Why We Should Stop Freaking Out About Inflation
For the first time in decades, we are in the midst of a bona-fide inflation scare. Recent numbers came in at 6.2%, the highest since 1990. With government spending in the trillions and economic activity surging as the pandemic wanes, much of the world is beset by high demand for goods that have created massive supply-chain bottlenecks, with not enough ships and capacity at ports leading to long delays and higher prices for almost everything from.
The $64,000 question (or perhaps now the $128,000 question) is whether this is a dramatic and dangerous new normal or simply a hiccup as the world emerges from 18 months of the COVID-19 economy. No one knows, of course, what the future truly holds, even as that doesn’t stop many from proclaiming with certainty. But as we weigh the answers, a few things should guide us: not much has changed structurally in the global economic system in the past few months; our economic numbers are based (as they always are) on changes over the last twelve months, and last year was epically problematic with much of the world in lockdown; and finally, the scars of the ravages of inflation in the 20th-century has never fully healed.
Today’s sense-memory of inflation is connected to the rise of fascism and World War II in the 1930s and 1940s, and then the roiling disorders of the world in the 1970s. The result is that any hint of inflation triggers the equivalent of PTSD in the ranks of central banks, economists, policymakers and millions of middle-class wage earners.
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The line between anomalous and a new normal is always fuzzy, but it is striking that the same people who balked at the idea that inflation might be a thing of the past when there was no evidence of it between 2000 and 2020 are willing to sound the alarm of inflation after just a few months of high readings in 2021. Little or no inflation over the past twenty years was viewed by most economists and central banks as a conundrum. Even in the absence of any evidence, they were quick to warn that somewhere, inflation was lurking nonetheless. The Fed and every major central bank has as their primary charter “price stability” which is banker-speak for keeping inflation in check. Inflation may have been nowhere evident for years, but that didn’t stop multiple institutions looking for it.
https://www.msn.com/en-us/money/markets/why-we-should-stop-freaking-out-about-inflation/ar-AAR2pI3
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and don't mention that SS will get a huge raise this year. That "raise" will not even begin to cover the additional cost of food, much less utilities.