Captain Ed reports that Iran is going through a stagflationary period. We now have gas-rationing in a country that used to export lots of oil, but no longer. Ed writes

In fact, we managed to fight our way out of stagflation by relying on the free market, rather than imposing more government regulation. The Iranians show no sign of thinking in that vein, even if they didn't have limitations from the international sanctions boxing them into a corner with very few options.

In fact, we only learned it after several years. Between the start of the Great Stagflation and the Seven Fat Years, we had three recessions, WIN buttons, wage and price controls, credit controls and a whole lot of vacuous palaver about incomes policies. It took us two elections and much pain and failure to find the cure for stagflation. Given the length of time Iran has spent in this downturn, it may be a good time longer before she rights her ship, and it will take both another Reagan and another Volcker.

Labels: economics