“One can usually pretend that there is a logic to the distribution of wealth — that behind a person’s prosperity lies some rational basis, whether it is that person’s hard work, skill and farsightedness or some ancestor’s,” writes J. Bradford DeLong. “Inflation — even moderate inflation — strips the mask.” DeLong is an economic historian at the University of California, Berkeley, a former deputy assistant secretary of the Treasury and the author of “Slouching Towards Utopia” — a new book about the wave of economic growth that transformed the world in the 20th century. In it, he argues, among other things, that inflation isn’t just economically damaging; it’s one of the most destabilizing, destructive forces in all of politics. Left unchecked, it has the power to swing elections, erode the foundations of core social institutions and usher in wholesale changes in political and economic regimes. [You can listen to this episode of “The Ezra Klein Show” on Apple, Spotify, Amazon Music, Google or wherever you get your podcasts.] That’s exactly what happened the last time inflation was this high. In DeLong’s telling, the inflation crisis of the 1970s was weaponized to discredit the reigning New Deal economic order and helped give rise to the small government, pro-market political turn of the 1980s — the consequences of which we are living with today. So I wanted to have DeLong on the show to walk me through that story and some of the questions it raises: Why is inflation is so uniquely politically destructive? What are the right — and wrong — lessons to take from the experience of the 1970s? What kinds of political transformations could today’s inflation could bring about? We also discuss why inflation spiraled out of control in the 1970s (and whether it could have been stopped sooner), the efficacy of price controls as a way of taming inflation, why DeLong believes it’s a mistake to take the 1970s comparisons too literally, how unchecked inflation can decimate social trust, how economic thinking became obsessed with “moochers” and “slackers” in the 1980s and ’90s, whether the 2007-08 financial crisis brought an end to the neoliberal era, what DeLong would say to his younger self serving in the early Clinton administration and more.

This week, the S&P 500 entered what analysts refer to as a bear market. The index has plunged around 22 percent from its most recent peak in January. Many growth stocks and crypto assets have crashed double or triple that amount. New home sales declined 17 percent in April, causing some analysts to argue that the housing market has peaked. And, in response to rising inflation, the Federal Reserve just approved its largest interest rate increase since 1994, meaning asset prices could dip even lower. To understand what’s happening in the stock market right now, you have to understand the era that preceded it. Rana Foroohar is a columnist at The Financial Times, and the author of several books on the economy including “Makers and Takers” and “Don’t Be Evil.” Her view is that a decade-plus of loose monetary policy has been the economic equivalent of a “sugar high,” which kept the prices of stocks, housing and other assets going up and up and up, even as the fundamentals of the economy have been eroding. This “everything bubble,” as she calls it, was bound to burst — and that’s exactly what she thinks is happening right now. So I wanted to have her on the show to discuss the economic choices — and lack thereof — that led to this point. We also discuss why the increasing power of the financial sector hasn’t resulted a stronger economy, whether the housing market has indeed hit its peak, the massive missed opportunity for public investment while interest rates were low, why policymakers treat asset price inflation so differently from other types of inflation, the true costs of the meat we eat and clothes we wear, why crypto represents the apotheosis of hyper-financialized capitalism, why I’m skeptical of the argument that we’re moving rapidly toward a less globalized world and more. Book recommendations: All That She Carried by Tiya Miles Beautiful Country by Qian Julie Wang The Rise and Fall of the Neoliberal Order by Gary Gerstle We're hiring a researcher! You can apply here or by visiting nytimes.wd5.myworkdayjobs.com/News Thoughts? Guest suggestions? Email us at [email protected]. You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs. “The Ezra Klein Show” is produced by Annie Galvin, Jeff Geld and Rogé Karma; fact-checking by Michelle Harris and Andrea López Cruzado; original music by Isaac Jones; mixing by Jeff Geld; audience strategy by Shannon Busta. Our executive producer is Irene Noguchi. Special thanks to Kristin Lin and Kristina Samulewski.