NO INFLATION? WHO ARE THEY KIDDING?
From Alan Greenspan to Milton Friedman to every so-called expert in the country, inflation is not happening. In fact, to spur the development of such an event we have the Federal Reserve raising interest rates on a quarterly basis. This, Mr. Greenspan assures us, will ward off inflationary tendencies. It appears, however, to just about anyone with a pocketbook (and the need to buy necessities), that the dreaded ogre of rising prices is with us, has been with us for some time, and is plodding along without regard to the Fed's presumed defense mechanisms.
Let us examine reality; the kind of real world experiences most of us have almost daily. Begin with housing prices. Can anyone honestly suggest that a sizeable percentage of the American populace have not been shut out of the American dream? Sure, with a myriad of creative mortgage programs home ownership is still within reach of some members of the so-called middle class. But most of those who jump in where others fear to tread discover, sooner or later, that their dream might be a nightmare in disguise. And with housing prices, and their concurrent month to month costs, rising precipitously, it is no secret that a frightening number of home owners (with mortage bankers as their managing partners) are in well over their heads. Values may be rising, but the accompanying debt is escalating even faster.
But housing costs are only one of the more visible symptoms of the inflationary spiral. And at least a few folks (those willing to sell in favor of even more expensive digs) can sometimes manage a momentary profit.
Other, even more irritating price escalations, are regularly evident to everyone with a car, a need to buy groceries, clothing, heat, air conditioning, restaurant meals, an occasional movie, or--heaven forfend--a clandestine candy bar. And if you have a credit card, and use it for anything more than the occasional purchase of something cheap, heaven help you.
In the past year gas prices have risen to levels which, for many of us, are prohibitive. The government assures us that current prices, when adjusted for inflation, remain lower than they were in 1973. Swell, but in 1973 we were paying roughly a buck a gallon. Today we are paying circa three bucks a gallon. And that means that if the government is correct, we are all earning three times more now than we were then. No doubt some of us are. But it is also true that many of us are not. People do not gripe about the cost of a commodity when it is within reason. Today's gas prices (the government's stance be damned) are not reasonable. More importantly, the oil conglomerates are making unprecented profits; upwards of thirty-five billion dollars a quarter. But that, according to conservative economists (and our current administration) is a sacred cow. They need those profits, we are told, to enable them to develop alternative fuels, to continue the search for more fossil fuels, and to reward their stockholders. Baloney, scotch the first two incentives and place the greatest emphasis on the last one. The answer is probably to buy oil stocks. But, like the price of their products, their share prices are out of reach for all but the well healed. The real answer, of course, is for Uncle Sam to apply the brakes to these robber barons. But that is not going to happen. And, sadly, a sizeable percentage of those most affected by this kind of inflation would argue, ignorantly, against controls. It is not unlike the country's most vehement opponents of collective bargaining. All too often those who rant the most are among the ones who would most benefit from being union members. It is a peculiar irony; the result of the kind of corporate propaganda which is so ingenious in its construction as to convince a naieve work force that the sun comes up in the west.
If you have been to a grocery store lately, and if you monitor the prices of the items you regularly purchase, you know that inflation is no joke. Meat prices, for instance, are absurdly inflated. A cut-up chicken for ten bucks? How is that possible? There are so many chickens in this country they cannot be counted. Or how about five bucks a pound for pork chops? Pork is the second most plentiful meat avalilable, but when you add in the lengthy list of contributors to its price at the meat counter it is not difficult to see how it has gotten gourmet expensive.
Less than ten years ago a five ounce can of Tomato paste sold for circa fourty-seven cents. Today, that same can garners an output of sixty-nine cents. Inflation? Of course!
A sugar laden bubble gum ball used to go for a nickel (as recently as ten years ago). Today it takes a quarter to wrestle that ball from its machine. Why? Why not?
A year ago a month of winter heat (natural gas) cost about sixty percent less than it is going to cost this winter. And those who air condition their homes with electricity are paying more than 100% more than was the case just two short summers ago. How can this not be called inflation?
Two years ago the price of a movie in the local multiplex went for about seven bucks. Now the price of a ducat is getting perilously close to ten dollars; and no end is in sight. (And Hollywood is making some of the worst films of all time.) And Lord help anyone who supplements their movie ticket with a coke or a box of popcorn. For a family of four a night at the movies can easily cost more than fifty bucks. And theater owners are wondering why attendance is down. Surely they jest...............
It was back in the sixties when a couple of clever banks invented the all-purpose credit cards we now know as Visa and MasterCard. Several travel and entertainment cards (American Express, Diner's Club and Carte Blanche) were already extant at that time but they were the more or less exclusive providence of the wealthy; and they had to be paid-off every month. But with the advent of Visa and MasterCard, just about everyone, and anyone, could get a card (or a fistful of them), credit limits well beyond their means, and instant access to the "good life". And back in those days interest rates were manageable. In fact, usury laws (which have since been expunged--except for mortgages) kept things sufficiently in balance as to preempt the spiral of debt which is now all too thoroughly ingrained in the domestic landscape. Indeed, a conspiracy of greed (the banks, and ours) have produced a situation, today, which legally enables financial institutions (both respected and otherwise) to assume the role once relegated to old time shysters. Who could have imagined a time when the issuers of credit cards could, with a straight face, charge upwards of 30% per year for their allocation of what were originally perceived as short term loans? And now, what with record delinquencies and over crowded bankruptcy courts, the banking industry, and issuers of retail credit cards, have convinced Congress to essentially wipe out bankruptcy as an alternative to confiscatory interest rates and the spiraling debt it causes. Inflation? What else? And this may be the most egregious of all the inflationary forms mentioned thus far. And how does the government help us? It conspires with the progenitors of our credit ladened economy to make it even more difficult for consumers to bridge the gap. Yes, credit is an optional aspect of life in America. Presumably, no one has to have a credit card, and no one who has one has to plunge in to debt. But, for most people, the matter is just not that simple. We are wooed, lured, and enticed, twenty four seven with non-stop invitations to spend our money. And much of what we are cajoled in to buying is available, to the masses, only with credit. And the notion of just saying no is realistically credible only to the extent that one's will power is more powerful than the incessant media messages. Keeping up with the Jones's, afterall, is an American tradition. And only the strongest among us can resist the clarion call to buy, buy, and buy more. And the credit purveyors know that better than anyone. What is more, they count on it with absolute certainty. And to cover their already well padded backsides they hike their charges, with not so much as the hint of an apology, to levels which insulate them from everything but customer bankruptcy. And now even that eventuality is covered. Can the reinvention of debtor's prison be on the horizon?
Inflation is not an ephemeral concept easily buffeted by quarterly raises in the prime interest rate. It is day to day fact of life and we are doing virtually nothing to prevent it. And the "we" referred to is the government. And lest we forget (or get hoodwinked in to thinking otherwise) "we" are the government. And "we" have a lot of work to do. And that work should not be the continual shrouding of the legitimate issues of the day. When oil companies profit to the exclusion of any concern for their customers (us), they should be reined in. When the cost of credit parallels the cost of doing business with the mob its purveyors should be regulated. And when a twenty-five cent candy bar starts costing a dollar someone should wake up and smell the chocolate. No inflation? Who are they kidding?
10/12/2005
Let us examine reality; the kind of real world experiences most of us have almost daily. Begin with housing prices. Can anyone honestly suggest that a sizeable percentage of the American populace have not been shut out of the American dream? Sure, with a myriad of creative mortgage programs home ownership is still within reach of some members of the so-called middle class. But most of those who jump in where others fear to tread discover, sooner or later, that their dream might be a nightmare in disguise. And with housing prices, and their concurrent month to month costs, rising precipitously, it is no secret that a frightening number of home owners (with mortage bankers as their managing partners) are in well over their heads. Values may be rising, but the accompanying debt is escalating even faster.
But housing costs are only one of the more visible symptoms of the inflationary spiral. And at least a few folks (those willing to sell in favor of even more expensive digs) can sometimes manage a momentary profit.
Other, even more irritating price escalations, are regularly evident to everyone with a car, a need to buy groceries, clothing, heat, air conditioning, restaurant meals, an occasional movie, or--heaven forfend--a clandestine candy bar. And if you have a credit card, and use it for anything more than the occasional purchase of something cheap, heaven help you.
In the past year gas prices have risen to levels which, for many of us, are prohibitive. The government assures us that current prices, when adjusted for inflation, remain lower than they were in 1973. Swell, but in 1973 we were paying roughly a buck a gallon. Today we are paying circa three bucks a gallon. And that means that if the government is correct, we are all earning three times more now than we were then. No doubt some of us are. But it is also true that many of us are not. People do not gripe about the cost of a commodity when it is within reason. Today's gas prices (the government's stance be damned) are not reasonable. More importantly, the oil conglomerates are making unprecented profits; upwards of thirty-five billion dollars a quarter. But that, according to conservative economists (and our current administration) is a sacred cow. They need those profits, we are told, to enable them to develop alternative fuels, to continue the search for more fossil fuels, and to reward their stockholders. Baloney, scotch the first two incentives and place the greatest emphasis on the last one. The answer is probably to buy oil stocks. But, like the price of their products, their share prices are out of reach for all but the well healed. The real answer, of course, is for Uncle Sam to apply the brakes to these robber barons. But that is not going to happen. And, sadly, a sizeable percentage of those most affected by this kind of inflation would argue, ignorantly, against controls. It is not unlike the country's most vehement opponents of collective bargaining. All too often those who rant the most are among the ones who would most benefit from being union members. It is a peculiar irony; the result of the kind of corporate propaganda which is so ingenious in its construction as to convince a naieve work force that the sun comes up in the west.
If you have been to a grocery store lately, and if you monitor the prices of the items you regularly purchase, you know that inflation is no joke. Meat prices, for instance, are absurdly inflated. A cut-up chicken for ten bucks? How is that possible? There are so many chickens in this country they cannot be counted. Or how about five bucks a pound for pork chops? Pork is the second most plentiful meat avalilable, but when you add in the lengthy list of contributors to its price at the meat counter it is not difficult to see how it has gotten gourmet expensive.
Less than ten years ago a five ounce can of Tomato paste sold for circa fourty-seven cents. Today, that same can garners an output of sixty-nine cents. Inflation? Of course!
A sugar laden bubble gum ball used to go for a nickel (as recently as ten years ago). Today it takes a quarter to wrestle that ball from its machine. Why? Why not?
A year ago a month of winter heat (natural gas) cost about sixty percent less than it is going to cost this winter. And those who air condition their homes with electricity are paying more than 100% more than was the case just two short summers ago. How can this not be called inflation?
Two years ago the price of a movie in the local multiplex went for about seven bucks. Now the price of a ducat is getting perilously close to ten dollars; and no end is in sight. (And Hollywood is making some of the worst films of all time.) And Lord help anyone who supplements their movie ticket with a coke or a box of popcorn. For a family of four a night at the movies can easily cost more than fifty bucks. And theater owners are wondering why attendance is down. Surely they jest...............
It was back in the sixties when a couple of clever banks invented the all-purpose credit cards we now know as Visa and MasterCard. Several travel and entertainment cards (American Express, Diner's Club and Carte Blanche) were already extant at that time but they were the more or less exclusive providence of the wealthy; and they had to be paid-off every month. But with the advent of Visa and MasterCard, just about everyone, and anyone, could get a card (or a fistful of them), credit limits well beyond their means, and instant access to the "good life". And back in those days interest rates were manageable. In fact, usury laws (which have since been expunged--except for mortgages) kept things sufficiently in balance as to preempt the spiral of debt which is now all too thoroughly ingrained in the domestic landscape. Indeed, a conspiracy of greed (the banks, and ours) have produced a situation, today, which legally enables financial institutions (both respected and otherwise) to assume the role once relegated to old time shysters. Who could have imagined a time when the issuers of credit cards could, with a straight face, charge upwards of 30% per year for their allocation of what were originally perceived as short term loans? And now, what with record delinquencies and over crowded bankruptcy courts, the banking industry, and issuers of retail credit cards, have convinced Congress to essentially wipe out bankruptcy as an alternative to confiscatory interest rates and the spiraling debt it causes. Inflation? What else? And this may be the most egregious of all the inflationary forms mentioned thus far. And how does the government help us? It conspires with the progenitors of our credit ladened economy to make it even more difficult for consumers to bridge the gap. Yes, credit is an optional aspect of life in America. Presumably, no one has to have a credit card, and no one who has one has to plunge in to debt. But, for most people, the matter is just not that simple. We are wooed, lured, and enticed, twenty four seven with non-stop invitations to spend our money. And much of what we are cajoled in to buying is available, to the masses, only with credit. And the notion of just saying no is realistically credible only to the extent that one's will power is more powerful than the incessant media messages. Keeping up with the Jones's, afterall, is an American tradition. And only the strongest among us can resist the clarion call to buy, buy, and buy more. And the credit purveyors know that better than anyone. What is more, they count on it with absolute certainty. And to cover their already well padded backsides they hike their charges, with not so much as the hint of an apology, to levels which insulate them from everything but customer bankruptcy. And now even that eventuality is covered. Can the reinvention of debtor's prison be on the horizon?
Inflation is not an ephemeral concept easily buffeted by quarterly raises in the prime interest rate. It is day to day fact of life and we are doing virtually nothing to prevent it. And the "we" referred to is the government. And lest we forget (or get hoodwinked in to thinking otherwise) "we" are the government. And "we" have a lot of work to do. And that work should not be the continual shrouding of the legitimate issues of the day. When oil companies profit to the exclusion of any concern for their customers (us), they should be reined in. When the cost of credit parallels the cost of doing business with the mob its purveyors should be regulated. And when a twenty-five cent candy bar starts costing a dollar someone should wake up and smell the chocolate. No inflation? Who are they kidding?
10/12/2005
posted by Garrett W at 12:08 PM
0 Comments:
Post a Comment
<< Home