The economic and social costs of inflation have been enormous. Inflation is a tax that erodes the income of our workers, distorts business investment decisions, and redistributes income in favor of the rich, Americans on fixed incomes, such as the elderly, are often pushed into poverty by this cruel tax.
I was listening this morning to one of the many very smart finance-podcast circuit guests and - this happens often - realized his interpretation of the things going on in the world, crucial issues like inflation, was the polar opposite of the way I see things. It was as if he was viewing the world through a prism of funhouse mirrors (or maybe I am.)
Over two years ago I heard one of those supposed giants of finance talking breezily about how great higher inflation would be, and I wrote: I don't understand how every single person calling for "more inflation" (i.e., a higher cost of living) can be so certain that that would lead to long-term higher REAL wages.
Inflation is the most regressive tax. It’s terrible for most Americans. Just ASK THEM!
But they never ask normal people. They ask highly leveraged billionaires, or asset gatherers.
I know what everyone’s wondering: What does Ben Bernanke think? (this back when official ‘core’ CPI was “2.2%”).
And then you’ve got other serial goofballs like Krugman:
Some people try to make inflation a partisan issue - it's not.
If anything, inflation - i.e., the cost of living spiking ever higher - is a class issue.
Those with assets, especially leveraged assets - should do quite well. Everyone else will not.
I think it’s been very useful for me personally, as someone who chose to dive deep into the financial rabbit hole, that I never worked on Wall Street and never was any sort of cloistered econ academic. I think it can cabbage the mind, to steal from Munger.
For this weekend’s homework, here are two Federal Reserve Bank of New York publications, both versions of "The Story of Inflation," from 1981 and 2010.
Note to Econ Majors: The pictures are already colored in.
Each of the sentences I write is trying to say the whole thing,
i.e., the same thing over and over again;
it is as though they were all simply views
of one object seen from different angles
Ludwig Wittgenstein, 𝘊𝘶𝘭𝘵𝘶𝘳𝘦 𝘢𝘯𝘥 𝘝𝘢𝘭𝘶𝘦
Just 40 days to the next Fed decision…
"'Friday I'm in Love' is a dumb pop song, but it's quite excellent actually, because it's so absurd....I could sit and write gloomy songs all day long, but I just don't see the point."
A lot more wheat (and a little chaff) later for subscribers. e.g., Deutsche Bank.
Everyone else needs to fish or cut bait.
Do you ever see/read people like Krugman’s quotes and think, this a-hole had to go to private school his whole young life…..because if he had been around real people, he would have spouted off something, and gotten the absolute hell beaten out of him, and it would have changed his life (for the better).
Gawd I’ve missed you! This is good form right here and sorry I missed the song on Friday, it sounds better on Friday.
P.s - I tell my first year college Econ classes regularly that PhD economists deserve to be made fun of until they cry