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interest rates didn't come down immediately after reagan's election. interest rates for mortgages, for example, were still in the mid-teens in the early 80s.

interest rates didn't come down immediately after reagan's election. interest rates for mortgages, for example, were still in the mid-teens in the early 80s. http://www.freddiemac.com/pmms/pmms30.html http://www.freddiemac.com/pmms/pmms30.html If you look, rates were typically in the 8s up through midway through Carter's term, then spiked in to 9, 10, 11, then 12-16 in 1980, and it took most of Reagan's 2 terms to come back down to the 9 range. Someone in 1981 would still be thinking of Carter's effects on interest rates, and the rates were "Jimmy Carter-era". They were also "Reagan-era", but not many people point the finger at him for rates going to 16, since he wasn't even elected when that happened.

microtherion 9y ago
Thanks for the table! I was looking at prime rate tables, but those moved more or less in parallel. I believe we're more or less agreeing on the facts, but differ on the interpretation. The rates in 1977 and 1978 were lower than any in Reagan's two terms. Conversely, rates in 1981, 1982, and (barely) 1984 were HIGHER than any in Carter's term. Sure, Carter's policies had some effect on those interest rates, inasmuch as he made Paul Volcker Fed Chairman. However, the high interest rates were necessary to bring down inflation rates, which started spiking under Nixon/Ford, and Reagan's massive budget deficits did not exactly help either. So putting the August 1981 interest rate on Carter's doorstep smacks a bit of partisan bias (hardly unsurprising in a magazine owned by a perennial GOP presidential candidate), though admittedly with a bit more justification than e.g. blaming 1992 events on Bill Clinton's presidency.
- mgkimsal 9y ago
  Thanks. I don't think it's out of line to give some blame to Carter for the rates in Aug 81 - it still would have been on his budget's watch, although I'm not sure that many people think that deeply about it. It's probably a bit partisan, but I don't remember my parents blaming Reagan for 16% interest rates when getting a loan in 1981.

microtherion 9y ago

Thanks for the table! I was looking at prime rate tables, but those moved more or less in parallel. I believe we're more or less agreeing on the facts, but differ on the interpretation. The rates in 1977 and 1978 were lower than any in Reagan's two terms. Conversely, rates in 1981, 1982, and (barely) 1984 were HIGHER than any in Carter's term. Sure, Carter's policies had some effect on those interest rates, inasmuch as he made Paul Volcker Fed Chairman. However, the high interest rates were necessary to bring down inflation rates, which started spiking under Nixon/Ford, and Reagan's massive budget deficits did not exactly help either. So putting the August 1981 interest rate on Carter's doorstep smacks a bit of partisan bias (hardly unsurprising in a magazine owned by a perennial GOP presidential candidate), though admittedly with a bit more justification than e.g. blaming 1992 events on Bill Clinton's presidency.

mgkimsal 9y ago
Thanks. I don't think it's out of line to give some blame to Carter for the rates in Aug 81 - it still would have been on his budget's watch, although I'm not sure that many people think that deeply about it. It's probably a bit partisan, but I don't remember my parents blaming Reagan for 16% interest rates when getting a loan in 1981.