Michael Kinsley writes in The Atlantic that he’s worried about inflation.
“Inflation turns life into Through the Looking-Glass: you have to run faster and faster to stay in the same place,” writes Kinsley reminding me of Paul Cantor’s “Hyperinflation and Hyperreality,” just one of the great essays in Literature and the Economics of Liberty.
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Government drives inflation, and it drives property taxes. Both of which, if taken to the limits of time, are taxes at 100% of wealth that is otherwise untaxed. Of course, if the slope of the equation of wealth on the axises of original wealth and time becomes low enough (since the slope is negative to begin with, it could go as low as negative infinity), then the system which brings this in will destroy most of the wealth it needs to survive and die out. Hyperinflation is harder to keep in check than property taxes, since one changes monthly and the other changes per second. Therefore, I welcome hyperinflation to come and destroy the system of wealth so that the parasite may die. We’ll still have our knowledge and bodies, and can reclaim the wealth without the parasite. It is much easier than battling the parasite at every point of contact.
Is he kidding? The Commentariat ignores everything.
I wonder what sorts of things Bender Spanky and crew look at to determine if there is inflation in the crystal ball. With a teenager about to be college age I see the tuition mountain in front of me and I think to myself, “Is this even considered as evidence of price increase?” I understand the Austrian view that inflation is technically an increase in the amount of money without a corresponding increase in the amount of wealth backing that money. I also understand the Austrians believe price increases are the effect of inflation and are not inflation itself. What I am curious about is what their opinion is on the price of education today and what the recommendation might be for paying for it. Beyond trying to get my hands on as much free scholarship money as possible I am uncertain what to do. I see that C.P.I. does not factor in the price of food and energy, two of the only things that really matter. Do they factor in these other costs such as education? Does the Fed consider these when it sets the price on money? Is hyperinflation starting now with higher costs for higher education?
I am curious where Kinsley gets his “faster and faster” Through the Looking Glass analogy to describe his inflation concerns. This theme is found throughout the Austrian literature: Hayek uses “faster and faster” in his Tiger by the Tail anthology to discuss inflationism. Mises uses the concept in his “The Great German Inflation” essay found in Money, Method, and the Market Process,, quoting Graham comment that the Reichsbank’s “Alice-in-Wonderland determination of the directors of that institution to run ever faster in order to keep up with themselves.” Mises also uses the concept to note that the supposed beneficial effects of credit expansion can only be kept going if the expansion is kept going at an ever faster pace. (Cite needed here.)
If the CPI was calculated using the methodologies in place in 1980, it would be around 10% now. http://www.shadowstats.com/alternate_data/inflation-charts
Let’s be prepared for surprises !
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