and economic stagnation so we call this stagflation
stagflation
so inflation means that things are
costing more money so your money is
actually worth less
and economic stagnation means basically
the economy is not growing
things aren't getting better and
anything you do that will help one of
these problems will make the other one
worse unemployment reached 7.8 percent
in may of 1980
up from 6 and 77 and remember we want
unemployment to be between five and six
percent anything more than that we start
to get very nervous anything over seven
we're talking recession
inflation the rate at which the cost of
goods and services increases jumped from
six percent in 1978 to a staggering
20 by the winter of 1980. so that would
mean that if you had gone to buy
groceries you know a year before and you
went back in december about the exact
same number of groceries and types of things
things
it would cost you twenty percent more
but your paycheck is not twenty percent bigger
bigger
in fact because of economic stagnation
it's actually worth even less than that
so this is going to squeeze the american
family really tightly
carter responded to these challenges in
fundamentally conservative ways which is
really going to frustrate democrats who
would have preferred having a
stronger liberal in office first carter
proposed and got a tax cut for the upper
middle class in 1978
and taxes were still pretty high so that
could be considered
you know in line with democratic
policies second
carter deregulated the airline and
trucking industries which seems pretty
conservative today
and third carter proposed balancing the
federal budget much to dismay of
liberals who would have preferred that
he used deficit spending to fund a new
new deal so balancing the federal budget
that was hoover's idea
during the great depression that if you
could balance the federal budget that it would
would
you know spur confidence in the economy
finally to halt inflation carter appointed
appointed
chair of the federal reserve paul
volcker who raised interest rates
and tightened the money supply now that
is going to slow down the growth of the
economy and we already have economic
stagnation so we're going to make that worse
worse
but those policies were designed to
reduce inflation in the long run
but because they're going to make the
economy worse in the short run they're
going to increase unemployment so it is
tough medicine but it's basically the
only thing we know to do with stagflation
stagflation
we still don't have a good solution for
that economic problem
but if you take this hard medicine after
a couple of years it will begin to turn around
around
in a nationally televised speech on
energy policy on july 15
1979 carter discussed a crisis of
confidence in the united states
now oddly enough his speech has come to
be known as the malaise
speech even though he never uses that
word in the speech
he sidesteps deeper questions of
large-scale economic changes that are actually
actually
causing the economic problems the nation
was seeing
in 1976 carter had touted the misery
index the addition of the unemployment
rate to the inflation rate as an
indictment of republican rule
and yet carter was failing to do any
better against stagflation it's a tough
problem to fix so it's easy to blame the
person in the white house for it
it's much harder once you are the person
in the white house to fix
it so take a moment and go listen to
carter's short malay speech he
his background as a sunday school
teacher will surely come through
and then move on to the final clip of
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