You might be able to live without chicken wings. If a summer cookout tilts more toward lower-cost hamburgers than high-end steak, then life goes on.
What about a 50% increase in the cost of a commute to work? What if the cost of rent, groceries and medical care eats into wages that fail to keep pace?
Inflation is sometimes referred to as the “cruelest tax,” because it disproportionately affects lower-wage earners and those on fixed incomes.
Americans haven’t worried about inflation since Ronald Reagan was president. Stocked store shelves were viewed as a birthright for those living in our consumer paradise.
Maybe it started with the bizarre shortage of toilet paper during the early days of the COVID-19 pandemic, but more recent shortages have been reported in everything from the computer chips needed for vehicle manufacturing to chicken wings at your local restaurants.
In most instances, shortages lead to price increases. Gasoline, also in short supply in some locations, is the most visible example of inflation because everyone sees the signs. But rising prices can be found in lumber, food and used cars.
Some of it is the pandemic. These are extraordinary times, with the shock of emergence from stay-at-home orders compared to the impact of soldiers returning from war. Pent-up demand drives up prices.
Some can be attributed to extraordinary events, like weather that impacts commodity prices or the container ship the got wedged in the Suez Canal.
All of this is true, but it would be a mistake to assume that policymakers don’t have levers for restraining prices. A subtle change in Federal Reserve policy, from a goal of 2% inflation to inflation “moderately above 2% for some time,” seems to portend a more lenient monetary policy.
Then there’s the fiscal impact of multiple stimulus payments to Americans. This is money that no one complains about when it shows up in the bank account, but it also results in demand that exceeds supply.
All of this means you can take your pick between blaming central bankers, President Biden or shortsighted corporations, but what if it’s all of them?
It would be a mistake to not think otherwise, because this is a problem that affects the most vulnerable Americans the most.
Copyright St. Joseph News-Press. Reprinted with permission.