The economic crisis of the 1970s was a disaster for multiple presidents. It could be worse for Trump.
by Joshua Zeitz
Politico
In the leadup to President Donald Trump’s “Liberation Day” on Wednesday — when he announced sweeping new tariffs on all the United States’ international trading partners — economists and financial analysts started using a word that will give hives to those of you over the age of 60.
Stagflation — “the s-word rippling through Wall Street and Main Street,” as Axios put it earlier this week — is a calamitous anomaly whereby the economy manifests low growth and high inflation at the same time. Anyone who remembers the 1970s will recall that it caused an economic crisis in the United States, ushering in a turbulent era of high prices, interest rates and unemployment — and considerable instability and pain.
Today, experts are worried that Trump’s new tariff regime — which is all but certain to raise prices — coupled with a tight labor market could return us to that era. As a researcher at Deutsche Bank recently observed, “The data is continuing to support the narrative of weaker growth and higher inflation, with market-based inflation expectations continuing to rise.”