Slate on Stagflation

You cannot open the business pages these days and not hear a discussion of stagflation. Slate on the topic:

It's like a bad '70s flashback. Oil at $100 per barrel, and now stagflation. The unhappy coincidence of sluggish growth and rising inflation, stagflation is economic poison. (Read my colleague Robert Samuelson's excellent primer on it in Newsweek.) It is the opposite of the economic idyll of the last quarter-century, an era of relatively low inflation and relatively rapid growth.

The stag? Gross domestic product rose at an annual rate of only 0.6 percent in the fourth quarter of 2007 and probably isn't doing much better today. The flation? The Consumer Price Index rose 4.3 percent between January 2007 and January 2008.

Of course, Justin Fox has made some pretty strong arguments on why 2008 is not like the 70s.

What surprises me is the fact that there is not more talk that a supply shock, specifically high oil prices, not the subprime crisis is the cause of the current economic malaise. You would think the peak oil fans who e-mail me every day would be using this an example of how dependent the American economic growth is on the availability of inexpensive fossil fuels.