In my continuing efforts to research the cause of the inflation of the 1970s, I have found the article Stagflation in the 1970s. This may put an over emphasis on Nixon as to what started it all, but I think it does add some valid points.

By 1971, pressures produced by the Vietnam War and federal social spending, coupled with the increase in foreign competition, pushed the inflation rate to 5 percent and unemployment to 6 percent. President Richard Nixon responded by increasing federal budget deficits and devaluing the dollar in an attempt to stimulate the economy and to make American goods more competitive overseas. Nixon also imposed a 90-day wage and price freeze, followed by a mandatory set of wage-price guidelines, and then, by voluntary controls. Inflation stayed at about 4 percent during the freeze, but once controls were lifted, inflation resumed its upward climb.

At least it does mention the pressures of the Vietnam War. I have blamed LBJ for refusing to inconvenience the civilian population by raising taxes. Raising taxes would have prevented the civilian population from tying up resources that civilians wanted to use in their daily lives. Increased taxes would have allowed LBJ to divert resources to the war effort without causing inflation. What he left as a result of his policies was the government competing against the private sector for the same resources. This is one of the situations that tends to cause inflation.

Of course, one should not forget the way that Richard Nixon’s administration continued the war, and even escalated it despite promises of winding it down.

Thinking of the economic situation of today, there is such underemployment and idle resources that the private sector is not using, that the same competition between the government and the private sector is not happening. Thus, unfortunately, <sarcasm>we can afford costly wars without creating inflation even though we cut taxes. Income inequality has a neat way of keeping the money out of the hands of the people who would actually need to spend that money and cause inflation if we didn’t cut back on the wars. So it all works out in the end.</sarcasm>

In an effort to find out if I was crazy to think that our inflation problems of the 1970s began before the OPEC oil shocks, I have come across the article Whipping Stagflation. I am not attesting to the truth of this article, but this is the way I seem to remember it.

By 1971, pressures produced by the Vietnam War and federal social spending, coupled with the increase in foreign competition, pushed the inflation rate to 5 percent and unemployment to 6 percent. President Richard Nixon responded by increasing federal budget deficits and devaluing the dollar in an attempt to stimulate the economy and to make American goods more competitive overseas. Nixon also imposed a 90-day wage and price freeze, followed by a mandatory set of wage-price guidelines, and then, by voluntary controls. Inflation stayed at about 4 percent during the freeze, but once controls were lifted, inflation resumed its upward climb.

Uproxx has the article Donald Trump Kicked Off The Weekend By Taking To Twitter To Wildly Claim That Obama Wiretapped The Phones In Trump Tower.

On Saturday, Donald Trump started his day by tweeting that he believes President Obama wiretapped his phones in Trump Tower just before his election victory in November. Citing no evidence, Trump called it a Nixon-Watergate level situation and compared it to McCarthyism.

No evidence? Well do you want some stinkin’ evidence? There is an interesting article that Donald Trump may have read before making his claims. Talking Points Memo has the article What The CIA and FBI Knew About Trump Before 2016.

It seems quite probable that as Trump moved closer to the presidency in the early months of 2016, alarm bells started to go off in the FBI and the CIA, as the relevance of business partnerships with Sater and reliance on capital out of the former Soviet Union suddenly became dramatically more relevant. Again, as I said, as long as Donald Trump was just Donald Trump this didn’t matter that much. There’s plenty of dirty money sloshing around the New York real estate world. But when it started to seem plausible that he might become the next President, this would start to be a matter of great concern.

Truthdig has the article The Deep State’s Hatred of Trump Is Not the Same as Yours.

Perhaps I am going to go beyond fair use by the size of the excerpt below, but this is too important to risk your missing this because you didn’t click on the link to the article.

Meanwhile, the national corporate media and the U.S. intelligence community have been attacking Trump for a very different and strange reason. They have claimed, with no serious or credible evidence, that Trump is, for some bizarre reason, a tool of the Russian state. The charge is as wacky as anything Glenn Beck or, for that matter, Trump (former leader of the preposterous “birther movement”), used to say about President Obama. Citing vague and unsubstantiated CIA reports, The New York Times, The Washington Post and many other forces in the establishment media want Americans to believe that, in Glenn Greenwald’s properly mocking words, “Donald Trump is some kind of an agent or a spy of Russia, or that he is being blackmailed by Russia and is going to pass secret information to the Kremlin and endanger American agents on purpose.”

Beneath the wild and unsubstantiated charge that Trump is some kind of Moscow-controlled Manchurian president is a determination to cripple and perhaps remove Trump because he wants to normalize U.S. relations with Russia. Why, you might ask, would smoothing things over between Washington and Moscow be a terrible thing? It wouldn’t be for everyday Americans who don’t want to see themselves, their children and their grandchildren blown up in a nuclear war over, say, Ukraine (where the Obama administration provocatively helped create a fascist, NATO-affiliated regime on Russia’s western border) or Crimea (where the vast majority of the population welcomed reversion to Russia).
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Do serious progressives committed to democracy, peace and social justice really want to lie down in the same warmongering and pro-surveillance bed as the CIA and the Pentagon? Doing so is bad for their souls and moral integrity. It’s also bad for democracy and for peace to help empower and legitimize the imperial system’s unelected and infamously nefarious deep state “intelligence” bureaucracy, “maybe the only [Washington] faction worse than Donald Trump,” according to Greenwald. As Whitney wisely counsels, “Leftists should avoid the temptation of aligning themselves with groups and agencies that might help them achieve their short-term goal of removing Trump, but ultimately move them closer to a de facto 1984 lock-down police state. Misplaced support for the deep state Russophobes will only strengthen the national security state’s stranglehold on power. That’s not a path to victory, it’s a path to annihilation.”

Take to the streets (and highways, town plazas, fossil-fuel extraction sites, shop floors, assembly halls, airwaves and airports, etc.) against Trump, by all means. But also take to the streets against the grim neoliberal Democrats who opened the barn door for his dangerous presidency and against the unelected “deep state” interests working always to increase the ever-upward concentration of global capitalist wealth and power. We don’t want to bring Trump down just to help install an administration more properly suited to selling and otherwise advancing American empire, inequality and ecocide.

Naked Capitalism has reprinted the interview it calls Keynesianism and the Great Recession.

One can say that the Obama administration’s failure to reinvigorate the economy after eight years and to reform the banks was the central factor that lost the elections for Hillary Clinton.
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But this wasn’t a defeat by default. On the economic issues that motivate many of these voters, Trump had a message: The economic recovery was a mirage, people were hurt by the Democrats’ policies, and they had more pain to look forward to should the Democrats retain control of the White House.

The problem for Clinton was that the opportunistic message of this demagogue rang true to the middle class and working class voters in these states, even if the messenger himself was quite flawed. These four states reflected, on the ground, the worst consequences of the interlocking problems of high unemployment and deindustrialization that had stalked the whole country for over two decades owing to the flight of industrial corporations to Asia and elsewhere. Combined with the financial collapse of 2007-2008 and the widespread foreclosure of the homes of millions of middle class and poor people who’d been enticed by the banks to go into massive indebtedness, the region was becoming a powder keg of resentment.

One of the reasons I focus this blog on economics issues is the fact that failure to understand economics has major political repercussions. This drives major repercussions on our quality of life in the US and in the world.