Economist Milton Friedman famously called inflation both a “hidden tax” and “taxation without representation.”
The polite 50-something woman stunned by the jump in price of a package of meat she was about to place in her cart Saturday at Food-4-Less sees inflation in a somewhat different light.
As I passed by she uttered to herself out loud, “This is ridiculous.”
Although we have been repeatedly told by politicians and the appointed bureaucratic hacks that do their bidding that congregate along the Potomac River it’s not a big deal as they promise it will end soon, inflation is a serious threat.
The price of goods has gone up 6.2 percent in the past 12 months. That’s the highest it’s been since 1990.
We are told this is not a repeat of previous inflationary periods including 1981 when mortgage rates reached 18 percent.
They’re right because this one has government gone wild written all over it.
It is being fueled by carpet bombing the economy during the first 18 months of the pandemic with never-ending cash.
The intent was to keep people from going under due to the government’s decision to resort to full scale lockdowns. We can debate all we want about whether the lockdowns and the pumping up of the safety net were both necessary.
But what is not open to debate is the fact there was no honest-to-goodness litmus test for need. Nor is it debatable the federal response put local and state governments awash in money that far exceeded the actual costs of the pandemic response. They also put $1,200 into the hands of a lot of people who didn’t need it to survive. And that doesn’t mention with what happened so fast that in California alone there was $20 billion in fraud from just one aspect of the assistance — pumped up unemployment.
A lot of cash was put into circulation.
And that is what the government wanted. They didn’t stop at basics to help those truly struggling. Instead they encouraged those not suffering financial setbacks due to the pandemic to spend, spend, and spend.
Now that there are additional inflationary pressures from supply chain issues some of the same politicians are admonishing people for spending too much.
Toss in mandated economic shutdowns along with trucking work rules — including basically making independent truckers in California an endangered species — that didn’t exist in 1990 when we dealt with inflation this high and it is easy to see there is going to be a gargantuan price to pay.
And those paying the bill will be the little guys, you and me, and not those who spend what is an entire month’s food budget for a typical Central Valley family on appetizers at the French Laundry Restaurant in Napa Valley.
There is also mounting anecdotal evidence that government efforts to try and unclog the ports are creating other issues that go beyond trying to get goods into the clutches of consumers in time for Christmas.
As more trucks get diverted, the movement of goods produced in country is suffering as well.
A shipment of newsprint needed to publish the Manteca Bulletin, Turlock Journal, Ceres Courier, Escalon Times, Riverbank News, Oakdale Leader, Westside Index, Gustine Press-Standard and a dozen or so other weekly newspapers and periodicals 209 Multimedia prints for clients from Mariposa to Gridley is two weeks overdue.
It is sitting in a warehouse in Seattle. The newsprint company is unable to get trucks to transport their orders. That has led to getting a little bit too close to the bottom of the barrel.
This is not a one-time thing. There are four newsprint orders behind that waiting to be filled. Rest assured it is hitting newspapers throughout the West Coast.
The timing happens to coincide with brokered efforts by the federal government to play catch up at ports.
What is happening with newsprint is not anything unique.
And while contracts may lock in prices for a while, what you are seeing on grocery shelves and elsewhere is the result of federal fiscal policy teaming up with federal mandates to do a PacMan act on your paycheck.
It is made worse by landlords crippled by essentially having their property taken from them for close to 18 months by those who stopped paying rent on the belief the bureaucracy that’s the descendant of the one in place that helped the United States win World War II would be able to execute a rent relief program.
Those landlords who have mortgages and bills to pay are now forced to play catch-up by jacking up rents when they get units emptied of those who haven’t paid them for more than a year.
Add up government mandates, government largeness beyond those that truly needed assistance, government inefficiencies plus government incompetence, and toss in a push to launch more initiatives to expand government on a scale that makes the Great Society undertaking seem like Scrooge before his epiphany was president and not Lyndon B. Johnson, and you have one wallet busting bill for Americans to pick up.
Keep it in mind, according to government economic wonks, we will be spending $172 more this winter to heat our homes, 22 percent more for turkey on Thanksgiving, and manufacturers will do the “Cheez-It” trick with many of the items we buy.
What is the Cheez-It trick? In short it is 45 snack bags of the baked crackers sold by the box at places like Costco as well as Smart & Final.
Not only did they increase the cost by over a $1 but they reduced the content in each individual bag by almost 10 percent.
In previous inflationary times you saw manufacturers do one of the other but not both.
A snow blower company is doing the same thing but in a somewhat different manner. They can’t get digital chips to control them so they’ve switched back to old school tech by using joy sticks and upped the price of each unit. They still work but they aren’t as easy to run. So basically you’re paying more to get less.
That’s what inflation is all about.
And if you doubt the bell tolls for you, listen to the dinging noise on the gas pump the next time you fill up.
The closer it gets to $5 a gallon, the more frantic the sound becomes.
Gas pumps are sounding the alarm. Politicians doling out money can’t hear it because the whirl of the printing press at the Bureau of Printing & Engraving is making so much noise today it sounds like a Category 4 hurricane gearing up to rip apart the economy.