Gracefully surrender the things of youth: 65 cent a gallon gasoline, penny candy, and “dollar stores.”
Yes, inflation is back. And the worst part is the clueless.
You know the ones. Talking heads on the small screen with seven-figure salaries, politicians that never had to weigh whether to stop by Grocery Outlet to save $2.50 on five bags of salad mix before heading for Food-4-Less, and those who say we’re not paying enough taxes yet they have a small army of tax accountants on retainer to make sure they can access every loophole Congress created for them to zero out their personal tax burden.
None of the clueless — the people who run things that never worried about whether a trip to Applebee’s with the family in 2021 is a reckless splurge nor bat an eye at dropping a week’s pay on $395 appetizers at the French Laundry — are not a bit concerned about inflation.
Why would they be? Those worth north of $500,000 in liquid assets with more wealth coming in each week aren’t exactly counting dimes.
To even imagine that they are actually concerned about government policies that appear to be setting the stage for strong inflation as old school Economics 101 once taught would be a stretch.
The movers and shakers behind what is passing as good government these days are filled with the ranks of people who are tripping over each other to plunk down $250,000 plus to take a ride to the edge of space with rockets built by firms owned by Jeff Bezos, Elon Musk, and Richard Branson.
Rest assured they are not tripping about the possibility of $5 a gallon gasoline.
If the Era of Venture Capitalists has taught us anything it’s that today’s tech robber barons are no different than the oil and steel robber barons of the 19th century. They only become great philanthropists and humanitarians after they’ve ruthlessly destroyed competition and put legions of people out of work on their way to the top.
Inflation is a non-issue for them.
All of that helps explain why none of them batted an eye with the news that the Producer Price Index jumped a record 8.2 percent in August from the same month in 2020. The PPI is the price producers receive for the goods and services they provide. It’s the proverbial canary in the mine to forecast consumer price increases.
The impact of inflation is reflected in almost every item you see in a grocery store today compared to what you paid for it a year ago.
It is why it is laughable to hear a talking head to argue that the latest zillion dollar spending plan being battered about in DC won’t trigger inflation and then adding that “although I don’t shop in grocery stores I understand the prices of things are going up.”
Maybe if Congress and the movers and shakers that egg them along had to feed a family of four on $150 a week from the shelves of a supermarket they might have seen where their handiwork was leading the country eight months ago.
As just one example what do they think is going to happen if they dump a trillion here and a trillion there into the economy all at once to rebuild roads. If there is already a shortage of construction workers that is creating upward pressure on building prices, what do they think is going to happen if a trillion dollars is funneled to local governments to pursue major infrastructure projects at the same time?
The price of construction bids will soar because there is too much money chasing what capacity is available.
There is also an inconvenient truth about large-scale government spending plan painted with broad ideological brushes and no finite details before they are passed. The most recent example is the $13 billion the state allowed to be distributed fraudulently from the federal handout to super-size unemployment checks.
And let’s not forget the ineffective grandiose plans to keep renters with a roof over their heads and landlords whole during pandemic lockdowns. Eighteen months later most of the money has yet to be distributed setting up another gigantic pothole for the economy to potentially bottom out in.
Inflation hurts those at the bottom of the economic ladder the most. Whatever gain a $15 minimum wage may have secured will be history in a few years if they haven’t disappeared already.
None of this is to say government investment isn’t needed. The problem is no one seems to believe in moderation or delayed gratification anymore. Abandoning both disciplines simultaneously will make a trip to the supermarket more stressful than it was in the early days of the pandemic.
Perhaps by some miracle pandemic created shortages in the supply chain, an avalanche of dollars chasing too few goods, and rampant fraud made possible by government at its worse won’t merge into a gigantic economic conflagration and burn people.
If you have walked the aisles of a grocery store on a weekly basis and see what Top Ramen is now going for along with a long list of food items people rely on during thin times, you are going to view inflation as a major threat to your family and your ability to clothe, house and feed them.
Yet those with the proverbial key to the kingdom place inflation way down on their list of concerns.
Instead they are hell-bent to put even more money into the economy when there is a chronic worker shortage, container ships off shore that can’t be unloaded due to a lack of workers, and new car dealerships often selling their allotment of vehicles before they hit the lot.
Given that the Dollar Store folks might want to rebrand as the Ten Dollar Store.
In a few years that could sound inexpensive to a lot of shoppers.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Ceres Courier or 209 Multimedia Corporation.