Quote:
Originally Posted by JD Barleycorn
It was not the business cycle that put the speed limit at 55 mph (not really germane but I didn't like the 55 mph speed limit and the people agree with me), it was Carter...
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Yeah, that was quite a neat trick ol' Jimmuh pulled off, wasn't it? I mean, who knew the governor of Georgia had that kind of power? (You might want to rethink the accuracy of some of your sources before citing "facts.")
But while on the subject of Carter, it's fair to point out that it was more than just an unfortunately timed business cycle that destroyed his presidency. In 1978, he managed to exacerbate the already severe inflation/weak dollar problem by appointing perhaps the worst Fed chairman in history. (Although there are many worthy aspirants to that title!)
The following year, he was prevailed upon to task Paul Volcker with doing the heavy lifting necessary to break the back of inflation. But, of course, the situation had become so serious by then that it took almost three years to slay the inflation dragon.
It has long been my view that had he made the difficult decision to combat inflation early in his term, Carter's re-election chances would have been pretty good, because by 1980 we would have been experiencing an environment of disinflation and a strengthening dollar. He could have gotten the pain out of the way during the first two years of his term, and then would likely have enjoyed the political benefits of an improving economy by 1979-80.
It should also not be forgotten that the ascendency of the Soviet Union (not to mention Iran's new theocratic regime) was abetted by our easy money/weak dollar policies, which drove a rapid run-up in oil prices during the late 1970s.
What difference does it make now?
