ghost of inflation present
One thing that Robert Reich likes to underscore is that inflation is not a major problem in the US so long wages are stagnating. Real wages (adjusted for inflation) are falling, but he points out that this is a problem with wage growth, not with inflation.
Inflation, he claims, has been largely tamed by a service based economy in which consumers have all the pricing leverage over producers. Inability of producers to pass along to consumers the price increases caused by commodity price inflation is truly remarkable. Consumer demand can literally drive producers out of business.
The point here is that eternal quest for low prices can be too much of a good thing if it forces contraction of the would-be engines of growth.
Reich also points out that this is a relatively new phenomenon: the ghost of inflation past is not the ghost of inflation present.
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