Maybe you’ve been sensing this, too—the feeling that something seems amiss in America today. Like, the national mood is defeatist. People feel like they’re falling farther and farther behind, despite having decent jobs.
In some ways it’s very much like a reboot of the disillusionment of the 1970s.
And that’s the realization that hit me: 2026 is the late 1970s on replay.
Different Decade. Same Troubles.
Think about it:
1979: The Iranian Crisis.
2026: The Iranian Crisis, just in a different format.
1979: The Oil Shock. A barrel of crude more than doubled, with gasoline prices up 40%. Diesel prices spiked, sending transportation costs higher, which flowed through to rising food costs (since so much food is delivered by diesel-drinking trucks).
2026: The Oil Shock. A barrel of crude nearly doubled, with gasoline prices up 50%. Diesel prices have spiked, sending transportation costs higher, which is flowing through food costs today.
1979: Gas lines at service stations across America as fuel ran short.
2026: The gas lines have moved… to the airport departures board (airlines are cutting routes because of extreme fuel cost increases). And into the salt caverns of Louisiana, where Washington is draining the emergency oil reserve built after the last Iran crisis—so that American drivers don’t have to see gas lines this time around.
1979: The Federal Reserve raised interest rates into the national pain.
2026: The Federal Reserve raised interest rates into the national pain.
1979: Inflation is the silent pickpocket robbing American families of their spending power.
2026: Inflation is the silent pickpocket robbing American families of their spending power.
1979: Jimmy Carter showed up on national television and told the country it was suffering “a crisis of confidence,” what came to be known as the “malaise” speech, though Carter never actually said malaise.
2026: The University of Michigan’s consumer-sentiment index hit the lowest reading in the survey’s history.
Santayana might have been onto something with that whole schtick about history repeating…
Which might mean trouble as we look ahead.
Last Time, One Man Broke the Cycle
In 1979, America had a way out of the crisis. It was brutal, but it existed.
Paul Volcker took the reins of the Federal Reserve in August 1979 and did what no Fed chairman had dared to do before: He drove interest rates radically higher, to around 20%. The economy suffered two recessions almost back to back, and by late 1982 unemployment was approaching 11%, the worst since the Great Depression.
Homebuilders were so furious they put postage on bricks and two-by-fours and mailed them to the Fed because industry was in collapse as mortgage rates topped 18%.
Volcker’s strategy worked.
Inflation broke.
And his aggressive reset is widely credited with launching two decades of steady growth.
Thing is: Volcker could break the economy because Washington could afford to reset the bone. In 1980, the national debt was about $909 billion, roughly a third the size of the overall economy.
The $40 Trillion Problem Volcker Never Faced
Today it’s $40 trillion, more than 125% of the economy. And interest costs alone are adding more than $1 trillion a year to the debt.
Run Volcker’s playbook against that math and it’s not an economic reset so much as it’s an assisted suicide.
So, the Fed can’t break the economy to save it this time.
What to do?
Well, we’re going to find out. Unfortunately.
My bet: DC allows something else to break instead. The dollar? The bond market?
Who knows?
I have suspicions. (I shared how crypto could play a role earlier this week.)
Stay tuned. There’s a reset coming and we’re all gonna feel it.
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