Stagflation, energy crises, and ‘malaise’: The last time inflation was this high – By Zachary Halaschak (Washington Examiner) / April 17, 2022
The last time prices were increasing this quickly was in 1981 when Ronald Reagan was president, interest rates were near record highs, and the United States was embroiled in the Cold War.
The country has changed significantly since the Great Inflation of the 1970s and 1980s, and today’s inflationary bout is much different — but there are some similarities between now and 1981, the last time inflation hit 8.5%.
INFLATION WAS COMING DOWN IN 1981
The inflation more than four decades ago was much more severe than it is now. Inflation peaked in the spring of 1980 at a jaw-dropping 14.8% and subsequently began declining.
Desmond Lachman, a senior fellow at the American Enterprise Institute, pointed out that the inflation of the 1970s and 1980s was different than today in the level of severity and how much pain consumers experienced.
By 1981, inflation had been running above 2%, often much higher, for 15 years. The U.S. experienced multiple recessions and stagflation — that is, the combination of high inflation and high unemployment, a situation that top economists at the time had thought to be impossible.
