Angry Bear: I have been bugging Daniel to write on occasion for Angry Bear. Daniel did write occasionally and his commentaries were good. I know it is a burden. Well, here is one of Daniel’s comments. A good one as usual . . .
I believe the interest costs are part of the story as to the perception of inflation. Within that, so what if wages kept pace with rising costs (excluding interest), all it means is the person stayed even while hearing how good things are? If things are good, then why do I still have nothing left over? That’s I believe is part of the perception.
At the same time, the media is pushing the inflation fear/hurt button all the time. It’s all people hear especially from 1 side of the aisle. Plus, they see more automation as they check out, they can’t get a real person on the phone, and they hear how wonderful the profits are for the corporations they are interacting with. They aren’t feeling the benefits of cutting labor coming back at them. All they feel is a colder interaction.
Today, listening to my local NPR, they have on a Prof Jonathan Gruber (MIT no less) said all the economist are expecting inflation to rise going forward. He expects Powell will do the right thing. That was not enough though. He then got on the national debt band wagon. It’s terrible and did you know in 75 year it will be $65 trillion! The hosts were impressed. Their response was as if they were told of a ticking time bomb, which is exactly how Gruber presented it.
What do you think all the people listening immediately thought when they heard that 75 years from now the debt will be $65 trillion? Did they think: Yeah, and how big will our economy have grown in 75 years? And how much more will this nation be worth in 75 years? The host sure didn’t. Oh, and of course Gruber said we have to cut spending.
Why do people think things are bad? Because that’s what they experience in multiple ways.