Back in November, Sarah Palin took on the Wall Street Journal’s Sudeep Reddy over inflation. Palin suggested that the Federal Reserve’s quantitative easing (read: printing money) was causing inflation that was hitting Reddy accused Palin of “inflation hyperbole” suggesting that Americans weren’t facing higher prices for groceries, etc. Palin responded noting that grocery prices were, in fact, going up, but her detractors continued to scoff.
But today, just five months later, the Washington Post reports that inflation is driving gas and grocery prices higher even as wages fall:
Inflation is back, with higher prices for food and fuel hammering American consumers, and this time it really hurts.
It’s not just that prices are rising — it’s that wages aren’t.
Previous bouts of inflation have usually meant a wage-price spiral, as pay and prices chase each other ever upward. But now paychecks are falling further and further behind. In the past three months, consumer prices have been rising at a 5.7 percent annual rate while average weekly wages have barely budged, increasing at an annual rate of only 1.3 percent.
And the particular prices that are rising are for products that people encounter most frequently in their daily lives and have the least flexibility to avoid. For the most part, it’s not computers and cars that are getting more expensive, it’s gasoline, which is up 19 percent in the past year, ground beef, up 10 percent, and butter, up 23 percent.In other words, not only is our dollar worth less, we’re not seeing wage growth. Put simply, we’re all getting poorer thanks to the government financing its deficit spending by printing money.
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