Understanding Inflation, the ‘Mugger’

December 13, 2021 Updated: December 20, 2021

Commentary

You don’t have to be an economist in order to understand inflation.

In fact, in many ways, it helps not to be an economist to understand it.

If you’re an economist, you have a theory about inflation. Theories breed explanations. The trouble is that those explanations are just as likely to explain away what they purport to explain as they are to bring us closer to understanding them.

For proof of this, I refer you to President Joe Biden’s press secretary, Jen Psaki, who recently informed us that inflation was a good thing because it meant that more people were buying things. She actually said this.

Nor is she an outlier in the Biden administration.

A few months ago, the dominant narrative was that inflation was “transitory” and therefore no big deal.

Then Jerome Powell, chairman of the Federal Reserve, admitted in November that it was a good time to “retire” the word transitory. Inflation was here for a long-term visit, and it was likely to get worse before it got better.

You could have told him that. After all, you’ve been taking lessons in how inflation works for many months.

Just last week you had to rent a car—who knew it was so expensive—drive to the grocery store to buy that steak dinner you’ve been wanting, and pop by the local clothing boutique to buy a new winter coat. Ouch. You also had to fill up the gas tank before returning the car, of course, so you got another lesson about inflation at the pump.

In 2021, gas prices are up by roughly 50 percent, rental cars by 35 percent, steak by 25 percent, and apparel by nearly 20 percent, with November prices surging at a “record” rate.

An editorial in The Wall Street Journal this weekend got it exactly right.

“Forget transitory. Inflation is now persistent, and very high,” the editorial reads.

The column went on to remind us of the numbers that have been blaring from every media megaphone not connected to the White House press office.

“The Labor Department reported Friday that consumer prices in November rose 6.8 percent in the last 12 months, the most since 1982,” it reads.

I was told that there would be no math, but “since 1982” means we are talking about roughly 40 years.

“This should be all the warning Democratic doubters need to shelve President Biden’s Build Back Better Act that could fuel more inflation,” the unnamed editorialist wrote.

They like to keep things understated at the Journal

Still, the mention of “fuel” reminds me of the Biden administration’s war on energy. About the first thing Biden did upon coming to office was kill the Keystone pipeline. That cost tens of thousands of jobs and assured that the United States would go overnight from being energy independent to begging OPEC to pump more oil.

It also assured that Americans would be paying a lot more to run their cars and heat (or cool) their houses.

And let’s not forget Suale Omarova, the Russian-born communist-sympathizing academic whom Biden nominated to be head of the Office of the Comptroller of the Currency. Among much else, Omarova was looking forward to bankrupting major swaths of the oil, coal, and gas industries in order to “tackle climate change.”

Reality crept in, just a little bit, to Omarova’s confirmation hearings, so she had to withdraw her nomination.

But the fact that Biden could even think of nominating someone such as her—someone, that is to say, who’s both ostentatiously anti-prosperity and anti-American—tells us all we need to know about his priorities.

No, when it comes to inflation, most people agree with Ronald Reagan, not Jen Psaki.

“Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hitman,” Reagan said.

Exactly right.

Inflation not only hurts us now, but also steals from the future, from our children and grandchildren (and also our retirement).

There’s a class of politicians that doesn’t care about this. Rather, they do care, but they regard the impoverishing action of inflation as a feature, not a bug.

The poorer people are, the more dependent they are upon the government. And since that class of politicians believes that they’re the government (much as Anthony Fauci believes that he incarnates “science”), greater dependency means greater job security for them.

Their agenda is one of dependency. It makes sense, in a way, because it’s their best chance to remain in power.

More and more people are coming to understand that the Biden administration is a disaster unfolding in real-time. Where it ends, no one knows? But when it comes to wrecking the economy and pushing people into a state of dependency on the government, their policies have been a rousing success.

The graph below, which compares wage growth with inflation over the past few years, tells us all we need to know.

As commentator and businessman Andy Puzder, who shared the graph on Twitter, noted: “[The economic situation] is getting worse, not better. Good thing to show people who ask why Americans don’t feel the economy is improving. For most, it’s not.”

Epoch Times Photo

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Roger Kimball is the editor and publisher of The New Criterion and publisher of Encounter Books. His most recent book is “Who Rules? Sovereignty, Nationalism, and the Fate of Freedom in the 21st Century.”