Posted On: Thursday - December 14th 2023 7:43PM MST
In Topics: Music Trump Economics Inflation Zhou Bai Dien
Fool me once, shame on you, especially with my being a youngster and you all being PhD economists! Fool me twice, well, that ain't agonna happen regarding this old theory of the clueless on inflation.
Many of you readers will remember this. It was the mid/late 1970s through early '80s. Inflation was high. Per Paul McCartney and his old band*, prices at the grocery story were higher than the time before, wages had to go up to match prices, and mortgage rates were in the high teens. We are seeing this again, except for the mortgage rates in the high teens (much higher by the FED would bust the dollar)
Yeah, back in the day, these "experts" were saying on the B&W TV on Sunday mornings that it's a spiral, that's all. High prices mean wages must go up, so companies then must charge higher prices to make money, causing employees to demand higher wages, causing... [Hey, when do we get off this thing? - Ed] It sounded right to me. "Sure, if just wages or prices could be held constant for a few months or whatever it takes, then the whole inflation thing will be licked. #WIN - That's Whip Inflation Now. Whip it good! (No wait, Devo came around at the tail end of it, 6 years after the WIN buttons, and # signs were for "pounds", dammit!) I don't remember anyone asking how the spiral got started. Just a perturbation of The Force?
Well, what was a kid to know about the Federal Reserve and monetary phenomena? Didn't the economists know about this stuff nearly half a century ago though? Well there was Milton Friedman, back in 1970, saying "It [inflation] is always and everywhere, a monetary phenomenon." Yet, there was talk out of these heads** about price controls, wage controls, and wage and price controls. Though no Socialist even in that day, I still figured temporary measures such as those might stop the whole inflation thing.
Well, they've been controlling wages hard since that time by opening the borders and immigration depts. wide and high for that cheap labor. You'll still hear "I did that"*** Bai Dien calling out some company for being mean and jacking up prices, just, what, for the freaking hell of it? (Their inputs aren't all labor.) Prices go up very simply because Supply & Demand. For a given productivity more (FED created) currency is chasing the same goods and services, so prices of them will go up.
I really hope I don't start hearing about that Wage-Price Spiral this time around. It'd be nice if Americans could learn the simple cause of inflation from not just two guys! (Ron Paul and me, that'd be. Milton Freeman died in '06.)
Tell you what, I've got to repeat this song. Just due to the one verse, it fits this post, or any one of the many Inflation posts on this blog.
I took my bag**** into the grocery store.
The price is higher than the time before.
Old man asked me "Why is it more?"
I said you should have seen me with the poker man.
I had a honey and I bet a grand.
Just in the nick of time I looked at his hand.
Let's go, let's go, let's go, let's go
down to junior's farm where I want to lay low.
Low life, high life, oh, let's go.
Take me down to junior's farm.
Take me down, Jimmy!
Junior's Farm was not on any of the Wings great albums, except maybe a greatest hits collection. "Jimmy" is Jimmy McCollough, lead guitarist, one of a few in succession, in addition to Denny Laine, always with this band. This was, in fact, Mr. McCollough's first song recorded with the band. He died very young at 26, as many rock stars did, due to rock star causes, aka drugs.
* Yes, this guy was in a famous band before he was a solo artist, very long ago. It was called Wings
** Not to imply for certain they were indeed pot heads, as "heads" meant during those years, but ...
*** Now, I'm not at all saying it's all on Bai Dien here. That EXTRA $4,000,000,000,000 spent cause, GERMS!, was instigated with Trump in office and the Congress of the time. Additionally, Trump has been known to brag and deflect blame. Maybe you haven't noticed this ... he's so subtle ...
**** See, McCartney was nothing if not GREEN.
Comments: