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Inflation Week To Bring More Evidence Of Fed’s Pyrrhic Victory
It's inflation week in the US.
Inflation data week, I mean. Every week is inflation week. Because, for the nth time, prices for a lot of what American consumers buy have just experienced an acute and permanent reset.
The argument for "healthy" inflation rests on the idea that a very gradual increase in prices over time is a good thing. In nonspecific terms, you want a pace of price increases so gradual that consumers don't perceive it in real-time and, importantly, a pace that's too gradual to
The late 70s-early 80s CPI spike never reset either. What were the lasting effects from that – I can’t offhand think of any big ones, at least in the US?
Come to think of it, the inflation of that period made no special impression on me at the time, or on a small sample of others who were similarly growing into adulthood during that time. It may have left scars on people who were older then, but on young people, my feeling is it left zilch.
Which is quite different from the indelible impression left by the Depression on the generations who lived through that, or even that left by the Great Recession on its generation.
Which is a non-rigorous way of saying that if you were in early 2020 and 20% of Americans had just lost their jobs as large swaths of the economy was shutting down, you’d gladly choose the inflation spike outcome over the deep recession/depression outcome.
How about the demise of US gas guzzlers and rise in Japanese compacts/subcompacts, as well as the final nails in the coffin for a lot of basic American industrial companies unable to compete against 300 yen to the dollar?