Nearly all of us who are part of the American economy are right now suffering from the worst inflationary spiral in many, many years.
The Federal Reserve has raised interest rates consistently for the past year, and there is the belief interest rates could go even higher. By raising the cost for money, the tendency is to rely on less money being borrowed, fewer homes being built and sold, fewer automobiles, and fewer everything being bought and money spent by consumers.
Raising interest rates also causes the job market to contract, rather than to expand. This is also perceived as a policy by the Fed to bring down inflation – that is – the cost for goods and everything else we spend and or buy.
In the post pandemic world that has gone back to work, the expansion of world economies happened so fast and so powerfully that inflation got its hold on nearly all the major and minor economies on the globe.
That expansion was at first a welcome sign that we could come back from the pandemic in a big way and expand our economies and survive.
Inflation, however, is like poison to struggling people dealing with getting by.
Locally, inflation has caused persistent food insecurity and rising rents and prices for housing that are not within the reach of working class people.
College tuitions continue to grow higher. Federal loans to college students that were placed in abeyance during the pandemic are about to be re-instituted.
What to do?
There is not much that can be done to lower the price for food and staples. Once all those prices have gone up, it is near to impossible to bring them down.
Unless you are rich and don’t care about higher prices, although from our experience during a long life, rich people care more about money than people who are struggling, inflation is a huge issue, a number one type of issue.
Who is responsible for inflation? Is it the democrats or the republicans?
It is all of us and the system we operate under.
Our economic system is somewhat out of control.
The head of General Motors made $29 million in salary last year. Striking employees at the automaking giant are seeking raises in their salary and benefits that pale by comparison.
General Motors made billions in profit last year largely on the backs of the labor provided by its employees and because of the smarts of its corporate chief, who made $29 million.
There may be no reason to pay anyone $29 million for a year of their labor when tremendous profits were made and distributed, in part, to the employees and the stock holders.
But this is America, the land of opportunity.
If you do well, you should expect to be paid well whether you are an employee, an owner or a corporate chief.
The government shouldn’t be allowed to control what an individual makes.
On the other hand, the government must have a voice in maintaining a balance for everyone involve ed in the American experiment.
Inflation is odious. It hurts everyone, rich and poor alike.
Every effort must be made to contain inflation, to beat it down and to gain a strong economic footing.
This is what the Fed is trying to do, maybe imperfectly, but at present, there are no other options on the table but for raising interest rates to douse the inflationary fire.