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NOTE Can you address the recession of 1958?

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Excuse me, my favorite story. Anybody who's heard this, I apologize for repeating it.

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About, I think, in the recession in 1958, which was the first recession where the phenomenon of the inflationary recession first began to appear.

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This was the first time when the prices were still rising during the recession.

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And here we had an authentic, officially authenticated and certified recession.

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And yet prices, instead of falling, which is what prices are supposed to be doing in a recession,

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instead of falling, prices were still going up. They weren't going up very much, but they were going up.

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Arthur Burns, who at that time had just resigned as head of the Council of Economic Advisers in the Eisenhower administration,

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was giving a lecture up at Fordham, which I happened to attend, giving the usual Keynesian policies, what to do about recessions.

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Basically, when there's a recession, you pump spending into the system, you meaning the government.

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One, the government pumps spending into the system, thereby lifting the economy upward.

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And when there's an inflation, the government takes money out or takes spending out of the system.

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And you work several variants or changes on this theme, and that's essentially the changing or the establishment program.

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So Burns was going into explaining this policy and during the question period, I was a brash young fellow at that time.

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I said, well Professor Burns, what do you do if the government is supposed to be doing is pumping deficits during a recession and take out spending or have higher taxes or surplus during a boom?

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What do you do if the both are happening at the same time as it seems to be happening right now?

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The question was, what do you do if there's an inflation and a recession at the same time?

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Well, he said, his first reply was, well, there's no problem there because the recession will soon be over, and so forth.

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And I said, well, okay, and it was soon over in 1958.

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And I said, what happens if President Biden, if at some future date the same phenomena will recur and intensify,

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will have a severe recession, a lower and accelerating inflation?

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What then would you recommend?

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He stopped for a moment and he said, well, in that case, we all have to resign.

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Well, they haven't resigned. The rest, of course, is history.

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The phenomena has arrived and is with us right now and nobody's resigned.

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It's one of Rothbard's laws of political science that nobody ever resigns from government unless your hand is caught directly in the tail.