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Great writeup! I did want to mention that "Shrinkflation" is not the right term for the phenomenon of the 1970s, that is "stagflation" ("stagnation" + "inflation"). "Shrinkflation" is when the size of products shrinks while the price remains unchanged to hide the impacts of inflation. The reason it was so hard on the economy is that there is typically a positive correlation between inflation and economic growth. As inflation increases, the economy grows faster, and as it decreases, the economy shrinks. Stagflation, when the economy shrinks and inflation increases, removes a lever that the central bank typically has to get the country out of a recession because they can't increase inflation to encourage economic growth. The reasons that usually works are complicated and beyond the scope of a random Lemmy comment.
Thank you, brainfart on my part.