Hang on to your wallets boys. It's going to be a bumpy ride.
Inflation: The Biggest Lie
I’m not an economist (thank goodness), I’m a Midwesterner with the good sense to know when I’m being lied to (most of the time). I have staffed a few campaigns, both partisan and non-partisan, have a degree in political science from University of Illinois at Springfield, and I know a good political game when I see one. I’m also old enough to remember the 1970s when inflation and interest rates were in double digits and the government blamed it on the price of oil. Well the price of oil is somewhere past the historic stratosphere and the government is telling us that inflation is moderate.
The current federal government has been accused of a lot of things in recent years, but truthful isn’t one of them. And, right now, this government cannot convince me that inflation isn’t running rampant in America.
Sure the Federal Reserve policy over the last six years has been to increase interest rates 15 out of 15 of the last meetings, supposedly to curb inflation, or was it supposed to slow down the irrational exuberance of the 1990s. I guess it depends on whom you believe and when. But I gotta tell you as one Midwesterner to another, inflation is out of control and I’m not so sure that interest rates aren’t about to take off as well.
If you remember the 1970s, the Middle East was very angry with the US over a number of issues, including support of Israel, the Shah of Iran and our general imperial attitude toward countries that produced the oil that America relied heavily upon to be, well, American. So the countries that produced oil decided to let us know who was in control and they embargoed their oil from our ports. That’s a nice word for cut us off cold. Limited supply.
What followed was an increase in the price of gasoline at the pumps and a general panic among us Americans. What also followed was a nearly vertical rise in the price of everything that traveled over ground, by air and by sea. That was called inflation and it increased our panic. Interest rates soon followed and the price of a house began to look beyond reach of all of us who didn’t have one. Same house. Same location. 300 percent increase in valuation.
Does all of this sound familiar? The only thing that’s different is the government keeps telling us that inflation is under control. How can that be when the price of everything I bought last year has gone up…a lot? The trees I bought a few years ago for $30 are $100. The meat I bought for a barbecue the same time last year has almost doubled this year. The price of a new car seems to average $30,000 and the house I bought when my son was born has tripled in assessed valuation before he enters his senior year in high school.
If I were an economist, I could explain each and every one of these things by talking about supply and demand and Mad Cow Disease, the War on Terrorism or real estate speculation, but as I said, I’m not an economist. I’m just a Midwesterner, but I’m here to tell you somebody in our government isn’t telling us the truth to us about inflation.
Maybe they call it something else now. Maybe it’s called Economic Fusion (confusion?) or the New New Economy. Regardless of the name, just like inflation, it’s killing those of us caught in the middle of it. Whatever it is we can’t afford it anymore.
I miss inflation. At least we knew what the enemy was and, unlike terrorism, felt that we had some kind of control over it. Or maybe we were lying to ourselves then too.
At the same time infflation was downsizing the buying power of our dollars, interest rates were in double digits! Back to the house example; in 1969 the house was worth $60,000; by 1979 it was priced at $180,000. OK, so maybe if you itemized you could deduct the interest on the mortgage to pay for the house. The trouble was that interest rates for a loan to finance the rest of the home after downpayment was 20 percent! Your wages hadn't kept up with inflation, so how are you going to find the money for the downpayment and still make the monthly mortgage payment? Same house. Same location.
Call it what you will. The price of everything has increased a lot since the millenium began. It’s inconceivable to me that the government, the Federal Reserve’s 12 districts and corporate leaders haven’t noticed. GM’s stock is at the junk level, and Ford is facing record losses. Most major airlines are in, coming out of or going into bankruptcy because their fares barely cover the cost of fuel to get to their destinations. Sales people I know tell me consumers are scared and not making major purchases. Yet we are told that the economy is doing very well and inflation is “in check.” Whose check is what I want to know. Not mine. Yours?
How can all of these “indicators” contradict what we are personally experiencing without some conscious duplicity. Sorry, political speak. I meant to say that this is bullshit and somebody knows it.
I also am old enough to remember the current President’s father telling us that the recession is over and the economy is moving forward. His opponent, who ran his campaign on the theme, “It’s the economy, stupid!” defeated him and went on to win another term. The economy was predictably perky in the 1990s, as I personally can attest.
What changed? 9/11? Iraq? Oh no, not Iran again. Well even a political science degree doesn’t entitle me to write more than any other commentator, so I’ll just end with this. If it looks like a Bush economy, runs like a Bush economy, and talks like a Bush economy, then it probably is another Bush economy. Stupid.
I’m not an economist (thank goodness), I’m a Midwesterner with the good sense to know when I’m being lied to (most of the time). I have staffed a few campaigns, both partisan and non-partisan, have a degree in political science from University of Illinois at Springfield, and I know a good political game when I see one. I’m also old enough to remember the 1970s when inflation and interest rates were in double digits and the government blamed it on the price of oil. Well the price of oil is somewhere past the historic stratosphere and the government is telling us that inflation is moderate.
The current federal government has been accused of a lot of things in recent years, but truthful isn’t one of them. And, right now, this government cannot convince me that inflation isn’t running rampant in America.
Sure the Federal Reserve policy over the last six years has been to increase interest rates 15 out of 15 of the last meetings, supposedly to curb inflation, or was it supposed to slow down the irrational exuberance of the 1990s. I guess it depends on whom you believe and when. But I gotta tell you as one Midwesterner to another, inflation is out of control and I’m not so sure that interest rates aren’t about to take off as well.
If you remember the 1970s, the Middle East was very angry with the US over a number of issues, including support of Israel, the Shah of Iran and our general imperial attitude toward countries that produced the oil that America relied heavily upon to be, well, American. So the countries that produced oil decided to let us know who was in control and they embargoed their oil from our ports. That’s a nice word for cut us off cold. Limited supply.
What followed was an increase in the price of gasoline at the pumps and a general panic among us Americans. What also followed was a nearly vertical rise in the price of everything that traveled over ground, by air and by sea. That was called inflation and it increased our panic. Interest rates soon followed and the price of a house began to look beyond reach of all of us who didn’t have one. Same house. Same location. 300 percent increase in valuation.
Does all of this sound familiar? The only thing that’s different is the government keeps telling us that inflation is under control. How can that be when the price of everything I bought last year has gone up…a lot? The trees I bought a few years ago for $30 are $100. The meat I bought for a barbecue the same time last year has almost doubled this year. The price of a new car seems to average $30,000 and the house I bought when my son was born has tripled in assessed valuation before he enters his senior year in high school.
If I were an economist, I could explain each and every one of these things by talking about supply and demand and Mad Cow Disease, the War on Terrorism or real estate speculation, but as I said, I’m not an economist. I’m just a Midwesterner, but I’m here to tell you somebody in our government isn’t telling us the truth to us about inflation.
Maybe they call it something else now. Maybe it’s called Economic Fusion (confusion?) or the New New Economy. Regardless of the name, just like inflation, it’s killing those of us caught in the middle of it. Whatever it is we can’t afford it anymore.
I miss inflation. At least we knew what the enemy was and, unlike terrorism, felt that we had some kind of control over it. Or maybe we were lying to ourselves then too.
At the same time infflation was downsizing the buying power of our dollars, interest rates were in double digits! Back to the house example; in 1969 the house was worth $60,000; by 1979 it was priced at $180,000. OK, so maybe if you itemized you could deduct the interest on the mortgage to pay for the house. The trouble was that interest rates for a loan to finance the rest of the home after downpayment was 20 percent! Your wages hadn't kept up with inflation, so how are you going to find the money for the downpayment and still make the monthly mortgage payment? Same house. Same location.
Call it what you will. The price of everything has increased a lot since the millenium began. It’s inconceivable to me that the government, the Federal Reserve’s 12 districts and corporate leaders haven’t noticed. GM’s stock is at the junk level, and Ford is facing record losses. Most major airlines are in, coming out of or going into bankruptcy because their fares barely cover the cost of fuel to get to their destinations. Sales people I know tell me consumers are scared and not making major purchases. Yet we are told that the economy is doing very well and inflation is “in check.” Whose check is what I want to know. Not mine. Yours?
How can all of these “indicators” contradict what we are personally experiencing without some conscious duplicity. Sorry, political speak. I meant to say that this is bullshit and somebody knows it.
I also am old enough to remember the current President’s father telling us that the recession is over and the economy is moving forward. His opponent, who ran his campaign on the theme, “It’s the economy, stupid!” defeated him and went on to win another term. The economy was predictably perky in the 1990s, as I personally can attest.
What changed? 9/11? Iraq? Oh no, not Iran again. Well even a political science degree doesn’t entitle me to write more than any other commentator, so I’ll just end with this. If it looks like a Bush economy, runs like a Bush economy, and talks like a Bush economy, then it probably is another Bush economy. Stupid.
posted by Jim | 8:48 PM
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