Tuesday, February 21, 2017

The gory details

Google house of commons official report

77 million results. The one I want is first on the list.

Click House of Commons Hansard archives - UK Parliament

At the House of Commons Hansard archives page you want Historic Hansard: 1803-2005.

Using their nifty century-and-decade-selector, select the 20th century, and then select the 1960s.

Then select the year (1965) and month (November) and day (the 17th).

From there I used Ctrl-F to search the page for econ and found ECONOMIC AFFAIRS.

I clicked that and got a discussion in which Iain Macleod was involved. From there, a CTRL-F search for stagf brings you to the pertinent quote.


Now the quote from 1970.

Go to the Historic Hansard: 1803-2005 page.
Click the 20th century.
Click the 1970s.
Click 1970.
Click July.
Click the 7th.

Ctrl-F search for econ.
Click the one result.
Ctrl-F search for stagf.
Three hits.
First hit: Chancellor of the Exchequer Mr. Iain Macleod speaking:
The economy today shows two outstanding features. On the one hand, demand and activity are rather sluggish and unemployment is high compared with the post-war average. On the other hand, there is the strongly rising trend in wages and prices. This is a combination of stagnant production and cost inflation. As Shadow Chancellor, I christened it "stagflation". I cannot believe that even hon. Gentlemen opposite, however they wish to paint this picture, can be complacent about such a situation.

Later that same day,

he was rushed to hospital with appendicitis. He was discharged 11 days later; yet at 10.30 pm on 20 July, while in 11 Downing Street, he suffered a massive heart attack and died at 11.35 pm.

So it goes.

Monday, February 20, 2017

Documenting the origin of the term 'stagflation'

If you really, really, really want to know, this will be interesting.

I got a little nervous when both Glasner and Krugman said the origin of the word "stagflation" was the mid-1970s -- after I said the mid-1960s and my only backup was Wikipedia.

Seems like I should be able to find a document that offers proof of some kind -- a newspaper clipping or magazine article from 1965 quoting Iain Macleod, or something like that.


Looking for evidence, as opposed to cut-and-pastings of the sentence "The coinage of the word stagflation is attributed to him."

Here is something: from Project Gutenberg, the World Heritage Encyclopedia article on Iain Norman Macleod. Interestingly, the article includes the quote of his first use of the word "stagflation", from 1965:

We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation. And history, in modern terms, is indeed being made.

and the quote is footnoted.

Oddly, the footnote link is broken.


At the Mises Wiki, an article on Stagflation. The first line is a good definition of stagflation:

Stagflation is an inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity.

The second line attributes the term "stagflation" to Iain Macleod:

The term stagflation is attributed to British politician Iain Macleod, who coined the phrase in his speech to Parliament in 1965.

Both lines are footnoted.

The attribution footnote reads:

Edward Nelson and Kalin Nikolov. "Monetary policy and stagflation in the UK", Bank of England Working Paper #155, 2002; Introduction, page 9. (Note: Nelson and Nikolov also point out that the term 'stagflation' has sometimes been erroneously attributed to Paul Samuelson.) Referenced 2011-04-25.

The "Monetary policy and stagflation in the UK" link takes you to "Page Not Found" at the Bank of England.

The Bank of England link takes you to the Bank of England page at the Mises Wiki.

You should be laughing by now.

I went fishing for a PDF named "Monetary policy and stagflation in the UK" and did not come up empty.

Found a couple different PDFs containing one-page blurbs for the article at the Bank of England. No thanks.

Found the PDF at CiteSeerX. But that was yesterday, in a Google search for the quoted title. Captured the link. Tried it today, and CiteSeerX doesn't know anything.

But I went to Google again and searched for "Monetary policy and stagflation in the UK" in quotes, and the CiteSeerX link came up first on the list. And the link works.


I don't know if it'll work for you.

The PDF is 43 pages long. Written by Edward Nelson and Kalin Nikolov. The paper is © Bank of England 2002, and ISSN 1368-5562.

I thought is was "ISBN" but "ISSN" appears legit.

The Mises Wiki footnote refers to page 9. In the PDF, that's the Introduction. The Intro opens with this statement:

On 17 November 1965, Iain Macleod, the spokesman on economic issues for the United Kingdom’s Conservative Party, spoke in the House of Commons on the state of the UK economy

That opening is followed by the same "worst of both worlds" quote I showed above.

Interestingly, following that quote in the PDF there is a reference:

(17 November 1965, page 1,165).

The reference is footnoted. Oddly, the link works. The footnote says

Many of the statements quoted in this paper are those by UK policy-makers in Parliament, as given in the House of Commons’ Official Report (also known as Hansard). These quotations are indicated by the date of the speech and the page from the Hansard volume from which the quotation is taken.

So there is hope. Maybe I can find the Hansard volume that documents the quote.

Good grief.

After the Macleod quote, the text says

With these words, Macleod coined the term ‘stagflation’.

That sentence is footnoted. The footnote says

Macleod used the term again in a speech to Parliament on 7 July 1970 and confirmed that he had invented the word. From then on, the term was common parlance in UK economic policy debate, being used, for example, in an article in The Economist of 15 August 1970. Some sources (eg Hall and Taylor (1997)) attribute the term to Paul Samuelson (1975). But the earliest occasion on which we have found Samuelson used the word was in a Newsweek column of 19 March 1973, entitled ‘What’s Wrong?’, reprinted in Samuelson (1973, pages 178–80).

Now I'm happy. It's not only that the word is attributed to Iain Macleod; he also says he invented it.

Well that was easy, huh?


I made a one-page PDF of the page (page 9) from the "Monetary policy and stagflation in the UK" PDF. Download it and have a look if you want.


Oh wow, I found it! Actual documentation:


Now I'm happy.

Sunday, February 19, 2017

In the context of yesterday's post, you might find this funny

Via Paul Krugman, Paul Krugman declares — as a simple fact — that

Stagflation was a term coined by Paul Samuelson to describe the combination of high inflation and high unemployment. The era of stagflation in America began in 1974 and ended in the early 80s.

Saturday, February 18, 2017

How an economist thinks

I usually like reading David Glasner for snippets of economic history. But I was a little disappointed when I read his old post on 1970s Stagflation. Here is Glasner's opening:

Karl Smith, Scott Sumner, and Yichuan Wang have been discussing whether the experience of the 1970s qualifies as “stagflation.” The term stagflation seems to have been coined in the 1973-74 recession, which was characterized by a rising inflation rate and a rising unemployment rate, a paradoxical conjunction of events for which economic theory did not seem to have a ready explanation.

The term was not coined during the 1973-74 recession. Wikipedia:

On 17 November 1965, Iain Macleod, the spokesman on economic issues for the United Kingdom's Conservative Party, warned of the gravity of the UK economic situation in the House of Commons: "We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of "stagflation" situation. And history, in modern terms, is indeed being made."[3][5] He used the term again on 7 July 1970, and the media began also to use it, for example in The Economist on 15 August 1970, and Newsweek on 19 March 1973.

Stagflation is not an incidental or inconsequential part of econ. I find it distressing that Glasner has so little concern about stagflation that he doesn't know the origin of the term, is willing to guess the origin, and is satisfied to make a bad guess. (If my view seems extreme, let it reflect the importance of stagflation in my economic thinking.)

Glasner does offer a good description of stagflation as "a paradoxical conjunction" of rising inflation in a stagnant economy. And he is right about the reason stagflation was significant: Economic theory could not explain it.

Glasner links to Karl Smith, who says

The 1970s were definitely an era of stagflation

and to Scott Sumner, who quotes that line and disputes it. As Glasner has it:

Scott observed that inasmuch as average real GDP growth over the decade was a quite respectable 3.2%, applying the term “stagflation” to the decade seems to be misplaced.

What is the argument here? Given that we did have rising inflation in a stagnant economy at times in the 1970s, the argument seems to be whether it is okay to call the decade an "era" of stagflation. Sumner says it is not okay, because growth on average was "normal" in the 1970s.

But Karl Smith does not say growth was slow in the 1970s:

Scott is correct that we remember the 70s as an era of slow growth but indeed GDP growth was rapid.

Smith agrees with Sumner that growth was good in the 1970s. Where is the problem?

They agree that growth was good. But Smith points out that there was stagflation. And Sumner says No, growth was good. Quite the non sequitur.

Hey... It is important to get the facts right. If growth was good in the 1970s, we need to know it. But Karl Smith does not dispute that growth was good in the 1970s. So what's the problem?

Maybe the problem is semantics: For Scott Sumner the word "era" implies "the whole decade". And then he mistakenly equates "stagflation" with "stagnation". Thus, Smith says there was stagflation in the 1970s, and Sumner apparently takes him to mean there was stagnation for the whole ten years of the 1970s. Sumner responds, saying real growth was normal and averaged a 3.2% annual rate in the 1970s.

The kindest interpretation of their dispute that I can offer is that Sumner knows that many people say growth was slow in the 1970s. And he knows that growth was not slow in the 1970s. And the discrepancy is a sore point for him. I sympathize.

Scott Sumner says it is incorrect to think that growth in the 1970s was slow. But so does Karl Smith. Come to think of it, Paul Krugman said it too. And David Glasner:

... if one looks at the periods of rapid increases in aggregate demand in which oil price shocks were absent, we observe very high rates of real GDP growth.

So Scott Sumner and Karl Smith and Paul Krugman and David Glasner and I agree that growth was good in the 1970s. And look at this graph from Marcus Nunes:

Graph #1 Source: Marcus Nunes. See also here and here.
Marcus shows inflation-adjusted GDP on a log scale, so that a constant growth rate appears as a straight line. In red, he shows a constant-rate trend line. And he marks up the graph to identify different periods. Look at the period labeled "G.I." for "Great Inflation" -- the inflationary years from 1965 to 1980.

Marcus's graph shows real GDP (blue) at or above trend for the entire inflationary period. By contrast, before 1965, and again after 1980, the blue line is at or below trend. The inflationary period shows particularly good economic performance.

So that's Scott Sumner and Karl Smith and Paul Krugman and David Glasner and Marcus Nunes and me. And the third economist named in Glasner's post, Yichuan Wang, says real growth should get a boost from inflation like we had in the 1970s (though he doesn't see it himself, according to Glasner).

So yes, there's good reason to be careful when talking about stagflation in the 1970s, inflation and stagnation in the 1970s. Good reason. And yet, Karl Smith *is* careful. He explicitly says growth was good in the 1970s. And he says it immediately after he calls the 1970s "an era of stagflation". Why, then, does Sumner choose to disagree with Smith when Smith is trying to agree with Sumner?

Why? Because Sumner has an agenda:

Rather than arguing over semantics, I’d rather focus on the important issue; what does the 1970s tell us about NGDP targeting?

You might have guessed. Sumner wants to talk about NGDP targeting. He doesn't want to argue over semantics. The whole "semantics" argument is a straw man that Sumner set up so he could say he doesn't want to argue over semantics. Sumner is out to get attention for his hobby horse, his NGDP targeting hobby horse. He says so himself.

And Sumner will stop at nothing to get that attention. He even re-defines "stagflation" to suit his purpose. Here's Glasner:

The term stagflation [means the combination of] a rising inflation rate and a rising unemployment rate ...

Yes. Stagflation is the increase in the two rates that, when added together, give the "Misery Index". But Sumner criticizes Karl Smith for using the same definition Glasner uses. Here's Sumner:

Karl seems to think [stagflation] means high inflation plus other bad things, like high unemployment.

Scott Sumner sticks a parenthetical finger in the definition of stagflation:

I had thought the word ‘stagflation’ meant high inflation plus slow output growth (due to slow growth in AS.)

By Okun's law, "slow output growth" is equivalent to "high unemployment". That change of wording is only a distraction. But Sumner modifies the concept when he adds the words "due to slow growth in AS". He puts those words in parentheses, as though they don't really change the definition. But those words change everything! By adding the causal factor to the definition of stagflation, Sumner changes everything.

Sumner's "AS" means "aggregate supply". Sumner's extra words make stagflation explicitly and exclusively a result of supply-side factors, by definition.

Sumner himself points out that he is changing the definition:

I think if the term ‘stagflation’ is going to mean anything useful, it has to refer to a periods where, for any given rise in AD, slower than normal AS growth leads to higher inflation. The 1970s do not meet that definition.

Sumner re-defines stagflation to suit his agenda, and suddenly the world is different. You have been bullshitted.

Glasner describes stagflation as

a paradoxical conjunction of events for which economic theory did not seem to have a ready explanation.

Glasner is right. The lack of explanation is the reason stagflation was such a big deal: Stagflation didn't fit with what economists knew about the world. The whole point of raising interest rates to reduce inflation is that it works by slowing the economy. Anti-inflation policy creates stagnation. It still does. But in the 1970s, inflation and stagnation were thought to be mutually exclusive. It was "inflation on the one side or stagnation on the other", as Iain Macleod said. Except, during the inflationary 1970s, we got inflation and stagnation at the same time. It meant there was something wrong with economic theory. It was a big deal.

It opened the door to Milton Friedman and Monetarism and Paul Volcker and all that came after. That's why stagflation is important. That's why it matters. To show that Milton Friedman and everything since Friedman is wrong, if that is what you might want to do, it is necessary to go back to stagflation and review what happened then, and think it all through. Instead of blindly accepting the notion that the whole decade of the 1970s was a time of stagnation. And instead of blindly accepting Scott Sumner's agenda-driven alternative.

Friday, February 17, 2017

Having it both ways

Scott Sumner:
Another example is that “decade of stagflation;” the 1970s.  The only problem with this commonly held view is that the 1970s were not a decade of stagflation; rather we saw an extraordinary surge in aggregate demand:

NGDP growth averaged:  10.4%
RGDP growth averaged:   3.2%

Growth was normal, and inflation was very high.
Scott Sumner:
... the neoliberal reforms after 1980 helped growth...

... growth was slowing almost everywhere in the 1970s and 1980s...

I am not denying that growth in US living standards slowed after 1973...

Thursday, February 16, 2017

To say that money is not a factor of production is to accept the view that money is a veil

At Social Democracy for the 21st Century, an oldie: Stagflation in the 1970s: A Post Keynesian Analysis.

There's a lot I like in it. But I don't stop reading when I get to something I like. I stop reading when there's a problem.

There's a problem. LK writes:
The price of commodities produced in an economy depends on the costs of factors of production, in particular the wage bill, and then the mark-up over the costs of factor inputs (Musella and Pressman 1999: 1100).

The factors of production are
(1) primary commodities or natural resources, including land, raw materials, water, and energy;
(2) labour, and
(3) capital goods.

Thus inflationary pressures can result from
(1) surges in the prices of primary commodities or energy, especially when the prices of these factor inputs are set on world markets or are influenced by supply shocks;

(2) workers pushing for wage rises, and

(3) business firms increasing their pricing mark-ups.


Well, yes and no. Everything he's got there is right. It is something left out that I have trouble with.

Where's finance?

LK lists the factors of production, straight out of Adam Smith: land, labor, and capital. But LK says it better: He says capital goods. That excludes money.

That's good, because I count money as factor number four.

I like what LK says, that "The price of commodities produced in an economy depends on the costs of factors of production".

I like it that Adam Smith's discussion of land, labor, and capital has the title Of the Component Parts of the Price of Commodities.

I like the idea that the cost of a product is, at minimum, equal to the total of the costs that went into making the product.

And if, as LK says, the price of commodities produced in an economy depends on the costs of factors of production, then I like to turn that around and say that the factors of production are cost categories. The factors categorize the costs involved in the production of output. And if that is the case, then certainly money is a factor of production.

If you can't accept that, then say money is a factor of facilitation. And when you say "factors" think of both the factors of production and the factor of facilitation. That's fine with me. What's important is to make sure we include all of the categories of cost that add to the cost of output. Certainly, money is one of those categories. Money, or finance, or rent, or call it what you will.

As Bezemer and Hudson say

... it is necessary to divide the economy into a “productive” portion that creates income and surplus, and an “extractive” rentier portion siphoning off this surplus as rents ...

It surely is important to be aware of the "rentier portion" of the economy. It surely is important to consider the cost imposed by that sector on the rest of the economy. So when I see LK limit himself to three factors, and exclude the "rentier portion" from his list of factors, I have to stop reading, and write.

Tuesday, February 14, 2017

The Boring '90s

Antonio Fatas looks at the change in stock market valuations since the November election and does some economist-math that I can almost follow. He also provides a link to a useful page at CBO. They have budget projections, spending projections, economic projections, and more. They have their most recently-issued projections and older vintages in separate downloadable Excel files. A useful site.

I got looking at their "Potential GDP and Underlying Inputs", then went to FRED by reflex for a gander:

Graph #1: Potential GDP Growth Rate
The graph includes a 10-year projection out to 2027. The projections always make me laugh because they are so obviously different from the historical record. The smooth curve shown at the right end of this graph anticipates lousy growth, but no recession.

Probably smart, not pinpointing the date of our next recession.

The other thing that gets me about Potential GDP is the anomalous high of the latter 1990s. Here -- I downloaded the data and put a trend line on it in Excel:

Graph #2: Growth of Potential GDP and Linear Trend thru 2016
The blue line shows 1950 thru 2027, same as Graph #1. I used the same data for the red line, but stopped the data at the end of 2016. Then I put a linear trend line on the red one.

The 2017-2027 projection (blue) doesn't look so funny now. But that anomalous high of the late 1990s, that one still bothers me.

I put a green line on the graph, connecting the high point of the early 1950s, the high of the latter '60s, and the high of the mid-80s. Then I put a linear trend line (dashed line) on that. Now it's easy to see how high Potential GDP was in the latter 1990s.

Graph #3: Trend of Peaks in Potential GDP Growth
Also, maybe the 2017-2027 projection is overly optimistic.

Now I want to deflate the late-1990s high, to bring it down to the dashed trend line like the earlier highs. Then we can see what happens to the other trend line on the graph.

I removed the dates from the x-axis and went with the default sequential numbering instead. I displayed the trendline formula and formatted it to show a dozen decimal places. I used the trendline formula to calculate values that lie on the trend. Then, checking my work, I displayed the values (purple line) to make sure they do indeed lie on the dashed trend line.

Graph #4: Using Excel's Trendline Formula to Calculate Trendline Data Points
Now I could find when the high point of the latter 1990s occurs (first quarter 1999), what that high point value is (4.18646 percent) and what is the first quarter 1999 value of the purple line (3.02275 percent).

I want to take that whole red peak above the purple line (plus some of the points below it) and scale that all down so the red peak just touches the purple line in first quarter 1999. Get rid of the anomalous high and see how things look then.

(Who would be interested in such things? No wonder nobody reads me.)

It took some fiddling but I finally got the calculation right. The high point of the latter 1990s has been lowered and now falls directly on the dashed trend line.

Graph #5: Removing the Anomalous Peak
The red is the adjusted data. The blue shows the given data. Blue in the 1990s is substantially higher than the trend of peaks.

You may notice that the solid black trendline is lower here than on the previous graph. Excel relocated it automatically when I made that anomalous red peak "nomalous".

I cleaned up the graph, got rid of the green line and the dashed line, and put dates back on the x-axis.

Graph #6: Growth of Potential GDP Without the Boom of the 1990s (red)
Come to think of it, the 2017-2027 projection now runs about as much above trend as the other highs of the red line.

And the anomalous high of the 1990s really stands out.

Wouldn't it be nice to know what happened to make potential GDP go unusually high in the 1990s? I guess everybody has a story about that. The trouble is, the story has to explain not only the big increase in potential GDP, but also the big decrease that soon followed. And it has to explain similar changes in productivity.

A lot of people will tell you the IT revolution accounts for the increase -- and that it suddenly petered out. Well yeah, I can see that the petering out happened in productivity and all. But that doesn't mean IT was the cause.

Here's my story, and it has nothing to do with IT. It has to do with money.

1. There was a significant decrease in the growth of debt from 1986 thru 1991, and the growth of total debt remained low (below 7.5%) for most of the 1990s:

Graph #7: A Sudden slowdown of Total Debt Growth, 1986-1991

2. There was a significant increase in the growth of the "funds that are readily accessible for spending" from 1989 thru 1992, and money growth remained high for some years after 1992:

Graph #8: A Sustained Increase in the Growth of Circulating Money

3. Slow growth of total debt combined with rapid growth of circulating money to create slack in the demand for credit in the early 1990s:

Graph #9: Monetary Slack led to High Potential GDP and High Productivity in the 1990s

4. Since people had more funds readily accessible for spending, the growth of total debt could remain low thru most of the 1990s:

Graph #10: The Slow Increase of the Debt-to-GDP Ratio in the 1990s

5. Combined with lower interest rates, the slow growth of debt meant that interest costs in the 1990s were lower than in the 1980s -- lower by four or five percent of GDP:

Graph #11: Reduced Financial Costs Opened a Door to Greater Production and Consumption

6. The reduced financial costs of the 1990s meant lower debt service payments:

Graph #12: Household Debt Service was Low in the 1990s

7. The reduced cost of finance left more money available for production and consumption. All else aside, the reduced cost of finance can account for the temporary but significant increases in productivity and Potential GDP that occurred in the latter 1990s. Moreover, we can do it again.

Is IT responsible for the good years of the latter 1990s? Maybe. But it could not have happened without the reduction of financial cost.

// The Excel file

Monday, February 13, 2017

Real and Nominal Debt-to-GDP Ratios

A question from the econ section of Stack Exchange:
Are debt/GDP ratios calculated with real or nominal GDP as the denominator?

As the title suggests, I would like to know whether the numbers are generally calculated with real or nominal GDP. Besides that I would also like to know whether it matters and how significant of a difference this could make.

There is an existing response that includes these remarks:
If you use real gdp as denominator and nominal debt as numerator, you end up with a number which is less clear to interpret. It is more relevant to have either both variables in nominal terms or both in real terms.

I agree. You don't want to mix nominal and real. You want either a ratio of reals or a ratio of nominals. My response:
In my experience the ratio of nominals is far more common than the ratio of reals. Nominals are useful when the topic is current spending. Reals are useful when the topic is growth apart from changes in the value of money.

GDP is the sum of one year's final spending. Given annual data for GDP and prices, there is only one year's price level embedded in any one year's GDP number.

Debt is the accumulation of borrowing (less repayment) over many years. So the price levels of many years come into play even when only one year's nominal debt is converted to a real (inflation-adjusted) number.

Because many years' price levels are embedded in one year's debt, the calculation of real debt is not the same as the calculation of real GDP. Because the calculations differ, the ratio of reals is not identical to the ratio of nominals.

People often assume that the calculation used for real GDP can also be used for real debt. Using the same calculation gives a ratio of reals that is identical to the ratio of nominals. When the topic is current value ("how much is it now") no harm is done by this mistake. But when the topic is growth ("how much bigger is it now") the wrong calculation gives incorrect information ("The public debt remained fairly constant from the late 1940s through 1981") and may lead to serious or fatal errors in policy.

Sunday, February 12, 2017

Where no Arthurian has gone before

I was looking at FGTCMDODNS for the millionth time, looking for something with more recent data actually, looking in the "related content" at the bottom of the page.

Under Sources it says More Releases from Board of Governors of the Federal Reserve System (US). I said okay and it brought me to a page listing 33 categories of the kind of stuff that always seems to interest me, including
Banking and Monetary Statistics, 1914-1941 (1,993)
H.6 Historical Data (6)
G.20 Finance Companies (183)
Mortgage Debt Outstanding (89).

I was like a kid on Christmas. I got a ton of things to open and look at and toss aside.

H.6 Historical Data turns out to be a few discontinued series on M3 and components.

Then there is G.20 Finance Companies, which offers Domestic Finance Companies, Total Assets, Outstanding -- shown here as a percent of GDP:

Total Assets of U.S. Finance Companies
Runs flat from the mid-1950s to the 1980 recession. These are not the "flat" dates I usually find. Then a severe uptrend, with a peak at the end of 2004. That's the earliest crisis-related peak I've seen. That's interesting.

And then in the Mortgage Debt Outstanding category there is Mortgage Debt Outstanding, All holders. Here it is, shown as a percent of GDP:

Mortgage Debt Outstanding as a Percent of GDP
It shows a persistent increase in mortgage debt except in the latter 1960s and -- surprisingly -- in the 1990s. And it shows a "world's tallest volcano" type of peak, the one that erupted in crisis a few years back. It's that peak, I think, that leads people like Dirk Bezemer and Michael Hudson to focus on mortgages as "the center of the bubble economy". The root of the problem, as it were, in their view.

Here is the same Mortgage Debt Outstanding in a less evocative form:

Mortgage Debt Outstanding as a Percent of Total Credit Market Debt Owed
Looking at it as part of Total Debt, mortgage debt was lower at the pre-crisis peak than it was in 1961. Mortgage debt was lower at the pre-crisis peak than it was from 1961 to the mid-1980s.

The crisis was not caused by mortgage debt being too high. The crisis was caused by debt in general being too high. Total debt was too high. Mortgage debt was only part of the problem.

Apparently I have been here before.