Well, it’s official. Recently, President Carter took breath from his other crises and announced that the United States had entered a period of recession. “The Wolf Has Arrived” , Time headlined, but reassured us that it was “better late than never” . This curious judgment is based on the belief that the recession, like a crisis in a long, wasting disease, is a Good Thing. It should have come a year ago, Time argues, but was delayed by a “ bad case of inflationary psychology” . For months, consumers (Yes! It’s their fault again!) have been rushing out to buy in the belief that prices, no matter how high already, could only go higher. “This has ballooned inflation to an annual rate of more than 18 per cent” , Time regrets. It also had the effect — though here the news magazine is silent — of keeping the economy afloat.
Recommended CitationO'Shaughnessy, Terry, Economic Notes: The New Monetarist$, Australian Left Review, 1(74), 1980, 12-17.