The Fed Must Do Much More to Fight Inflation—And Fast

During the 1960s and 1970s it took a dozen years for a toxic cocktail of excessive fiscal stimulus, misguided monetary policy focused on symptoms rather than causes, and bad luck on the supply side to generate stagflation—a combination of high inflation and a stagnant economy. Stagflation and political dysfunction corroded public trust in government, undermined public confidence that the country was on the right track and brought down the Presidencies of both Gerald Ford and Jimmy Carter.