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Bread costs more, now, and so does milk and meat. Gasoline is a bit higher; a chain reaction has started, and now everything is higher-priced. What isn’t getting more “dear” probably will be soon.
Why? Well, part of it goes with rising petroleum prices. In particular, gasoline has gone up, and that often has an immediate impact on grocery staples such as grain products. After all, farming is gasoline-intensive—and your supermarket could only absorb so much on its own before it had to pass some of those increased prices on to you. Recession or no recession.
Remember the 1970s, when grim cartoons in the newspapers remarked on how people were getting by with as little meat and chicken as they could? I’m not talking about the vegetarian retro-hippies; I’m talking about working moms with growing kids who needed protein and still didn’t have a lot of time to plan clever meatless meals.
Do you remember the little old ladies who would take all the cans off the shelf to see if some of the ones in back hadn’t been given new price tags yet? (That was before UPC scanners; we can’t do that these days.) After all, many seniors are on fixed incomes—inflation hurts such people a lot.
How did we get here? Doug Brady at Americans 4 Palin explains:
“They (whoever "they" are ) say history repeats itself and, given the latest news that the Fed plans to buy another $600 billion to perhaps as much as $1 trillion in government securities, they may be right.... With this decision to expand the money supply by up to another $1 trillion, Ben Bernanke seems to be channeling his inner Arthur Burns. Arthur Burns was Fed chairman from 1970 to 1978 and his accommodative monetary policy is generally believed to have been at least partially responsible . . . for the rampant inflation that characterized that decade. Burns, a Keynesian, subscribed to the view that the Fed should pump up the money supply in order to provide cover for the bad fiscal policy which emanated from the Nixon, Ford, and Carter Adminstrations during his chairmanship.”
Perhaps the outrageous costumes of the 1970s were a frantic effort to avoid thinking about just how bad things really were getting outside that discotheque: "The results were disastrous: the consequent high inflation and interest rates coupled with little or no economic growth and high unemployment resulted in essentially a lost decade. Economist Robert Barro coined the term "misery index" (the inflation rate plus the unemployment rate) to describe the pain Americans were feeling.
Under Keynesian theory, simultaneously high unemployment and inflation was not supposed to happen. High inflation should only occur during periods of rapid economic growth and the resulting tight labor market. And yet in the 1970s unprecedented inflation accompanied a slow economy and high rate unemployment rate. This combination of a stagnant economy and inflation is known as "stagflation", and is the one word that best describes economic conditions during the 1970s.”
And now Bernanke is intend on following Burns’s lead.
Governor Palin herself has mentioned inflation in a recent speech, and the lesson of the 1970s is a grim one: inflation and high unemployment can go hand in hand. And that’s scary stuff, given how many people are out of work these days, and that a lot of people have already made deep cuts to their budgets in response to the off-kilter job market. The Wall Street Journal has documented the trend. It’s real.
What can we do? Well, there is the personal response, which is obvious: go deeper into that list of sacrifices you can make, take a deep breath, and . . . begin.
Get out the Crock Pot, and start making your own bread.
Buy in bulk when you can, and cook more from scratch.
Use your car less, if possible.
Mend clothes to see if they can last just one more season.
Haunt the “Free” sections of Craigslist and have your bicycle and little red wagon oiled up and ready to roll. As you can tell, it’s not going to be “Fiesta Time” in your house for awhile.
Groceries and gasoline are just the beginning of this inflationary trend: the weakening of the dollar means that imports will soon follow. So electronics, home décor, clothes, and inexpensive furniture are likely to go up in price. Buy the imported goods you’ll need over the next 1-3 years as soon as you can.
Including your rice steamer, your pressure cooker, your bread machine, and maybe an economic vehicle.
Talk to your great-grandparents about how they got through the Depression. Figure out how to eat less meat before the economy does it for you. Save as much as you can to get through the next two years. Stock up a little on dry goods and canned food before your dollar tomorrow buys less than it will today. You might put ammunition on your list as well: after all, hunting will become more important in rural areas, and moments of civil disorder—during power outages and natural disasters, at the very least—will become more frequent in the urban centers.
The political response is less obvious, since this country is in a sticky wicket: we simultaneously need the stimulative effects of low taxes and the anti-inflationary effects of a lower deficit.
What this means is that when benefits we like--and social services, and the salaries of the teachers and firefighters we love--are cut, we need to be understanding: our public servants are in a no-win position right now. We probably can’t expect either a perfect record on public debt or a perfect record on tax-cutting: both of these things need to happen. What we can agree on, and push for, is a continual streamlining of government and a decrease in regulations and red tape.
We can increase our commitment to the private charities in our communties that serve those who are most in need, as the ranks of the very poor increase. Those of us who are hanging on to our homes need to help those who are hanging on to a room in a weekly motel or a cheap downtown hostel.
Take canned food to your church or temple, volunteer in a soup kitchen, and make sure that you contribute to the collection at your church or community group that focuses on helping the needy—after all, every little bit helps.
Private charity by groups and individuals has to continue, and even increase, in these difficult times. Those who don’t subscribe to a particular religious faith may want to partner with those who do: sometimes the charitable infrastructure is better at a religious organization than a secular one. But double-check on their reputations. Focus on finding an effective outreach, rather than one that shares your personal views—particularly if you’re an atheist or agnostic, or from a small-minority faith (e.g., Buddhist, Wiccan).
Above all, support those in Congress who are trying to slash the waste in the Federal government. Encourage those in your state assembly to do the same.
We’re living in dangerous times, and we need to step up. Together.
