The solution to your inflation woes!
The solution to your inflation woes!
Just "breathe through it" and remember that you're nothing but an irrational pleb.
The New York Times published some timely advice for how to deal with our endless inflation problems under the headline, “Don’t worry. Be happy!” The previous headline was “America’s Irrational Macroeconomic Freakout”, but I guess the sensitivity readers there noticed it was dripping with condescension. But don’t worry, there’s more than enough contempt left over! Let’s dig into it.
Here’s economist Justin Wolfers, professor of economics and public policy at the University of Michigan:
I, too, know that flash of resentment when grocery store prices feel like they don’t make sense. I hate the fact that a small treat now feels less like an earned indulgence and more like financial folly. And I’m concerned about my kids now that house prices look like telephone numbers.
But I breathe through it. And I remind myself of the useful perspective that my training as an economist should bring. Sometimes it helps, so I want to share it with you.
Bless your little heart, Justin! This whole time I thought inflation was a stealth tax on the poor and middle class specifically designed to be invisible and unaccountable. What a relief to know I must be wrong!
Wolfers’s advice continues:
Simple economic logic suggests that neither your well-being nor mine depends on the absolute magnitude of the numbers on a price sticker.
To see this, imagine falling asleep and waking up years later to discover that every price tag has an extra zero on it. A gumball costs $2.50 instead of a quarter; the dollar store is the $10 store; and a coffee is $50. The 10-dollar bill in your wallet is now $100; and your bank statement has transformed $800 of savings into $8,000.
Importantly, the price that matters most to you — your hourly pay rate — is also 10 times as high.
What has actually changed in this new world of inflated price tags? The world has a lot more zeros in it, but nothing has really changed.
Uh, professor? I have questions!
If everything remains equal, why did all the numbers go up? How is it even possible for every price to rise simultaneously? Wouldn’t that require a substantially larger money supply? So how is the money supply growing?
And on what planet are wages keeping up with inflation?
These important questions will never be answered in the New York Times. Instead, take a moment to understand how and why economists like Wolfers have attempted to rebrand inflation as mere “rising prices”.
Thus far, Wolfers is just doing the same-old denial of inflation that we see from most economists. But in “comforting” the average worker, Wolfers takes it a hilarious step further:
I know that when I ripped open my annual review letter and learned that I had gotten a larger raise than normal, it felt good. For a moment, I believed that my boss had really seen me and finally valued my contribution.
But then my economist brain took over, and slowly it sunk in that my raise wasn’t a reward for hard work, but rather a cost-of-living adjustment.
Translation: Every raise you’ve ever gotten had nothing to do with your work. Haha!
Incidentally, Mr. Wolfers’ raise this year was a paltry 2%, so you know he’s feeling that sticker shock at the grocery store.
I don’t envy anybody their success, but it is hilariously out of touch for somebody making $675K to deny that inflation is a problem… especially when their line of work is subsidized by the money printer.
Wolfers is so eager to dismiss inflation as a problem that he goes on to make the issue partisan:
Social media is awash with (false) claims that we’re in a “silent depression,” and those who want to make American great again are certain it was once so much better.
Translation: If you’re concerned about inflation, you’re probably just a filthy MAGAT!
The income of the average American will double approximately every 39 years. And so when my kids are my age, average income will be roughly double what it is today. Far from being fearful for my kids, I’m envious of the extraordinary riches their generation will enjoy.
So… wait a minute. Inflation changes nothing at all… but your kids will have extraordinary riches because of it? You’re not making any sense!!!
He concludes with the following:
Psychologists describe anxiety disorders as occurring when the panic you feel is out of proportion to the danger you face. By this definition, we’re in the midst of a macroeconomic anxiety attack.
And so the advice I give as an economist mirrors that I would give were I your therapist: Breathe through that anxiety, and remember that this, too, shall pass.
Translation: If there was any doubt left… you’re the problem! Breathe, you idiot! 🤣