Or at least as bad as they're cracked out to be. As mentioned in my last post in economic matters there are always winners and losers.
For more on this please see http://diaryofarepublicanhater.blogspot.com/2011/09/financial-repression-best-of-times-and.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
It is certainly true as Krugman says we shouldn't romanticize the 70s.
He even goes as far as saying there are worse things than inflation, an unthinkable heresy to suggest right now. But when we look at the 70s we don't see the worst economy anyone has ever lived under. The 30s were much worse. And as Krugman points out, the 30s are much more similar to our situation than the 70s. Why then are the 70s so eviscerated? Because there is a certain ideology that wants to claim that the worst thing in the world is inflation that contrary to Krugman there is nothing worse than inflation.
Again no reason to romanticize the 70s but there were a few things in that decade that we might appreciate right about now. For one thing student loans in large part because there was such high inflation weren't the strait jacket they are now where it is as though you live your whole life just to pay down debts. Some say we shouldn't live to work but work to live. But at this point we have many who aren't working at all and those who are find themselves saddled with student loans which alone among any kind of debt there is no bankruptcy protection for.
Indeed as suggested in my last post one group of people who had good reason to hate the 70s were bond sellers. More widely, if we understand the longer period of 1948 till 1980 as Carmen Reinhart does as a period of "financial repression" then we can understand why the bondholders wanted a new regime and why even the memory of the 70s for them is vitriol. Yet there are always winners and losers and what's amazing is that a 30 year bond in 1981 fetched you a 15% interest rate. The lucky stiffs who did buy in at that level get to cash out this year.
Indeed in the late 70s and early 80s you could get a money market fund for 20%. It was not a great time for stocks but when you can get 20% for letting your money sit in a savings account who needed stocks? So the 70s were a time when high inflation effectuated a massive transfer of wealth from creditors to debtors, and you could have a 20% savings account.
And for that matter median income and the median standard of living was way above what it is today. Again the 70s were a schizophrenic time and despite what it may seem I am not romanticizing them. There were gas lines, tremendous price instability, etc. But you got to admit that right now debt relief and a 20% interest rate on your savings account sounds pretty good. Today you essentially pay the bank to hold onto your money as you do in the case of bonds who have seen their interest rates at 2% come full circle back to where they were back in 1940 before the start of the '40 year bear market for bonds.'