Inequality, Inflation, and the Mess We’re In
In a ground-breaking article earlier this week, Jon Hilsenrath of the Wall Street Journal showed that one can’t even guess at the outcome of unprecedented accommodative monetary policy without factoring also the impact of fiscal stimulus unseen since the Great Depression.  As I told Jon, these two juggernauts are not only steaming towards each other, but plowing ahead regardless of seas made stormier by economic inequality at ever steeper heights.  The Fed for example thinks inflation is “transitory” because it measures inflation without regard to income inequality.  When inflation is understood as purchasing power – the measure the law demands – it’s clear not only that inflation isn’t transitory, but also that it’s very, very worrisome.

M052121.pdf