Don’t buy into the inflation scare

15 Jul, 2021 at 23:18 | Posted in Economics | 5 Comments

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  1. I think inflations are better understood to be the outcome of a political conflict over the distribution of income and risk — inflation, in other words is a way to resolve such a conflict. Inflation might be preferred to other ways to resolve the conflict, either because the alternative would be politically and socially painful or because the political coalition managing the state lacks the ability to assemble the political will.

    The idea that inflation is akin to some mysterious meterological phenomenon — a surprising storm that appears on the horizon of a sunny day for reasons no one cannot predict and everyone feels empowered to explain after the fact — is destructive of any shared, public understanding of political economy.

    I do not know that anyone should “fear” inflation, per se, though I say inflation is readily apparent in the U.S. in prices and so cannot be denied. I would say, fear the billionaire. Fear the banks. Fear Wall Street. Fear Amazon.

    The alternative resolution to the conflicts over U.S. income and wealth distribution that arise from the end of era of dis-investment and the cash flows to the top that era permitted, from the determination of the wealthiest and most powerful to pay no taxes on economic rents their political power has secured to them — the alternative resolutions are beyond the reach of any popular coalition. I predict an inflation that weaponizes the greed of the most powerful. I do not need to “predict” such, of course: voila!

  2. Why not create Fed accounts that pay inflation as interest to reward savings if inflation rises too much?


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