The high inflation period the United States experienced under President Jimmy Carter is a time folks with a few years under their belts want to forget. After living overseas for several years, my family returned to the United States at the height of the Carter administration mess.
I needed a job, but there were no jobs available, and for the first time in my life I was told I was too qualified. I figured employers either didn’t want to pay me what I was worth or thought I would be too sassy with all my “knowledge.”
Without close family willing and ready to help, our three small children, born in India and Nepal, could have starved. I also remember, for the first time in my life, buying a compact car (used, of course) because gas prices had gone through the roof, if you could find a station that would pump any.
Imagine our surprise just a few years later when we arrived in Argentina and ran into hyperinflation even worse than the Carter catastrophe. We were somewhat sheltered because we received a moderate monthly salary in U.S. dollars. But even the use of American dollars could turn out to be a disadvantage, because most governments fighting hyperinflation try to use the exchange rate to keep down their own currency. For more than 35 years in South America, we lived under regimes where our U.S. dollars were usually worth about half of their real value because of those policies.
Every now and then, the forces of hyperinflation would become too massive to be defeated by the juggling of economic ministers who didn’t want to deal with real structural problems. The mess would finally explode into a huge devaluation of the local currency, with ministers and even presidents resigning. The country would be left with economic shambles, and people would be left holding currency that yesterday was worth 50 or 100 times more than today.
President Harry Truman purportedly said that if all the economists in the world were lined up, each would be pointing in a different direction. Economics, based on
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