I made my second career moves in 1973 going from what is now CSU-Pueblo to New Mexico Highlands University in Las Vegas, New Mex. It was the first time that I had the opportunity to spend extended time with the people of that beautiful part of the state.
It was there in that small town that I experienced the long lines at gas stations caused by the Arab oil embargo that elevated the price of gasoline at the pump by 400 percent. The sudden amount of change in the price of gas was a sobering introduction to an enchanting part of rural America.
I also came to understand the role of the rise in gas prices in the trajectory of an inflationary spiral that emerged into the open during the 1970s. It appeared that the combination of spending on the Great Society programs of the 1960s together with the cost of the War in Vietnam had sparked the cost of living rise that was hard to resolve.
When President Jimmy Carter took office in 1977, inflation was already out of control. In 1979, inflation reached 13.3 percent as the Iranian Revolution that brought Ayatollah Khomeini to power also caused oil prices to double again.
I remember buying an apartment immediately before the last inflation push and got a decent mortgage rate. I also remember later thinking that I was paying the mortgage off with funny money.
The appointment of Paul Volcker as Chairman of the Federal Reserve also brought the tough medicine remedy that eventually got inflation under control. He instituted a 20 percent interest rate program that reduced inflation to 3 percent by 1983.
The administration’s ability to get bipartisan congressional approval of the Infrastructure Investment and Job Act in 2021 represents a signature moment in a politically fragmented country. Other presidents, including Biden’s predecessor, talked about it but could not get it done.
This signature legislation that includes funding for roads, bridges, rail, ports, drinking water, high speed inter- net, climate crisis intervention and environmental initiatives among others has a similar effect as Obamacare. Yet, even before it was passed by both houses of Congress, the bill was diminished in importance, especially by its propo- nents that referred to it as only half of the agenda and Build Back Better the other half.
To be sure, Build Back Better includes forward looking items like child care, housing and a more effective tax on large corporation. However, it also has the appearance of an over the top inflationary initiative.
There is a need for more thought about this given the fact that, like in the 1970’s, the cost of living increases have reared their head and promise to again affect the life of the country. This can have severed political consequences. President Carter lost his reelection bid in part because of an inflationary spiral that matured during his adminis- tration. President Biden stands to be accountable for the present one.
The Progressive Movement and other elements of the left wing of the Democratic Party are pushing hard for the Build Back Better initiative even in the face of a national and international economic reality that does not favor the approach. This can translate into a difficult political land- scape for the 2022 and 2024 elections.
Inflation is very menacing as it affects every sector of our living. We can feel it day to day as the price of every thing goes up and eats away our earnings. It requires tough medicine that can not be delayed and must be strong.
The views expressed by David Conde are not necessarily the views of la Voz bilingüe. Comments and responses may be directed to news@lavozcolorado.com.
