The Great Inflation and Its Aftermath

339 Pages·2009·4.37 MB·English

by  Robert J. Samuelson

T HE
GREAT
I N F L A T I ON
A ND ITS
A F T E R M A TH
THE PAST A ND FUTURE OF
AMERICAN AFFLUENCE
R O B E RT J.
S A M U E L S ON
NEWSWEEK AND WASHINGTON POST COLUMNIST
U.S.A. $26.00
Canada $30.00
I
t's a giant gap in our history. The Great Inflation,
argues award-winning columnist Robert J. Sam-
uelson in this provocative book, was the worst
domestic policy blunder of the postwar era and
played a crucial role in transforming American poli­
tics, 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 great­
est peacetime inflationary spike in this nation's his­
tory, and it had massive repercussions in every area of
our lives. The direct consequences included Ronald
Reagan's election to the presidency in 1980, stagna­
tion 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 reces­
sion, 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 protec­
tive 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 enlight­
ening book will stand as the authoritative account of a
watershed event of our times.
ROBERT J. SAMUELSON is a columnist for
Newsweek and The Washington Post. He began his jour­
nalism career as a reporter for the Post in 1969. He is
the author of The Good Life and Its Discontents: The
American Dream in the Age of Entitlement, ip^j-ipçy and
Untruth: Why the Conventional Wisdom Is (Almost Always)
Wrong, a collection of his columns. He lives in
Bethesda, Maryland, with his wife, Judy Herr. They
have three children.
Jacket design: Julie Metz Design
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Random House
New York, N.Y.
© 2008 by Random House, Inc.
Praise for Robert J. Samuelson's
THE GOOD LIFE AND ITS DISCONTENTS
The American Dream in the Age of Entitlement, ip^f—ippf
A New York Times Business Book Bestseller
"Original, intellectually sound and fun to read."
—MANCUR OLSON, The Wall Street Journal
"Shrewd and optimistic ... combines first-rate analysis with
persuasive historical, political and sociological insights."
—JAGDISH BHAGWATI, The New Republic
"A smart, balanced epitaph for an era—
with a few clues for what's ahead."
—ROBERT J. DOWLING, BusinessWeek
"Lucid [and] nonsectarian ... Samuelson traces how
the reasonable demand for progress has given way to
the excessive demand for perfection."
—ROBERT KUTTNER, The New York Times
ISBN 978-0-375-50548-5

ALSO BY ROBERT J. SAMUELSON
The Good Life and Its Discontents: The American
Dream in the Age of Entitlement, 1945-1995
Untruth: Why the Conventional Wisdom
Is (Almost Always) Wrong
THE
GREAT INFLATION
AND ITS
AFTERMATH
RANDOM HOUSE
NEW YORK
ROBERT J. SAMUELSON
THE
GREAT INFLATION
AND ITS
AFTERMATH
THE PAST AND FUTURE OF
AMERICAN AFFLUENCE
Copyright © 2008 by Robert J. Samuelson
All rights reserved.
Published in the United States by Random House,
an imprint of The Random House Publishing Group,
a division of Random House, Inc., New York.
RANDOM HOUSE and colophon are registered
trademarks of Random House, Inc.
LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
Samuelson, Robert J.
The great inflation and its aftermath : the past and
future of American affluence /
Robert J. Samuelson.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-375-50548-5
1. Inflation (Finance)—United States. 2. United States—Economic policy.
3. United States—Economic conditions. I. Tide.
HG540.S26 2008
332.4'10973—dc22 2008023468
Printed in the United States of America on acid-free paper
www.atrandom.com
24689753i
FIRST EDITION
Book design by Jessica Shatan Heslin/'Studio Shatan, Inc.