Back to those Old Bell-Bottom Blues?

Today's Birmingham News considers the similarities between today's economy and that of the 1970s. Roy Williams writes:

Times were tough - crude oil trading at unimagined levels, gold prices setting eye-popping records, food costs creeping higher, stock prices crumbling amid signs of a sputtering economy.

The 1970s? Try today.

The parallels are striking. And a little disturbing, considering the decade of the 1970s gave us the unpleasant term "stagflation" to describe the painful combination of rising inflation and stagnant wages. It was a stomach-churning time of lines at the gas pump and stock market malaise.

Read the full article HERE.

One major difference between today and those bad 1970s: Today, we don't have price controls. When the U.S. government imposed wage and price controls, prices couldn't rise to the level at which markets would clear, and the result was (as always is the case) shortages. The controls make prices sticky (obviously) and prolongs the market-clearing process that is a recession. If we are indeed entering an era similar to the 1970s, the lack of price controls today should make the liquidation process quicker. But...if someone hands you a WIN button, or if, after the November election, the president-elect starts talking about windfall profits taxes, then hang on for an unnecessarily longer ride.