Shock Values: Prices and Inflation in American Democracy

Binder (economics, Haverford Coll.) examines the economic destabilization caused by fluctuations in the cost of goods and the effective—and often controversial—remedies the American government has historically used to steady the market, plus their lasting effects. Her book begins with the challenges U.S. colonists faced in controlling prices while financing the Revolutionary War and establishing a new nation. Postbellum politics then shifted to creating best practices for managing national and local economies. This meant establishing the federal system for government and the Federal Reserve (to stabilize the economy). During the Great Depression of the 1920s, the government took an aggressive stance to increase prices, decrease the recession, and avoid deflation. In the 1960s, there was a crisis of soaring prices for steel and other materials. To stem the resulting inflation, President Kennedy and Federal Reserve Chair Paul Volcker (and later Alan Greenspan) raised the prices of goods. Binder also covers the current moment, in which, in reaction to the COVID pandemic, the government regulated the rising costs for drugs and other commodities.