Commentary
Later this month, the government will announce second quarter GDP figures. If they are negative, coming after a 1.5 percent decline in the first quarter, it will be official. The recession will enter into the annals of economic history. At the same time, everyone knows about the roaring inflation right now, which official data lists at 8.3 percent for consumer prices but real-time data clocks at 12 percent.
The word for this is stagflation, coined in 1965 by UK politician Iain Macleod. It did not enter into common usage until the 1970s because the modern world had not previously experienced the combination of negative growth plus inflation. More than that, most economics models in those days were structured to rule it out as a possibility….