Prices And Inflation – Yesterday, Today And Tomorrow – NBC Radio – June 10, 1951 – Gordon Skene Sound Collection –
If you’ve spent any time shopping, paying bills and balancing checkbooks in 2021, hearing these tales of runaway spending and how you could fill your car to overflowing with groceries for only $5.00 seem downright wistful and nostalgic.
That rents for a one-bedroom apartment in 1951 had jumped from $24.00 to $75.00 a month, and the increase prompted Rent Control.
Of course, the dollar was different then and we can thank inflation for that. $100.00 in 1951 is roughly the equivalent to $1,138.00 today. But then again, there is that thing called cost-of-living which accounts for increased minimum wages – even though the gap between those earning the highest amount and those earning the lowest amount is planets apart. It was less so in 1951.
In 1951 we were experiencing Inflation mostly because we were knee-deep in the Korean War. At the conclusion of World War II, Congress turned its attention to policies it hoped would promote greater economic stability. Most notable among the laws that emerged was the Employment Act of 1946. Among other things, the act declared it a responsibility of the federal government “to promote maximum employment, production, and purchasing power” and provided for greater coordination between fiscal and monetary policies.1 This act is the seminal basis for the Federal Reserve’s current dual mandate to “maintain long run growth of the monetary and credit aggregates…so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates”.
The orthodoxy guiding policy in the post-WWII era was Keynesian stabilization policy, motivated in large part by the painful memory of the unprecedented high unemployment in the United States and around the world during the 1930s. The focal point of these policies was the management of aggregate spending (demand) by way of the spending and taxation policies of the fiscal authority and the monetary policies of the central bank. The idea that monetary policy can and should be used to manage aggregate spending and stabilize economic activity is still a generally accepted tenet that guides the policies of the Federal Reserve and other central banks today.
To get an idea of what we were going through 70 years ago, compared to what we’re going througha in 2021, here is that episode of NBC Radio’s new program Yesterday, Today and Tomorrow as it was first broadcast on June 10, 1951.
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