Inflation is here for most of us already
As many people who read my column know, I tend to be partial toward animals, particularly dogs. So it should be of little surprise to readers that I seldom buy box store type brand dog food for my canines.
That fact placed me at the feed store where I buy dog food last week. Now what I buy isn't your run of the mill $9.99 for 50 lbs. stuff that is filled with cereal and who knows what else. The food I buy comes stuffed into similar bags, but costs about two and a half times as much as the cheapest stuff. However, I was surprised when the sack was rung up by the store clerk and it was about $1.50 more than a bag I had purchased a few days before.
"Was there just a price increase on this?" I asked the guy helping me as the green bagged half a hundred pounds of dried chicken meat and other by-products weighed down on my poor old shoulders.
"Yeah, but it wasn't the cost of the food, it was the shipping," he said to me as he tucked my previously owned $20 and $10 bills into the till. "Almost all the feed we sell went up that much because of the cost of getting it here."
As I drove home I began to calculate that cost to me, based on how much food my dogs digest each month. That would mean another $7-$9 per calendar 30 days.
That night I attended a meeting where some government officials were discussing how their budgets are being stretched by the higher energy costs. But it wasn't just the fact that their fleet of vehicles were costing more to fuel up and drive that they were complaining about, but that everything they are having delivered to them has a "fuel surcharge" added to it.
The next afternoon I accepted a shipment for some boxes of materials for our back room here at the paper. Right on the bill of lading was stamped "fuel surcharge of 3 percent" and there was a total next to it.
That brings me to this past weekend. I usually don't sit around and watch news network shows on Sunday, but this past one I was working on something in my basement and had the television on. News networks, of course, just can't tell the news all the time, certainly that would be boring. So every once in awhile they have to have a panel of "experts" on the air concerning one issue or another. The issue on Sunday morning as described by the commentator was "Is there inflation taking place in the economy because of hikes in energy prices?"
The subject immediately caught my attention, largely because I thought the premise of the question was so dumb. Gas jumped up a buck a gallon in the last month and a half, diesel is up more than that and these five panelists are discussing whether there is inflation. Geez, let's beg the question.
Besides the commentator, one of the men was a high ranking government economic specialist, and the other three guys were Wall Street types. I bet none of them make under six figures and I'll bet their butlers are the ones that go and buy the dog food for their pets.
That was my first thought and I projected that none of them would say there was any substantial inflation going on.
I was right. They argued back and forth about how energy costs are presently affecting the economy and how it could affect it in the future. Only one of them thought it might have a significant effect. One guy went so far as to say "Well if you take the energy cost increases out of the equation, there is actually deflation going on," he said in an expert type tone.
Yeah, I said to myself. And if I didn't have to pay my mortgage each month you could say I would have another grand to spend on other stuff too.
What took place was the typical problem with picking nationally recognized experts on the subject of money. By the time someone is a real expert on money and economics, they have worked themselves into a financial position where they no longer live in the real world with the rest of us working stiffs.
Let's face it, if you are making $300,000 a year, a buck a gallon jump in the cost of gas affects you a whole lot less than it does the family who is making $20,000 to $50,000 per year.
By the time the 15 minute segment was over, only the commentator had taken the side of the common guy, and he did that just to be the devils advocate. As the program ended the they all concluded that gasoline prices of over $3 per gallon and natural gas supplies that could cost consumers in some parts of the country 50 percent more this winter would not affect the economy that much.
I know I live in a microscopic section of the total economy, but I have a hard time accepting that what I will spend extra on dog food, parts for my car, butter for the table or what I order from the drive up window at speedy burger because of the increased shipping cost is not inflation.
My dollar today buys less than it did six months ago.
What other definition of inflation can there be?