Causes of 1980s Recessions, Crash
The blue line is unemployment, grey bars recessions. We now examine 1980-1990. On 19 February 1980, the Commission on Narcotic Drugs decided to ask all governments to implement to the fullest extent possible sweeping countermeasures against drugs declared illegal, and recommended crackdowns: 3 (XXVIII) ... on financial assets and transactions related to illicit traffic … and subsidized equipment and technical assistance to prohibitionist countries.( link ) The muckraking journalists on 60 Minutes--who stirred national panic after a TMI reactor malfunction injured no one--promptly fanned hysteria against Bolivian plant drugs neither habit-forming nor addictive.( link ) The recession in 1980--like the Great Depression caused in part by League of Nations prohibitionism--is thus clearly discernible in the first quarter of 1980. Inflation went to 13%, then 15% and the San Francisco Fed presented an unconvincing theory reminiscent of Herbert Hoover's "explanation" of the...