The Year of Inflation Infamy
I will always associate inflation with the taste of Hamburger Helper.
In the summer of 1973 I shared an apartment with several other college students; we didn’t have much money, and the cost of living was soaring. By 1974 the overall inflation rate would hit 12 percent, and some goods had already seen big price increases. Ground beef, in particular, was 49 percent more expensive in August 1973 than it had been two years earlier. So we tried to stretch it.
Beyond the dismay I felt about being unable to afford unadulterated burgers was the anxiety, the sense that things were out of control. Even though the incomes of most people were rising faster than inflation, Americans were unnerved by the way a dollar seemed to buy less with each passing week. That feeling may be one reason many Americans now seem so downbeat about a booming economy.
The inflation surge of the 1970s was the fourth time after World War II that inflation had topped 5 percent at an annual rate. There would be smaller surges in 1991 and 2008, and a surge that fell just short of 5 percent in 2010-11.
Now we’re experiencing another episode, the highest inflation in almost 40 years. The Consumer Price Index in November was 6.8 percent higher than it had been a year earlier. Much of this rise was due to huge price increases in a few sectors: Gasoline prices were up 58 percent, used cars and hotel rooms up 31 percent and 26 percent respectively and, yes, meat prices up 16 percent. But some (though not all) analysts believe that inflation is starting to spread more widely through the economy.
https://www.nytimes.com/2021/12/16/opinion/inflation-economy-2021.html
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I moved. 10% unemployment.
About 10% inflation.
Nobody wanted to hire me. Worse, where I moved to was hammered hard by the spotted owl. Half the town was suffering mightily, half the town felt mighty in inflicting virtuous suffering (on others, the inferior hoi polloi, of course).
And while I had $3k in savings from 1977, thanks to my father, my incredible wealth declined in value by 10% per year. After 4 years, it was worth less than $2000 (in 1981 dollars). The month I got a job I was looking at rent versus food. And hoping I didn't get sick or needed new socks, because then it would be rent versus food versus socks. (Not the first time my privileged self has been there.)
Krugman lets this information leak out by minimizing it. He was hurting hard in '73. With less unemployment and lower inflation. "fourth time after WWII that inflation had topped 5 percent", smaller surges in 1991 and 2008. And much, *much* larger surges in inflation in '74-82.
He picks 1973, and yet obliquely refers to his obfuscation in "highest inflation in almost 40 years." Meaning 2021 - "39 or so" meaning "since 1981."
I knew college students (by which I mean "classmates"
who were really hurting in the early '80s. One lived in the attic--generous term there, I was in her place more than once and couldn't stand up, I'd term it a "crawl space" above Klondike Kate's.)
Between parents' estate and my school-teacher pension and SS I might have been able to retire at 66 and had an income above by a few percentage of poverty level, but planned for that--paying off debt, keeping things in repair good enough that I'd die first (most likely). Now I've lost a big chunk of my pension and inheritance (hung up in never-ending probate, thanks courts and Arizona).
If I retire before age 69 it would be at the poverty level. And honestly, if I have one more student who reads "H20 and NaOH, each with mass 2.0 g" and asks, "but there's only *one* mass, what's the other?" I may just walk and do as my mother said, "Go outside and play in traffic."
I've read articles saying that inflation really just hurts the wealthy.
And feel folded, spindled, and mutilated but such talk. (See, I really am in my 60s. Most under 50 would have no idea what "spindled" means, or that this is a set phrase. Hell, most in their 60s don't. You/d impale an incoming bill or order on one to keep it separate from the other desk trash.
)