It’s Not the 1970s. And That’s the Problem.
Yesterday I picked up my son from school with a Bloomberg podcast playing, an oil expert going deep on the permanent changes to global energy supply. Even if the war ends tomorrow, the infrastructure decisions being made right now can’t just be undone. My son’s review of the podcast was not great. It wasn’t just turn it off, it was a series of questions about why I would even be so dumb as to listen to something as boring as this. Downright rude.
I explained why I listen to this stuff. Not just because I find it genuinely interesting, but because understanding these shifts is part of how I manage other people’s money. After a two-minute pause the questions started, into why someone would have me manage their money. OUCH. Okay son, no bike for you.
We got into inflation. I walked him through the basics. He picked it up fast. Real fast. The moment it clicked was when he put it together himself, even if he has the same amount of money, it buys less candy. I could see it in his eyes. Less candy even though I still have the money I saved?
By the time we pulled into the driveway he had a new problem. He needed me to invest his money as soon as we got inside. How quickly he went from “why would someone ever let you manage their money” to “YOU need to invest this $5 as soon as humanly possible.”
Most adults never make that connection as quickly as he did. The ones who do tend to ask the right question next: not “how do I make more money,” but “how do I make sure the money I have doesn’t quietly lose what it’s worth.”
That question is worth asking right now. And the answer starts in Los Angeles.
Sammy Adams had his own LA story back in 2013, waking up on Sunset, maxing out the credit cards, living it up til the morning. Good song. Different kind of bill. The LA story happening right now isn’t at the minibar. It’s at the bargaining table.
This week, the second-largest school district in the country cut a deal with its teachers union, an average salary increase of 13.86%, with a minimum of 8%, on top of a 21% raise the same union won in the prior cycle. Support staff secured 13% over three years for workers averaging $35,000 a year. Principals got 12.15%.
Congratulations to the teachers. They deserve it. But it’s not just them, the Longshoremen, UAW, Pilots, Nurses, Machinists, and many others. Those workers demanded and won raises for the same reason we want one. Inflation is brutal.
Now let me tell you why your grocery bill isn’t going down, and why LA is just one piece of a much bigger story.
It’s Not the 1970s
Every time inflation picks up, someone pulls out the 1970s. The stagflation decade. Nixon’s price controls. Paul Volcker raising rates to 20% and deliberately breaking the economy to kill it.
Fair reference. Wrong lesson.
The Great Inflation ran from roughly 1965 to 1982. A household that held $100,000 in cash from 1972 to 1982 lost approximately 60% of its purchasing power. The S&P 500 lost roughly 20% of its real value over that decade. Long-term bonds were even worse, down about 3% per year after inflation as the 10-year Treasury yield went from roughly 6% to 13%. The 60/40 portfolio was a disaster for ten years straight. The people who came out okay were holding real stuff, commodities, real estate, energy, gold, things that go up with inflation instead of against it.
Here’s what the comparison always misses: the 1970s was inflation with nobody spending.
The Baby Boomers, born 1946 to 1964, were 6 to 34 years old when the decade began. People spend the most money between 35 and 54, buying homes, furnishing them, raising kids, replacing cars. Boomers weren’t anywhere close to that. So you had two oil shocks that quadrupled energy prices, a productivity slowdown, and serious cost-push inflation, hitting an economy where the big wave of consumer spending was still a decade away. Inflation without growth. Stagflation. The worst version of this.
Volcker’s cure was brutal precisely because there was nothing underneath it. The economy survived 20% rates only because the Boomers were right around the corner, about to drive the biggest expansion in American history through the ’80s and ’90s.
Today we’re running the same movie backwards. That matters a lot.
What we’re living through looks like the 1970s on the surface. It isn’t. In the 70s, supply shocks hit an economy where nobody was spending. Today supply shocks are hitting an economy where everybody is spending. That’s why we have inflation with growth instead of stagflation. It doesn’t feel great. But it ain’t the 70s.
The Labor Spiral, Sector by Sector
Los Angeles teachers. The longshoremen. The machinists. The pilots. The UAW. Each contract a headline, each headline a data point. And this week, the LA teachers again, a 13.86% average raise on top of a 21% raise from the cycle before. Starting to see a pattern.
While the ink was still drying on that deal, 34,000 New York City doormen, porters, superintendents and building workers voted today to authorize a strike. Contract expires April 20. Workers could walk April 21, disrupting services across 3,500 residential buildings and more than 1.5 million residents. Their union president put it plainly: “While the residential real estate industry is collecting record high rents, this city is becoming more unaffordable for working people every day.” Last time these workers struck was 1991. Thirty-five years of quiet, and now they’re at the table with the same grievance as everyone else.
Construction is telling the same story with worse numbers. The industry needs roughly 439,000 additional workers in 2025 just to meet demand, climbing toward 500,000 in 2026. Home building wages rose 9.2% in a single year. The labor shortage is costing the economy $10.8 billion a year. And roughly 41% of the current construction workforce will retire by 2031. You can’t train your way out of that fast enough. Decades of steering young people into four-year degrees instead of the trades created a hole that higher wages don’t fill overnight.
When you can’t find the workers you need, you pay up for the ones you can get. That cost lands in every new home, every road, every fried chicken restaurant, every data center, every factory. It doesn’t go away. It compounds.
The Ships Moving Oil Are Quietly Dying
This is a small piece but it illustrates what I am trying to say.
VLCC. Very Large Crude Carrier. Two million barrels per ship. The supertankers that move the energy that runs the world. Frontline, not the news show, said this in their most recent SEC filing: “We continue to observe the aging of the tanker fleet as new deliveries have slowed with muted recycling activity.”
That’s a very polite way to say things are getting serious. As of early 2026, 41.1% of the global VLCC fleet is 15 years or older. Nearly 18% is over 20 years old, well past when these ships are supposed to be retired. One new VLCC was delivered in all of 2024. One. The historical average is roughly 40 per year. The fleet keeps growing in number but shrinking in what it can actually do, since older ships are slower and less efficient.
The rates tell you where this is heading. Frontline locked in 92% of its Q1 2026 VLCC days at $107,100 per day. Spot rates hit $200,000 per day in February, levels not seen since the COVID storage spike of 2020. Management called it potentially “an unprecedented period for the tanker industry” and then backed that up by ordering nine new vessels for $1.224 billion while selling eight older ones for $831.5 million. When a company does both at once, they believe what they’re saying.
At $107,000 a day to move oil, that cost runs through every barrel refined, every product shipped, every mile driven. Oil goes into everything. The cost of moving it goes into everything.
We Have Oil. A Lot of Other Countries Don’t.
In 1973 we were on the wrong side of the OPEC embargo. American production was declining. The oil shock was aimed directly at us.
Today the US produces a record 13.6 million barrels per day, more than any country in history. We have the oil. What we can’t do is avoid global pricing, a Permian barrel sells at the same world price as a Riyadh barrel. That stings at the pump, but the money from oil stays here. Wages, royalties, equipment spending, it circulates through our economy.
Countries with no domestic production aren’t so lucky. Japan’s economy contracted in early 2025, with GDP growth now projected at just 0.5% for the year. Germany has been flirting with recession. The developing world is watching energy bills drain their foreign reserves with no end in sight. They are living the 1970s right now. Thankfully we aren’t.
Our inflation comes from too much demand chasing too little supply. Theirs is a straight up supply shock with nothing underneath to soften the landing.
The full energy picture, production, geopolitics, the Strait of Hormuz, and what it means for specific investments, is coming in the next piece.
A Wage Spiral, Just Without the Union Cards
In the 1970s the wage-price loop ran through big union contracts with automatic inflation adjustments. Workers got raises, businesses raised prices, repeat. About one in four American workers was in a union back then, nearly three times today’s rate.
Union membership is a fraction of that now. But what’s replaced it is harder to stop: group by group, sector by sector, workers are catching up on wages they lost to inflation over the past few years. Teachers. Doormen. Construction workers. Port workers. Pilots. Each group negotiates separately, but every deal sets the expectation for the next one. The signal moves through the whole economy whether there’s a union card involved or not.
Inflation stuck between 3 and 5%. Growth holding. Fed staying cautious. Feels manageable. That’s the trap.
The Millennial Spending Peak
I’ve been watching the demographic data on this for a while, and I think most people are getting the timeline wrong, which matters a lot for how you think about the next few years.
Millennials, born 1981 to 1996, currently 30 to 45, are the largest generation in American history, roughly 41.5% bigger than Gen X. Unlike the Boomers in the 1970s, they’re right now in their peak spending years. People spend the most between 35 and 54. Millennials are right in the middle of that. This is why we have growth alongside inflation right now. Lots of people buying lots of stuff.
But models that say this spending wave runs clean through 2035–2040 are missing what actually happened to this generation. Millennials delayed everything by 5–7 years compared to Boomers, marriage, kids, first home. Then COVID compressed all that pent-up spending into roughly 2019–2023. Low rates. Stimulus checks. Remote work unlocking suburban purchases. The furniture wave, the appliance wave, the first car, the second kid. A huge chunk of the big Millennial spending surge has already happened.
The oldest Millennials turn 49 this year. They’re starting to think about retirement accounts, their kids’ college tuition, and paying down debt rather than buying new stuff. And unlike the Boomers at the same age, this generation is carrying serious debt: student loans stacked on top of 7% mortgages stacked on top of car payments. That changes the math.
My read is that spending from this generation peaks somewhere in the 2028–2030 window, not 2035. Spending doesn’t just fall off Angels Landing (Zion National Park), it is more like a descent from the top of Angels Landing.
The one wildcard is inheritance. Millennials stand to inherit over $68 trillion from their Boomer parents. Boomers are 62–80 years old right now. That money starts flowing in earnest through the late 2020s and into the 2030s. It won’t add up to what 75 million people in their spending prime can do, it mostly goes to the top, but it softens the slowdown.
What Comes Next
So spending slows. Inflation possibly cools to 3–4%. And then the question that determines everything is: did the supply problems get fixed while all this was happening?
Almost certainly not. The construction workforce gap is a 15-year problem at minimum. The tanker orderbook doesn’t resolve until the mid-2030s. The average home in the United States is 44 years old, the oldest in history. The shortage of skilled workers in trades, nursing, and transportation was built up over 30 years. You don’t fix that in a rate cycle.
If supply stays broken while spending slows down, that’s where it gets really interesting.
Everyone talking about inflation right now has it in one of two buckets: either it’s beaten, or we’re already in a 1970s replay. I’d say both are wrong.
The real 1970s moment isn’t happening now. It’s what comes after Millennials slow their spending, if the supply problems still haven’t been fixed by then.
Think about it: spending slows as the biggest generation in American history starts saving instead of buying. But the worker shortage is still there because the pipeline never got rebuilt. The tanker fleet is still aging because the orders never came. Housing supply is still tight because the construction workers were never there. Energy infrastructure is still thin because nobody could agree on what to build for a decade.
You get the 1970s combination, supply problems meeting weak demand, but running in reverse with nothing behind it. The Boomers rescued the economy after the 1970s. Gen Z, smaller, carrying its own debt, entering a job market being reshaped by AI, isn’t going to play that role.
And the Fed can’t Volcker their way out of it. Raise rates and you kill what little demand is left. Cut rates and nothing changes on the supply side. You can’t lower interest rates to build a new supertanker or train a plumber.
That’s the scenario that’s genuinely hard to fight, because it shows up quietly after most people have already moved on from talking about inflation. Everyone assumes the danger’s over because they’re tired of thinking about it. That’s wishful thinking with a diploma.
A World That’s Over
The 40-year period from 1982 to 2022 was weird. Falling rates, cheap global labor, tame inflation, China making everything inexpensively, all of it held at the same time for the better part of four decades. The investment ideas built inside that window weren’t wrong. They were just built for a world that’s over. There’s a longer history here, going back well past the 1970s, through episodes most investors have never studied, and I’ll be covering it in the next piece.
Endurance Capital at Harvest Lane
This is where Endurance Capital comes in, how I actually build and manage portfolios at Harvest Lane.
The idea is simple. Instead of building a portfolio to win in this environment or that one, I build a permanent core that can hold up when the environment changes. Precious metals, value equities, real assets, dollar assets. A period of supply shocks looks different from a period of too much demand, which looks different from a period of financial repression. Each one rewards different things. A portfolio built only for the last 30 years isn’t ready for the next 20.
I look at four things to drive conviction: demographics, geopolitics, economics, and innovation. Demographics tells you who’s spending and when. Geopolitics tells you the energy and supply chain picture. Economics tells you where wages and labor are going. Innovation tells you where the real disruptions are coming. None of them alone tells the whole story. Together they build a view that goes beyond the next Fed meeting or election cycle and into the forces that actually move purchasing power over years and decades.
The Bottom Line
The households that got destroyed in the 1970s weren’t reckless. They were saving 11.7% of income and doing everything they’d been taught to do. What they were doing was fighting the last war, positioned for the stable, low-inflation world of the ’50s and early ’60s. By the time they understood the environment had changed, the damage was done.
The window to think about this differently isn’t five years from now. It’s now, while growth is still running, while asset prices are still supported, while most people are still convinced inflation is yesterday’s story.
At 3% annual inflation, you lose roughly a quarter of your purchasing power over ten years. No crisis required. No crash, no headline. Just time doing what it does when you’re not paying attention. My son figured out the candy problem in about four minutes. The question isn’t whether you understand it. The question is whether your portfolio is actually positioned for the answer.
None of this means the economy is heading off a cliff, or that the next decade is going to be miserable, or that you should do anything rash. It means understanding what’s actually driving prices, tracking the data as it develops, and making decisions based on where the evidence points rather than where the last cycle went. The investor who panics because “it’s the 1970s again” is making the same mistake as the one who does nothing because “inflation always comes back down.” Both are fighting the last war.
Sources
LAUSD / UTLA Tentative Agreement — Average 13.86% increase, minimum 8%. Los Angeles Today / CBS Los Angeles, April 13, 2026.
SEIU Local 99 — 13% over three years, average pay $35,000. LAist, April 2026.
AALA Principals Agreement — 12.15% increase. LAist, April 13, 2026.
Household Purchasing Power 1972–1982 — ~60% loss on $100,000 in cash. CalcVault Inflation Calculator, citing U.S. Bureau of Labor Statistics CPI-U data. thecalcvault.com/inflation-calculator/
1970s Market Performance — S&P 500 approximately −20% real over the decade; long bonds −3%/year after inflation; 10-year Treasury yield from ~6% to ~13% over 1973–82. WealthGen Advisors, “Navigating Stagflation: Lessons from the 1970s and Today,” May 2025. wealthgenadvisor.com
Peak Spending Ages — 35–54. U.S. Bureau of Labor Statistics, Consumer Expenditure Survey, via Carry.com, December 2025. carry.com/learn/spending-habits-by-generation
The Great Inflation — Two oil price shocks, productivity slowdown. Federal Reserve History, “The Great Inflation.” federalreservehistory.org/essays/great-inflation
Construction Workforce Demand — 439,000 workers needed in 2025, ~500,000 in 2026. Associated Builders and Contractors (ABC), via RedHammer, February 2025; Randstad 2026 Construction Salary Guide.
Home Building Wages — Non-supervisory wages +9.2% year-over-year. Home Builders Institute (HBI) Fall 2025 Construction Labor Market Report, via NAHB, October 2025. nahb.org
Skilled Labor Shortage Cost — $10.8 billion annually. HBI Fall 2025 Construction Labor Market Report, via NAHB, October 2025. nahb.org
Construction Workforce Retirement — 41% by 2031. NCCER / Associated General Contractors of America (AGC), via CIC Construction, February 2026.
Frontline PLC SEC Filing Quote — Frontline PLC Form 6-K, U.S. Securities and Exchange Commission, 2025. sec.gov/Archives/edgar/data/0000913290
VLCC Fleet Age — 41.1% aged 15 or older, 17.9% over 20 years. Frontline PLC Q4 2025 Earnings Release and Fleet Data, February 27, 2026.
VLCC Deliveries — One delivered in 2024; historical average approximately 40 per year. Hellenic Shipping News / Tankers International, April 2025. hellenicshippingnews.com
Frontline Q1 2026 Rate Bookings — 92% of VLCC days booked at $107,100/day. Frontline PLC Q4 2025 Earnings Release, February 27, 2026.
VLCC Spot Rates — Approximately $200,000/day, February 2026. The Maritime Executive, February 25–26, 2026. maritime-executive.com/article/vlcc-day-rates-soar-to-rare-heights
Frontline Fleet Transactions — “Unprecedented period for the tanker industry”; $1.224 billion in newbuilds; $831.5 million vessel sales. Frontline PLC Q4 2025 Form 6-K, February 27, 2026. stocktitan.net/sec-filings/FRO/
US Crude Oil Production — Record 13.6 million barrels per day in 2025. U.S. Energy Information Administration (EIA), Short-Term Energy Outlook, March 2026. eia.gov/todayinenergy/detail.php?id=67404
Japan Economic Outlook — Q1 2025 GDP contraction; full-year growth projected at 0.5%. Deloitte, “Japan Economic Outlook,” July 2025; OECD Economic Outlook, June 2025.
1970s Union Density — ~29.1% in 1970 declining to 23.4% by the late 1970s. CEPR, “Union Membership and Income Inequality”; Congressional Research Service, “A Brief Examination of Union Membership Data,” June 2023. cepr.net; congress.gov/crs-product/R47596
Millennials vs. Gen X Size — 41.5% larger. Fortune, citing Bill Smead, CIO of Smead Capital Management, July 2022. fortune.com/2022/07/18/millennials-boomers-inflation/
Millennial Life Milestones Delay — Marriage, children, and home purchase delayed by 5–7 years vs. Boomers. Fortune / Smead Capital Management, July 2022.
Millennial Wealth Transfer — $68 trillion. Cerulli Associates, widely reported; via Kasasa.com.
1960s–1970s Personal Savings Rate — Averaged 11.7%. USAFacts, “Why Aren’t Americans Saving As Much As They Used To?” May 2025. usafacts.org
10-Year Purchasing Power Loss at 3% — Approximately 25.6%, calculated as 1 − (1/1.03)^10 = 0.256; confirmed via CalcVault Inflation Calculator. thecalcvault.com
NYC Building Workers Strike Authorization — 34,000 workers, 3,500 buildings, more than 1.5 million residents, April 20 contract expiration. 32BJ SEIU / Fox5NY / CBS New York, April 15, 2026.
32BJ SEIU President Quote — “While the residential real estate industry is collecting record high rents, this city is becoming more unaffordable for working people every day.” Manny Pastreich, Fox5NY, April 15, 2026. fox5ny.com