>> Yes, but wasn't it the oil shocks that really got inflation going back in
>> the '70s?
that was part of the problem. But more important was the fall of the
US profit rate going from the 1960s to the 1970s. Businesses responded
by trying to solve the problem using price increases. This these
didn't solve the structural problem depressing profits, they continued
raising prices, encouraging continuous inflation -- and stagflation.
The solution (from the capitalist perspective) came with the
neoliberal policy revolution of the late Carter/early Reagan years,
which restructured the US economy and tipped the balance of power
heavily toward capital. Eventually, the profit rate was restored
(though not completely to 1960s rates) and stagflation went away.
By today, the neoliberal policy revolution has gone far beyond simply
responding to depressed profit rates. Once they got the ball, they ran
with it, using power to accumulate further power and raise incomes
even higher, as under Bush1 and Clinton. The Bush2 administration
might be seen as this policy revolution going beyond the borders of
even neoliberal reason into the realm of the absurd. (It's absurd from
a neoliberal perspective, criminal or worse from several other