From Al Qaeda to the cast of Jersey Shore, who or what people believe to be America’s biggest enemy varies significantly from person to person.
Odds are good, though, that few will point the blame at the same mortal foe then-Presidential candidate Ronald Reagan identified in 1980: inflation. Reagan zeroed in on inflation and sought to, in no uncertain terms, kill it. To his credit, Reagan greatly succeeded in slowing the pace of inflation.
Now, with oil prices spiking, economic experts including Federal Reserve Chairman Ben Bernanke have expressed concern about potentially rising inflation. Bernanke said, however, a rise in oil prices would merely lead to a “temporary and relatively modest” increase in consumer price inflation.
If Bernanke came shopping for groceries with me, I suspect he’d change his tune.
Before spring break, a loaf of fresh-baked bread at Ralph’s cost $1.47; that price has since risen to $1.77. Packaged deli meat, previously $3.99, is now $4.49. A 20 percent and 13 percent rise, respectively, in the cost of weekly food staples is more than a “relatively modest” increase in consumer price inflation.
This is a national problem, as evidenced by the fact that U.S. food production costs are 4 percent higher now than in 2010.
The good news is that only a few staples are more expensive, just as the growing costs of production have not caused major restaurants or bars to raise prices. No one should get bent out of shape until prices at the Ronald Tutor Campus Center suddenly rise 15 percent.
If there were just one adversary of the United States today, however, it would most certainly be inflation, given its full potential to stymie the country’s fragile economic recovery. Inflation also hits those dependent upon fixed income — like college students relying on their student loans — particularly hard, greatly eroding spending power.
Ultimately, though inflation is, at present, merely “higher-than-desirable,” a trip to your local grocery store will give you a taste of what lies in wait should America’s mortal enemy — inflation — not be tamed.
Teddy Minch is a graduate student studying public policy and civil infrastructure finance.