No Inflation Monster Under The Bed

Conscience of a Liberal May 9, 2011

I’m glad to see Greg Mankiw agreeing with me on the absence of any inflation risk in the current environment. Maybe he should have a word with everyone else in his party.

Here’s another way to think about the issue. As you can see above, wages have gone nowhere. Commodity prices, on the other hand, have gone up a lot lately (although they crashed last week).

So here are a couple of questions.

First, do you see any sign that workers are about to (or are even able to) demand higher wages to compensate for the higher prices of gas and food?

Second, do you any sign that employers are getting ready to make more generous wage offers?

Third, have you heard anything about companies feeling that they have room to raise prices by substantially more than the rise in their raw material costs?

The answer to all three questions is clearly no. So what we have is a rise in raw material prices, which will largely get passed on the consumers, but no hint that this is spreading into a wider rise in prices; and with labor costs flat, that means we get a one-time jump in consumer prices, but no persistent rise in inflation.

If you want to insist otherwise, you have to tell me how this is supposed to work. And I haven’t heard any coherent explanations to that effect.

Paul Krugman is an Op-Ed columnist for The New York Times.

The anatomy of a top-down disaster.

Washington looks for trouble in all the wrong places while the unemployed are left to suffer.

Republicans are ensuring that bailouts will be bigger, costlier and more frequent.

Instead of addressing the dismal unemployment picture during Wednesday's press conference, Ben Bernanke bent to the inflationistas.

If the federal budget and national deficit situation is so serious, shouldn't we be raising taxes, not cutting them?

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A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

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In the Appalachians, the Civil War was often literally brother against brother.

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About those pillaging hordes of schoolteachers.

May 08

The Invisible Bond Vigilantes Have Resumed Their Invisible Attack

They'll keep punishing us with low, low rates.

May 08 //

Hume Day

Human understanding, and its limits.

May 08 //

The Inflation Monster Under the Bed

Can't find it with a flashlight.

May 07 //

VSP Economics

Parsing an editorial.

From the Opinion Blogs Schott's Vocab Daily Lexeme: Nepenthe

A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

Opinionator Family Feuds

In the Appalachians, the Civil War was often literally brother against brother.

They'll keep punishing us with low, low rates.

May 08

Hume Day

Human understanding, and its limits.

May 08 //

The Inflation Monster Under the Bed

Can't find it with a flashlight.

May 07 //

VSP Economics

Parsing an editorial.

From the Opinion Blogs Schott's Vocab Daily Lexeme: Nepenthe

A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

Opinionator Family Feuds

In the Appalachians, the Civil War was often literally brother against brother.

Human understanding, and its limits.

May 08

The Inflation Monster Under the Bed

Can't find it with a flashlight.

May 07 //

VSP Economics

Parsing an editorial.

From the Opinion Blogs Schott's Vocab Daily Lexeme: Nepenthe

A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

Opinionator Family Feuds

In the Appalachians, the Civil War was often literally brother against brother.

Can't find it with a flashlight.

May 07

VSP Economics

Parsing an editorial.

From the Opinion Blogs Schott's Vocab Daily Lexeme: Nepenthe

A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

Opinionator Family Feuds

In the Appalachians, the Civil War was often literally brother against brother.

Parsing an editorial.

A drink, potion, or drug bringing, or supposed to bring, forgetfulness of trouble or grief

In the Appalachians, the Civil War was often literally brother against brother.

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No Inflation Monster Under The Bed

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