Even as I finished reading Paul Krugman's column in today's NYT, which rated the economy as very good with a few problems, the talking heads on MSNBC were losing their minds over an inflation report showing inflation running at a 6% annualized rate in November. The media has been waiting for nearly 40 years to obsess about inflation and it seems now is their chance.
As Krugman and many other economists have pointed out, last year we were dealing with the height of the Covid pandemic and demand for almost everything had crashed. People were not driving, eating out, or using a variety of services. Instead they were buying things online and there was a surging demand for hardware items which corporations had not factored in to their forecasts. Add to that the supply chain issues such as trucking and shipping.
Now, people are wanting to eat out, have their nails done and use a million other services which require low paid labor, at least traditionally. These businesses have been forced to pay more for labor and charge more for their products.
What we have heretofore enjoyed is a myriad of services whose economic model is based on cheap labor. Absent that, there will be inflation. It sounds to me that the market's invisible hand has decided social justice is a thing.
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