We were in a horrible recession in the early 1980s. Inflation was through the roof. Our ability to fight the serious recession was hampered--and we had a term for it, stagflation. In some ways it makes the current recession seem a bit tamer.
You can see from the graph below that the US was experiencing nearly 15% inflation. Mortgage rates were so high that it put the American dream of owning a home on hold for several years. And a higher percentage of people were out of a job than today (current unemployment rate is 9.5%).
The United States and the Union of Soviet Socialist Republics (USSR) were engaged in a Cold War. There was the constant threat of the annihilation of civilization through nuclear warfare. A Doomsday Clock would reveal how close to "midnight" the planet was to extinction.
The US endured the financial pain of Black Monday--a day when the stock market crashed: The Dow lost 22.6% of its value in one day.
President Ronald Reagan survived an assassination attempt. In the operating room, Reagan quipped, Please tell me you're all Republicans. Doctor Giordano, a liberal Democrat, replied, We're all Republicans today.
It was with this backdrop that our president could humor us--and at least for a moment get us to forget the worries of the day, as I hope you will enjoy by watching the following video.
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