I have to admit that I am confused about inflation. I understand that the generally accepted idea is that inflation is a condition where prices are generally increasing or alternatively stated, the dollar has less buying power. That part isn’t confusing. The confusing part probably has to do with how our government measures inflation and especially how the media talks about it.
Prices have been going up forever and we weren’t screaming about inflation. Is it inflation only when grocery and gas prices increase or are we just screaming now to cover failures in business planning?
If you look at what things cost over the last decade, it seems true that most things cost more and some things cost a lot more.
A friend that has a daughter with Type 1 diabetes told me that the vial of insulin that used to cost $5 now costs $300. Was that viewed as inflation?
College tuition has been galloping along at a fantastic pace. U.S. Census, Bureau of Labor Statistics and National Center for Education Statistics data and found that from 1980 to 2019, college costs increased by 169%. Was that inflation?
My property taxes have doubled since I have owned this house (about 20 years). Is that inflation?
What about when a CEO gets a compensation package that hundreds of times more than his average workers salary?
When I got a raise and my employer had to pay more for my services, was that inflation? When the shares in a company I own double in price is that inflation to the person who I sell them to? It’s not inflation to me; I just doubled my investment.
When the grocer gets twice as much for the same pound of beef, is he seeing inflation like I am, or has he just secured his profit margins?
It also seems that using year over year numbers isn’t helping much. Last year was a near depression due to pandemic shutdowns. Everything was discounted to get folks to get out of their houses and buy stuff. Fast forward a year and folks are spending like crazy.
Should we expect prices to stay the same? Has anybody suggested looking at inflation over a two- or three-year period rather than year over year? No. Why not? Maybe the big scary numbers make better headlines! Maybe it’s easier to hide real price-gouging behind big scary numbers.
It certainly is to some folks’ advantage to scream about inflation while they raise prices and we all blame the “economy.” But why are so many things that aren’t in higher demand or in short supply going up in price?
We have lots of academic economists in the area. Can The Times please bring some of these experts in and go deeper into this issue so that we can better understand what’s going on.