Leibowitz on Trade: Perspectives on Inflation

On Friday, the Labor Department announced the inflation rate for November. At 0.8%, it was a tick lower than the October inflation rate of 0.9%. But most observers paid more attention to the annual rate of inflation. At 6.8% compared to prices one year ago, the inflation rate was the highest it’s been since 1982.

Many of you remember the inflation in the late 1970s and early 1980s. I certainly do—gas lines, the 15% mortgage interest rates for homes, heating oil inflation and the like. The inflation then had different manifestations than the current situation: gasoline price inflation was similar, but mortgage rates today are still pretty low. Corporate and government borrowing was so expensive then that it helped propel Ronald Reagan to his electoral victory in 1980. His administration set to work to break the back of inflation and it was successful. A brief but sharp recession was needed to break the psychology of inflation.

Lewis Leibowitz

Lewis Leibowitz, owner of the Law Office of Lewis E. Leibowitz, practices in the areas of international trade law, customs law, and international commercial transactions. He represents clients before all federal courts and agencies dealing with international trade matters. Mr. Leibowitz advises and assists clients in diverse matters including trade remedies, customs, foreign-trade zones and free trade agreements, trade negotiations, and related matters. He can be reached at lewis.leibowitz@lellawoffice.com.