The Problem With Inflation

Source: Dispatches from Heck
by Frank Clarke

“Inflation in one form or another has always been with us. Even during the 18th and 19th centuries, there was some inflation. Inflation, however, really ‘got its legs’ beginning in the 20th century. Two events gave it the boost it needed to become a household fixture: the creation of the Federal Reserve Bank, and the 16th Amendment (Income Tax). … We are told by our politicians that this inflation is transitory, meaning it will subside within the planning future. (Janet Yellen is lately ‘walking back’ that pronouncement.) Even if it is, there’s still a serious problem left unaddressed. The real problem is this: once inflation subsides, prices will still be high. Just because runaway inflation becomes less runaway, prices don’t go down. They stay at the elevated state the last runaway inflation left them at. Things are still unaffordable; they’re just not becoming more unaffordable.” (06/10/22)