Prices Prices Prices
Easing Sticker Shock for Cash-Strapped Consumers
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  • Pete

    Inflation is always a monetary phenomenon.

    • No it’s not. MV = PY. Money (M) is only one term in that equation.

      • Pete

        Well I guess Milton Friedman was wrong then.


        • Yeah. He was wrong about that.

  • Andrew Allison

    Especially food! The increase in food prices, conveniently ignored by the government far outpaces those in healthcare, education, etc. A simple first step would be to abolish the ethanol boondoggle, thereby freeing up 40% of the US corn crop for a useful purpose. The price of gasoline might be similarly affected by approving Keystone XI instead of increasing it by imposing additional costs on rail transportation of oil. The failure of Congress and the Administration to act on these, and other, no-brainers is scandalous.

  • FriendlyGoat

    The Fed indeed is causing inflation—–in the stock market.

  • Breif2

    “Some on the right have fired back, taking issue with the suggestion, at least implicit in Davis’ work, that the loose monetary policy of the Federal Reserve is contributing to price inflation.”

    ??? I haven’t followed the latest discussion, but many on the “right” have been very loudly banging the drum against loose monetary policy for this very reason.

    “We don’t need to support rising prices through student loans, or insurance subsidies, or cash transfers. We need to think about what is causing inflation and what, if anything, we can do to reverse it.”

    “Support” is indeed the mot juste. If Volcker were dead, he’d be spinning in his grave.

    • Andrew Allison

      “We need to think about what is causing inflation and what, if anything, we can do to reverse it.” Duh! The cause and solution are well-understood. What’s missing it the acknowledgement on the part of the government that significant inflation is, in fact, occurring.

    • Bruce

      Yeah, they got that wrong. The right generally is supportive of sounder money. At least they say they are, but they still spend as much as the left when they have all 3 branches of government. So let’s say that rhetorically, the right supports sound money and is doing more complaining about Fed printing than the left.

  • Boritz

    “…for the average middle- or lower-class American, grocery bills are growing faster than their wages.”

    If the trend continues millions more will qualify for subsidies (food stamps) just as millions qualify for health insurance subsidies, and there is no legal challenge to the food subsidies.

  • Anthony

    “The consumer Price Index, including food and energy, has risen by an annual average of just 1.6 percent since 2008, below the Fed’s 2 percent inflation target. During the Great Inflation of the 1970s and early 1980s by contrast, prices rose five time faster” (for additional context see James Pethokoukis: The Weird Obsession that’s Ruining the GOP).

    • SisyphusRolls

      CPI hasn’t risen much since 2008 because its biggest components, wages and housing, are stagnant or down from 2008. But everyday purchase categories like food and gas are way up, and some consumer categories are up by moderate amounts. Some would argue financial assets are also inflated significantly.

      Inflation need not occur across all parts of the market at once to have an effect on people. Indeed, when wages are not subject to inflation, the relative price changes against income for most people make the inflation that is occurring more of a problem.

      • Anthony

        I don’t think Pethokoukis is arguing against an “effect on people” but what does data say.

  • Jacksonian_Libertarian

    There is no inflation, there is only a supply shortage, being caused by the Alcohol into Gasoline Boondoggle. This stupid program is at the heart of every bit of consumer inflation. And it is all in support of the Greatest Hoax in history “Global Warming”.

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