Inflation - the real kind and the lobbying-for-austerity-policies kind

Rick Perlstein gives us a timely warning that with inflation becoming more notable in the US and Europe, we're likely to be hearing a lot of stock corporate lobbyists and conservative economics talking smack about inflation to justify austerity policies.

More on why policymakers and media fixating on "inflation" (which may not even technically BE inflation are fixing to pick your pocket. https://t.co/HCaZZI2viK

— Rick Perlstein (@rickperlstein) January 30, 2022

The article he links is by Duncan Weldon, It's all relative Substack 01/26/2022. Weldon talks about some important current research on inflation that suggests that "the price of energy – relative to other goods and services – increasing rather than a generalised rise in prices."

The European Central Bank (ECB) has an information page, What is inflation?. When corporate lobbyists start using inflation scares to advocate austerity policies, one of the important things to remember is that "inflation" is perceived by the public in ways that don't necessarily correspond to what economic data show.

Another thoroughly establishment international institution, the International Monetary Fund (IMF), has a two-page definition of what inflation is about: Ceyda Oner, Inflation: Prices on the Rise 01/31/2022.

Paul Krugman has been looking at the current inflation story, which he admits puzzles him in some ways:

There seems to be several important components to the current inflation situation, including a spike in energy prices, pandemic-related problems in the global supply chain, an (also) pandemic-related shift in purchasing from services to goods, and monopoly pricing at work.

It's worth noting that if the current diplomatic standoff with Russia over Ukraine could wind up with sanctions being applied that would reduce energy supplies and drive up prices.

Related articles:

Robert Kuttner, This Inflation Is Different—Beware Quack Diagnoses The American Prospect 10/04/2021

The Energy Price Surge Is Squeezing Europe’s Economy Bloomberg News 01/12/2022 ("Wholesale gas prices are up almost 300% in the past year because of unusually low storage levels, increased demand from economies emerging from the pandemic and capped flows from Russia.")

Martin Farrer, Global supply chain crisis could last another two years, warn experts Guardian 12/18/2021

How the pandemic has shifted U.S. labor from services to goods PBS Newshour 10/29/2020

David Dayen, Fighting the Inflation Profiteers The American Prospect 11/24/2021