{"id":11118,"date":"2008-04-21T13:12:49","date_gmt":"2008-04-21T17:12:49","guid":{"rendered":"http:\/\/www.kith.org\/journals\/vardibidian\/2008\/04\/21\/11118.html"},"modified":"2018-03-13T18:48:15","modified_gmt":"2018-03-13T23:48:15","slug":"blowing-up-the-balloon","status":"publish","type":"post","link":"https:\/\/www.kith.org\/vardibidian\/2008\/04\/21\/blowing-up-the-balloon\/","title":{"rendered":"Blowing up the balloon"},"content":{"rendered":"\n

George F. Will, in What The Fed's Job Isn't<\/a>, suggests “Congress could pass a law saying: No company benefiting from a substantial federal subvention (which would now include Morgan) may pay any executive more than the highest pay of a federal civil servant ($124,010). That would dampen Wall Street's enthusiasm for measures that socialize losses while keeping profits private.” I suspect he thinks that's a joke.
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More seriously, he says that the Fed's job is purely and simply to keep inflation down. I am afraid that it might be true.
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I've been saying, for a week or so now, that I think we're in for an extended period of high inflation. If I'm right, and there's no reason to think I am, the value of the dollar (domestically) would be down by about third in five or eight years. In the short term, the race between a gallon of gas and a gallon of milk will tilt to the milk side for a while. That sort of thing.
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As long as wages keep up with that inflation, it doesn't seem so bad to me. Mr. Will is terrified that that a “ surge of inflation might mean the end of the world as we have known it.” That might be true. The world as we have known it always ends. But one of the structural problems in America is that we have a substantial amount of dollar debt: families do, businesses do, states do, the nation does. Deflating the value of that debt would be a Good Thing, if we could get away with it. Yes, it would hurt in a variety of ways, and I'm concerned that the tax crazies would go bugnuts about raising taxes 7% annually, even if the value of the taxes remained essentially constant. If we couldn't raise taxes, particularly local taxes, to cover the inflation, we could be in deep shit. But aren't we in deep shit now?
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Of course, by the end of my imagined inflationary period we will be dealing with the effects of the climate change, which I don't even pretend to predict (Asian Bird Flu saves North American Economy! Cubs win!), so there's little point in worrying about the debt issue. But then, I've never really worried about the debt issue, much.
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Except that our nation seems to be fundamentally neurotic about inflation, as if what this country really<\/I> needed was a good five-cent cigar. If wage inflation keeps pace with price inflation, the losers are the people with capital. Now, I've got nothing against capital—I've often wished I had some myself—but I've got to think that if, as Mr. Will reports, the middle-class (vaddevah dat means) debt-to-income ratio is now 141 percent, then who's voting for capital?
\n

Tolerabimus quod tolerare debemus<\/I>,
-Vardibidian.<\/p>\n\n","protected":false},"excerpt":{"rendered":"

In Which Your Humble Blogger reads George F. Will’s column in his local paper, and wants to gripe about it, but the only person here is pre-verbal.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[202],"tags":[],"class_list":["post-11118","post","type-post","status-publish","format-standard","hentry","category-news-item"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/posts\/11118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/comments?post=11118"}],"version-history":[{"count":1,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/posts\/11118\/revisions"}],"predecessor-version":[{"id":18335,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/posts\/11118\/revisions\/18335"}],"wp:attachment":[{"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/media?parent=11118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/categories?post=11118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kith.org\/vardibidian\/wp-json\/wp\/v2\/tags?post=11118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}