentions and on the most impeccable of advice. Its intellectual godfathers were without exception men of impressive intelligence. They were credentialed by some of the nation's outstanding universities: Yale, MIT, Harvard, Princeton. But their high intellectual standing did not make their ideas any less impractial or destructive. Scholars can have tunnel vision, constricted by their own political or personal agendas. Like politicians, they can also yearn for the power and celebrity of the public arena. Even if their intentions are pure, their ideas may be mistaken. Academic pedigree alone is no guarantor of useful knowledge and wisdom. Skepticism ought to qualify and restrain our reformist impulses." Pg. 207
"As we weigh our economic prospects, we need to recall the lessons of the Great Inflation. Its continuing significance is that it was a self-inflicted wound: something we did to ourselves with the best of intentions and on the most impeccable of advice. Its intellectual godfathers were without exception men of impressive intelligence. They were credentialed by some of the nation's outstanding universities: Yale, MIT, Harvard, Princeton. But their high intellectual standing did not make their ideas any less impractial or destructive. Scholars can have tunnel vision, constricted by their own political or personal agendas. Like politicians, they can also yearn for the power and celebrity of the public arena. Even if their intentions are pure, their ideas may be mistaken. Academic pedigree alone is no guarantor of useful knowledge and wisdom. Skepticism ought to qualify and restrain our reformist impulses." Pg. 207
August 29, 2021
Interesting read - learned the problem with the gold standard and the problem of our current system of fiat currency. Given that large-scale inflation at this point seems inevitable it is probably a timely read. He also makes a good case that inflation is one of the largest concerns in modern US history (according to polling it was the largest concern for about a decade) but US history tends to focus more prominently on Vietnam and the Great Society... Just interesting that while we focus on those two moments more, the people of that time seemed to care more about runaway inflation.
Read
July 30, 2011The book is a fabulous read to understand the events of the seventies and inflation fear that drives today's central banks. The book's utility is maximum when it is narrating what happened at the time and how various parties reacted. However, the author almost completely loses it whenever he is trying to ascertain how critical what happened then has been responsible for all the good later. The book completely degenerates towards the end when it tries to square everything by making recent events not the fault of administrators and policies he loves but something vague which is not something he hates (Keynesian policies). All in all, as long as one limits oneself to learning the economic history, it is a good book.
September 25, 2022
In 2022, this is a time read. With inflation raging above 8%, it is relevant to read about the 1980s when inflation was high.
The book is well organized, with the background situation that led to high inflation, the effects of high inflation and how it was controlled.
This is a forgotten chapter of American economic history that everyone interested in Finance should read.
The book is well organized, with the background situation that led to high inflation, the effects of high inflation and how it was controlled.
This is a forgotten chapter of American economic history that everyone interested in Finance should read.
March 12, 2023
Robert Samuelson doesn't have the journalistic rigor of a guy like William Greider (from whom Samuelson heavily cribs and summarizes), but this is still a decent overview of postwar inflation cycles and how Reagan-Volcker policy completely shifted our notion of acceptable risk to combat inflation. I still think Grieder's excellent SECRETS OF THE TEMPLE (which I'm almost finished with) is a better volume if you really want to understand economic reality (and specifically how 1980s Fed policy created the dodgy economic system we live in today).
April 17, 2023
This book is a must read for anybody who wants to understand the mentality of the Federal Reserve in 2022 and 2023. There are very few events in US history that are truly unique, but the Great Inflation of 1965 to 1982 was one of them. Never before nor since has the United States experienced such an extended period of high inflation. This book explains many of the errors made by the Federal Reserve in the late 1960s and early 1970s and Paul Volcker finally regained credibility for the Federal Reserve This is an absolute must read for investors you want to understand what is happening in 2023.
January 4, 2024
Central argument I believe to be Globalization driven by the Volcker/Reagan inflation. It also helped me understand central economic themes of each decade:
1950s - Economic boom driven by delayed adoption of new tech from WWII.
1960s - Economic boom; new economic ideas government could control business cycle
1970s - Inflation, consequence of the full employment mandate
1980s - Volcker/Reagan crushed inflation
1950s - Economic boom driven by delayed adoption of new tech from WWII.
1960s - Economic boom; new economic ideas government could control business cycle
1970s - Inflation, consequence of the full employment mandate
1980s - Volcker/Reagan crushed inflation
July 12, 2020
I learned a lot from this book. It is not hard to read or retain. It helped put much of my wage earning life into historical perspective.
The relationship between inflation, wages, taxes, banks, and productivity and how both politicians and economists continue to mess things up when the historical lessons are available to them.
The relationship between inflation, wages, taxes, banks, and productivity and how both politicians and economists continue to mess things up when the historical lessons are available to them.
May 15, 2022
My dad loaned me this book and even though I tried for months to get through it, it just didn't hold my attention. I haven't been able to find an audio version to try to finish it quickly. I finished about half and I'm moving on. It was an interesting topic since we are going through terrible inflation currently as well.
May 22, 2021
The first half of this book was an excellent historical look at the rise and fall of inflation in the United States last century. But the second half departed from that to talk about other economic issues that felt disconnected and more like a political agenda.
June 22, 2025
Excellent recap of causes of the inflationary period in the 1970's, why it happened and long-term impacts. Well written, easy to read. Highlights the critical importance of FED independence and political leadership (for good and bad).
May 19, 2021
Excellent read. Great historical perspective with modern time application.
October 9, 2022
Really great popular overview of the Great Inflation, policy response, and lingering effects today.
February 25, 2023
A good book about inflation and its effect on us.
December 20, 2023
Solid book. I liked that he talked about the inflation of the 70s/80s, which is what I was looking for. He kind of went on a tangent at the end, but the majority of this book was good.
April 21, 2025
Despite de neoclassic ideological charge, it is a well explained book.
March 31, 2021
Book Review
5 stars
"Historians don't do Economics and economists don't do History." Appalling
1. This book is very easy to read. 3 pages go by like 1.
Even though the the book is 248 pages of text, it can be read in about two afternoons.
There is also a glossary at the back to help readers with terms with which they may not be familiar (not likely for many readers of this book).
2. (p.7) I really hate terms like "unspoken rule" and "unwritten agreement" in the context of economic arrangements of a large scale (as in, between governments and business). What evidence did Samuelson have to say that companies "pledged to raise living standards in lieu of having the business cycle minimized by government."? Could it have been explained another way? Or was it even necessary to say? I was skeptical at the beginning of the book, but that one weak spot was no indication of the wonderful things that were to come throughout the rest of the book.
3. (p.17). The more things change, the more they stay the same. I can see that (1), the New York Times was a rubbish paper 40 years ago the same way it is today and (2) that people were enthused about synthetic fuels 30 years ago-- and they didn't amount to much then the same way that they might not amount to much now.
4. Samuelson gives a succint explanation of the Savings and Loan Crisis of these many years ago-- the best I've ever read compressed into a small amount of space. Many have tried to rewrite the incident as a drama involving bad (Repubican) businessmen vs. innocent depositors. In reality, it was something as simple as differentials between the rates paid on deposits and the rates received for mortgages-- and all this can be attributed to excessive inflation.
5. People like (the disingenuous) Paul Krugman have selectively chosen their historical evidence to try to convince readers that Monetarism never works (blah, blah, blah). But this (very neutral) author demonstrated that the worst inflationary problems were brought on by Keynesian economists (1) and (2) how esoteric academic ideas can start in academia and spill over into public policy issues with disastrous results. (Heather MacDonald has tried to address this point in a book that she has written, but Samuelson's demonstration was much better and more effortless. Thomas Sowell has also taken this point up at length in some of his writings.)
6. Wow! People have been trying to disinvent the business cycle for a long time. One gets the impression that they started in the 60s (the source of nearly all of the most destructive ideas in the history of the US Republic).
7. The micromanagement/ mismanagement was not specific to either Republican or Democratic administrations. (This is in keeping with Samuelson's evenhanded/ neutral way of describing events.)
8. In some ways, Samuelson expands on the ideas taken up by Milton Friedman in "Capitalism and Freedom," as in, "what happens when you have some people who have control of things that they don't really understand?" But the sheer stupidity of the elected officials through all the administrations surveyed is just beyond words.
This book is well worth the price of purchasing it new (I didn't, but would if I had to do it all over again).
5 stars
"Historians don't do Economics and economists don't do History." Appalling
1. This book is very easy to read. 3 pages go by like 1.
Even though the the book is 248 pages of text, it can be read in about two afternoons.
There is also a glossary at the back to help readers with terms with which they may not be familiar (not likely for many readers of this book).
2. (p.7) I really hate terms like "unspoken rule" and "unwritten agreement" in the context of economic arrangements of a large scale (as in, between governments and business). What evidence did Samuelson have to say that companies "pledged to raise living standards in lieu of having the business cycle minimized by government."? Could it have been explained another way? Or was it even necessary to say? I was skeptical at the beginning of the book, but that one weak spot was no indication of the wonderful things that were to come throughout the rest of the book.
3. (p.17). The more things change, the more they stay the same. I can see that (1), the New York Times was a rubbish paper 40 years ago the same way it is today and (2) that people were enthused about synthetic fuels 30 years ago-- and they didn't amount to much then the same way that they might not amount to much now.
4. Samuelson gives a succint explanation of the Savings and Loan Crisis of these many years ago-- the best I've ever read compressed into a small amount of space. Many have tried to rewrite the incident as a drama involving bad (Repubican) businessmen vs. innocent depositors. In reality, it was something as simple as differentials between the rates paid on deposits and the rates received for mortgages-- and all this can be attributed to excessive inflation.
5. People like (the disingenuous) Paul Krugman have selectively chosen their historical evidence to try to convince readers that Monetarism never works (blah, blah, blah). But this (very neutral) author demonstrated that the worst inflationary problems were brought on by Keynesian economists (1) and (2) how esoteric academic ideas can start in academia and spill over into public policy issues with disastrous results. (Heather MacDonald has tried to address this point in a book that she has written, but Samuelson's demonstration was much better and more effortless. Thomas Sowell has also taken this point up at length in some of his writings.)
6. Wow! People have been trying to disinvent the business cycle for a long time. One gets the impression that they started in the 60s (the source of nearly all of the most destructive ideas in the history of the US Republic).
7. The micromanagement/ mismanagement was not specific to either Republican or Democratic administrations. (This is in keeping with Samuelson's evenhanded/ neutral way of describing events.)
8. In some ways, Samuelson expands on the ideas taken up by Milton Friedman in "Capitalism and Freedom," as in, "what happens when you have some people who have control of things that they don't really understand?" But the sheer stupidity of the elected officials through all the administrations surveyed is just beyond words.
This book is well worth the price of purchasing it new (I didn't, but would if I had to do it all over again).
November 18, 2012
A Primer for the Fiscal Cliff
Robert Samuelson is the everyday economist. His background as a journalist means he's a better communicator than most economists. But that's not why you should read THE GREAT INFLATION. You should read THE GREAT INFLATION because soon enough we'll all wish we understood inflation better.
Perhaps you have heard: We're all on bus that we're not sure has any brakes left. A fiscal cliff awaits. If the American economy goes off the fiscal cliff, it seems likely that inflation may be one of several nasty elements waiting for us -- eventually -- at the bottom.
But in some ways, inflation may be more likely if we do avoid going off the financial cliff. As the world's economy improves, the rest of the world is no longer going to be content with essentially allowing America to use its money for free.
Either way, that stink on the bus isn't your neighbor. It is our old nemesis of inflation. There is a whole generation of Americans who think our government has figured out how to control inflation. It hasn't. Samuelson's book is a good reminder.
Review by Dustin Hill, author of The Chinese Banker The Chinese Banker
Robert Samuelson is the everyday economist. His background as a journalist means he's a better communicator than most economists. But that's not why you should read THE GREAT INFLATION. You should read THE GREAT INFLATION because soon enough we'll all wish we understood inflation better.
Perhaps you have heard: We're all on bus that we're not sure has any brakes left. A fiscal cliff awaits. If the American economy goes off the fiscal cliff, it seems likely that inflation may be one of several nasty elements waiting for us -- eventually -- at the bottom.
But in some ways, inflation may be more likely if we do avoid going off the financial cliff. As the world's economy improves, the rest of the world is no longer going to be content with essentially allowing America to use its money for free.
Either way, that stink on the bus isn't your neighbor. It is our old nemesis of inflation. There is a whole generation of Americans who think our government has figured out how to control inflation. It hasn't. Samuelson's book is a good reminder.
Review by Dustin Hill, author of The Chinese Banker The Chinese Banker
April 29, 2009
Very interesting history. Basic premise is that the inflationary period of the 1970s impacted global perception and history as much as the great depression. The fault of this inflationary period goes way beyond Carter to Johnson who first imposed wage and price controls. These were supported and strengthened through Nixon and Ford administrations. Finally, under Carton inflation grew above 10%. The cause was not oil or food prices, but government policy that cause the inflation. The great inflation was ended by Paul Volcker (head of Federal Reserve) with the support of Reagan by severly tightening money supply which caused the 1980-1981 recession. Prior to that, the Fed had supported the Presidents with loose money supply to help employment rates. Since this time, inflation has not been more than 2% per year.
Samuelson's obvious concern is with current USA policy. USA economic growth is critical to people's lifestyle and happyness. There are several issues he believes could significantly slow USA growth - health care, global warming, and taxes.
Samuelson's obvious concern is with current USA policy. USA economic growth is critical to people's lifestyle and happyness. There are several issues he believes could significantly slow USA growth - health care, global warming, and taxes.
January 11, 2010
Detailed economic analysis
Recessionary times have led many people to re-evaluate their long-held beliefs about the financial system. His history-based economic analysis makes journalist Robert Samuelson’s fresh investigation of the insidious effects of inflation especially interesting. He covers the advent of inflation in the U.S. in the 1960s, and explains how it changed the nation’s economic thought and vision. Like a mutated gene, inflation assumed a life of its own and spawned the “new economy.” Samuelson presents a provocative, if debatable, argument about economics and prosperity. getAbstract recommends this detailed, advanced economics report and assures readers who stick with it that it will reward them with deeper understanding and fresh insights.
To learn more about this book, check out the following Web page: http://www.getabstract.com/summary/12...
Recessionary times have led many people to re-evaluate their long-held beliefs about the financial system. His history-based economic analysis makes journalist Robert Samuelson’s fresh investigation of the insidious effects of inflation especially interesting. He covers the advent of inflation in the U.S. in the 1960s, and explains how it changed the nation’s economic thought and vision. Like a mutated gene, inflation assumed a life of its own and spawned the “new economy.” Samuelson presents a provocative, if debatable, argument about economics and prosperity. getAbstract recommends this detailed, advanced economics report and assures readers who stick with it that it will reward them with deeper understanding and fresh insights.
To learn more about this book, check out the following Web page: http://www.getabstract.com/summary/12...
June 5, 2009
I was hoping for details on who did what to create and then squelch the high inflation in the USA in the '70s. But this book was short on detail and contained too much opinion and conjecture.
It was useful in a minimal way, by presenting a theory/point of view (the '70s inflation was caused by economists' and political leaders' mistaken belief in their ability to increase employment by choosing a moderately higher inflation level along the Phillips curve).
The reader can evaluate that theory by reading more books etc. - which is not anywhere near as useful as it would have been if Mr. Samuelson had devoted many more of his pages to showing the reader the historical evidence supporting the book's central point.
It was useful in a minimal way, by presenting a theory/point of view (the '70s inflation was caused by economists' and political leaders' mistaken belief in their ability to increase employment by choosing a moderately higher inflation level along the Phillips curve).
The reader can evaluate that theory by reading more books etc. - which is not anywhere near as useful as it would have been if Mr. Samuelson had devoted many more of his pages to showing the reader the historical evidence supporting the book's central point.
May 23, 2009
Governmental policies in the 1960's and 1970's led to double-digit inflation, which Reagan and Volcker managed to vanquish, but only through a severe recession in 1981-1982. This transformed our economy and led to the prosperity of the next two decades. Samuelson believes that we are at another crucial juncture and the decisions our country makes now could transform capitalism in America yet again. He gave me much to think about and broadened my understanding of our recent economic history. This is the most important book I've read this year.
November 11, 2020
A really interesting exploration of the US economic system in the 1970's/1980's. Especially good was the argument that energy (particularly oil) was not as much a factor in the increased inflation as policymakers believed it to be at the time. Where the books falters is in the second half where Samuelson starts to expound on his own economic and political beliefs, which are: a) really very basic; and b) not well explained or defended. Read the first half about the history and economics of the Great Inflation; skip the second half.
January 5, 2016
This book was a quick read, but that's because it doesn't have as much to say as it should. Samuelson picked out a good trend and had some good ideas about it, but suffers from "I don't have enough to say, so I'll repeat myself" syndrome. Instead, we should get more about why inflation is so bad, how expectations of inflation affect people's behavior, and what kinds of things are good or bad to do with your money when inflation is high or low.
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