The headlines about inflation in 2022 report that we have the biggest jump in prices since the early 1980s. So what exactly was going on back then?

I dug out inflation data from the last great run-up in prices, in the 1970s and early 1980s, to see what was similar to what we’re experiencing now, and what was different. The inflationary slog of the 1970s was the worst bout of price hikes in modern times. It began in the 1960s, with a flood of government spending on the new Great Society programs and the Vietnam war under President Lyndon Johnson. Federal Reserve policy under President Nixon in the 1970s was too loose for too long, adding to inflationary pressures. Then came a series of energy shocks that made a bad situation worse.

The highest level of inflation since World War II came in March 1980, when the annual increase in the consumer price index was 14.8%. Inflation is high now, at 8.5%, but far from those record readings. The last time it was that high was in December 1981, when inflation was finally on its way down, for good. But that was after a prolonged period of consumer pain that coincided with three recessions and drove President Jimmy Carter from office after one term.

Then, as now, the biggest price hikes involved energy. In fact, energy inflation 42 years ago was worse than it is now. The 12-month increase in gas prices in 1982 was 68%. Today, it’s a mere 48%. The cost of household energy for heat and electricity was up 27% in 1980, compared with 15% today. Russia’s barbaric invasion of Ukraine, and the subsequent sanctions on the Russian economy, have contributed to energy inflation today. But there’s nothing new about energy shocks.

In the 1970s, external shocks included the 1973 OPEC oil embargo related to the Yom Kippur war and the 1979 Iranian revolution. Then, in 1980, the eight-year Iran-Iraq war began. From 1970 to 1980, the price of oil more than quintupled. The average pump price jumped from $0.36 per gallon in 1970—$2.74 today—to $1.19 per gallon in 1980, which would be $4.40 today. In 1973, Commerce Secretary Peter Peterson declared, “the era of low-cost energy is almost dead.”