'That Doesn’t Feel Like $150 Worth of Groceries'

[Valin]

Common Sense With Bari Weiss

Why inflation is worse than you think.

Samuel Gregg

May 5 2022

In 2011, the last time inflation was on the rise, the then-president of the New York Federal Reserve, William Dudley, ventured into a working-class neighborhood in Queens, New York, to give a speech explaining why inflation wasn’t a big deal. Finding that he wasn’t making an impact, Dudley famously picked up an iPad 2 and told his audience, “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful.”

“I can’t eat an iPad!” someone in the audience shouted back.

I was reminded of this story recently while standing in the checkout line of my local grocery store. An elderly neighbor standing in front of me saw the total price of her purchases flash up on the screen. For a moment, her eyes registered shock. Then I heard her mutter, “That sure doesn’t feel like $150 worth of groceries.”

What my neighbor was sensing was the general increase in the price of goods and services and an associated decline in her money’s purchasing power. That’s the essence of inflation. 

I didn’t have the heart to tell her that a bag of groceries isn’t included in what’s called the “core inflation” measurement. That’s because energy and food prices are subject to sudden variations caused by events like crop failures or war. Fluctuations in the price of a carton of milk are not thought to tell us much about long-term inflationary trends. 

The problem is people still have to spend their hard-earned dollars on food and gas—and there’s no reason to assume that spiking inflation doesn’t affect that.

(Snip)

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My problem with this is I'm not a big Cabbage Fan.