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To the editor:

The best way to understand inflation is to look at it through the lens of history. When you can relate personal events to historical events, the history can shed more light on an issue than a television sound bite.

I can certainly relate my life’s history to inflation. Our current mortgage is at 2.875%, but I have also had a mortgage at over 15%. Inflation in a twist of fate also forced me to change careers in 1982. Some background helps to better understand it all.

I grew up in nearby Lewisville back in the 50s when it was a rural place with a functioning feed mill, a couple of general stores, two gas stations, and a hardware store. After college, I moved to Canada to raise cattle because even then, land was too expensive in North Carolina and Virginia for cattle. By 1980, we had been farming for eight years. Our cattle herd of registered red and black Angus had reached 200. Like most farmers we had an operating loan. Ours was a relatively modest one of $100K. Interest rates in Canada and the United States hit levels that today seem almost impossible to believe.

In Canada, the prime rate hit 21% which meant we were paying 22% or $22,000 yearly in interest. In the US prime was a little lower.

“The US 30-year fixed mortgage rate reached a high of 18.4% in October 1981, which was the highest point in modern history. Mortgage rates remained high throughout the decade, finishing at around 10%.”

The reasons behind the rise were complex but included, the Vietnam War, high energy costs, and a revolution in Iran among other things. The effects were long lasting.

In 1964, when this story began, inflation was 1 percent and unemployment was 5 percent. Ten years later, inflation would be over 12 percent and unemployment was above 7 percent. By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent.

We were fortunate to own our 400 acres of farmland when we made the decision to disperse our cattle herd. It took a year’s worth of planning but in October 1981, we sold all our cattle and paid off most of our debts. We still had all our equipment but our land was not really suitable for anything but hay and pasture.

That next summer I went to work in town and within a couple of years, I went to work for Apple Computer, and we were faced with buying our first new house in Halifax, Nova Scotia. The 1984 mortgage rate we got was something over 15%. Those interest rates were most caused by energy shortages. It took a sustained period of high interest rates and a recession to break the cycle.

If you fast forward 36 years and three houses later, we have been living on the North Carolina coast for 15 years while I worked remotely for a Blacksburg, Va. network consulting firm. It is late summer of 2020, and we are in the midst of a pandemic. We want to move, but we have to sell our house first. We put it on the market and it sells within three weeks.

We had already settled on Davie County because it matched my memories of Forsyth County where I grew up. In the early October we have a list of 30 Davie homes that we have sent to our real estate agent.

By the end of October, all but 15 on the list had sold. By the time we get to Mocksville in early November, there were only three houses left for us to see.

We were exceedingly lucky. We found a house that had been built in 2018, but was not quite finished. The front yard had no grass so we called it the house with the bad yard but it had a lot of other things going for it, and I knew we could fix the yard. We made an offer and it was accepted in

November 2019. The builder, a well-known local builder, told us that if he had built the house after August 2019, the house would have cost $100K more because of the pandemic-induced price explosion on building materials. He shared that plywood had gone from $12 a sheet to $48 a sheet. That would have put the house out of our price range. Our builder put off building his own new home because of the materials price explosion caused by the pandemic.

As we finally got into our new house in February 2021, we found that there were still pandemic-supply shortages. We couldn’t get the refrigerator or stove that we wanted and we were limited to one manufacturer. We still had to wait a week after we moved in for our refrigerator.

Now here we are in 2024, barraged with commercials about inflation being the worst problem ever. History tells otherwise. It also tells us that normally when you have a time with red hot demand, the fix is high interest rates and a resulting recession with people losing jobs. Over a million people lost jobs in the early 80s.

Recently I saw a local business person introduce his TV commercial by saying that the Triad area was in the biggest boom since World War II. I tend to agree with the local business man, there is certainly more housing construction going on in our area than I ever imagined. There are few if any businesses that don’t have a “Now Hiring” sign. Our local economy feels strong.

However, not only did the pandemic have an impact on building supplies, it also had a huge impact on gasoline and food prices. Those low December 2019 gasoline prices were the result of demand for gasoline falling off a cliff. People were staying at home, working and studying there if possible. Gasoline is a worldwide commodity, its pricing defies politicians of both parties.

Not only did the pandemic create shortages because of fewer workers but people wanted different things. Manufacturers are just now catching up but they are having to pay workers more to get them to come back.

I see good signs, there are lots of homes being built locally, interest rates have started to come down, food prices have stabilized but at a higher level than any of us like. Yes, my Quarter Pounder costs more, and I expect part of those costs come from higher wages. I am happy to pay that small increase. While my salary hasn’t gone up, at my age, I am happy to have a job that I can do from home.

Davie County has some smaller farmers that I can easily relate to from my 10 years of farming. We are so lucky to have these local farmers still growing vegetables and livestock for the area. I have gotten to know a few of them. I buy their products every chance I get. I don’t think this bout of high interest rates is going to force any local farmers that I know to give up on farming like it did me. They have already had to adapt to much higher fuel, fertilizer, and equipment costs than I faced. Luckily today’s interest rates are nowhere near what we faced. Big events like the pandemic, the energy crisis, the Iran revolution in the 80s have huge impacts that don’t neatly match election cycles. Looking at history through a personal lens helps us understand that.

David Sobotta

Mocksville