top of page
Search

When We Use a Word Like 'Inflation,' Do We Know What We're Talking About?



              At least once a day I hear Trump or one of the other GOP bullshit artists say something about how ‘inflation’ is still bad. And yes, there was a brief period in 2022 when both consumer prices and producer prices jumped above 10% on a year-to-year basis.

              Consumer price increases have now gone back down to under 4%, but within the overall pricing structure there are still certain costs that remain stubbornly high, in particular housing and rent, which hits the less fortunate among us hardest.

              At the same time, I am increasingly convinced that we are overly sensitive to the word ‘inflation,’ because everyone knows about the post World War I inflationary spiral which brought about the collapse of the Weimar Government in 1933 and the advent of the Hitler Fascist regime. And given that so much media blah-blah-blah has focused on determining whether or not Trump is a Fascist, it figures that a word like ‘inflation’ would become a touchstone for the current political debate.

              The only problem is, actually there are two problems which somehow don’t seem to get addressed when the ‘inflation’ word is mentioned these days. First is the fact that today’s economy is totally different from the economy of either Germany or the United States when the issue of inflation first became a paramount concern in politically driven narratives, never mind how governments chose to respond to the inflationary threat.

              Second, and perhaps even more important, is whether the way we measure how much the money in our pockets will buy is an accurate analysis which really explains whether our personal financial situations are getting better or becoming bad. Let me briefly discuss the second issue first.

              This morning, I took my daily, one-mile exercise by walking around the inside perimeter of my local Wal Mart twice. In the process, I looked at the labels of eight or nine different items to see where they were made.

              The only item which was actually manufactured in the United States was a bag of charcoal, which ironically, happens to be the very first consumer product manufactured in this country when we started off the Industrial Revolution by using fast-moving water to power mills. Every other item which I picked up this morning, and granted, my research was random at best, was made in China, or India, or some other offshore place.

              I ended up my walk by purchasing two pairs of sweatpants made by Hanes, which is a big brand name in athletic clothes. The label said Hanes, but the pants were actually made in Cambodia. Didn’t we bomb the shit out of Cambodia fifty years ago?

              I walked out of Wal Mart, got into my car, and drove across the parking lot to get a cup of coffee at Panera before going home. A 16-ounce cup of hot water with a few crushed coffee beans only cost three fucking dollars and twenty fucking cents.

              I had to wait ten minutes or so because the kid who finally gave me my paper cup and took my money was busy doing something else. Could he be bothered to apologize because I had to stand there until he showed up? Of course not – after all, the more the coffee costs, the, longer you usually have to wait.

              Now, read the next couple of paragraphs very carefully okay? According to the Commerce Department, the Consumer Price Index will decline to around 2.4% this year.  It increased by 8% in 2022 and by the end of 2023, the so-called grocery basket cost 20% more than it cost in 2021.

              Ready? Restaurant prices in January were up more than 5% over the same prices for January 2023. And the shift from ‘eating in’ to ‘eating out’ does not seem to be slowing down. If anything, it appears to be speeding up.

              Meanwhile, if the cost of groceries is declining, then this trend not only makes consumption of food at home more of a bargain, but it also means that the increased costs of food on those restaurant menus isn’t because the managers of those restaurants have to pay more for their raw food.

              When I was in college, my Economics 101 professor said that inflation represented a decrease in the purchasing power of available currency, and the way to control inflation was to produce more purchasable goods or keep the cost of doing business down, or both.

              I never once heard this guy mention the word ‘choice’ when he was telling us about the poor consumer whose life savings were disappearing because the prices of all those ‘essential’ items keep going up.

              Want to tell me what’s so essential about a cup of coffee for three bucks and change?

             

             

             

             

           

14 views0 comments

Recent Posts

See All

Komentáře


bottom of page