Brace for Painful “Transitory” Inflation

The Houston Courant ^ | 5/21/21 | B. Vasoli

[The Houston Courant]

Gasoline prices have reached their highest level since 2014, still a month before summer. Food has gotten 3.5 percent more costly than it was last spring. Transportation and furniture costs are soaring. But Americans beginning to feel squeezed by inflation have a president whose advisors and friendly press offer words of solace. Judge for yourself whether they sound comforting.

Economist and New York Times columnist Paul Krugman maintains that “policymakers should keep their cool…” about the nearly 4.2 percent April increase in the Consumer Price Index (CPI), which looks to him “like a temporary blip, reflecting transitory disruptions as the economy struggles to recover from pandemic disruptions.”

What the author of that commentary is missing (besides a thesaurus) is a clear perspective on how what he calls “transitory” inflation can impact economically burdened families. And Krugman is not alone. In the weeks since inflation hit, “transitory” has seen more usage than any other term in the policyspeak lexicon.

Council of Economic Advisers Chair Cecilia Rouse earlier this month told Fox News that she and her colleagues “expect that there have been supply chain disruptions that will cause some transitory increases in prices.” White House Press Secretary Jen Psaki had the strange notion to directly (and accurately) attribute some of the current inflation to Joe Biden’s spending policy: “The expectation from economists, both inside and outside of the government, is that the impacts of our proposed investments are transitory, are temporary, and that the benefits far outweigh the risks. We look at it, certainly, through that prism.”

[Oatka]

Soon to be followed by the government basing the official inflation rate to the price of cattle manure, eliminating the “highly volatile” components of energy, food, housing, and medical care.

Government inflation indexes are all smoke and mirrors. Years ago, Brazil based their inflation index on the price of black beans in some key state. When inflation started to escalate, they trucked in TONS of beans to depress the price.

As to their "highly volatile" components, the stock market is the definition of volatile, yet Moving Averages are used to detect a trend. Anything that is a real inflation indicator is dropped from the index.