Today’s Inflation Is Like 40s Loan Shark Capone

The Bronx Chronicle once guessed Al Capone was loansharking at 25% in the 40s. Consider today’s credit card sharks are often charging suckers up to 29.99%. Guess we get used to it as WSJ notes folks are getting used to inflation.

Inflation, like usury, can obviously make living comfortably impossible, if not a hell for those on the margins, & don’t we all know it? Not always. As the WSJ story noted: “Last fall, Americans were obsessed with inflation. The issue dominated the midterm elections. One in 5 respondents called it the nation’s most important problem, according to Gallup. These days … just 9% of Gallup respondents now call inflation the most important problem, behind govt leadership & the ‘economy in general’ and just ahead of immigration & guns. It has barely come up in Washington’s fight over raising the debt ceiling.”

So, why bring inflation up now? Because its stubborn resiliency this year, still at 4.9% per month, “may mean people are getting used to higher inflation, which would be very bad news.” How bad? The more people disregard ever higher costs & keep shelling out for everything from A to Z, there’s no incentive for businesses to cut their own prices … or even stop gaming the system with HIGHER prices (& profits). So, inflation can beget more inflation. As the WSJ piece warns, this ongoing price inflation could force the Federal Reserve Board to keep raising its own interest rates to force EVERYONE to finally pull back on charging &/or spending, even if it means “inducing a potentially deep recession to force inflation lower.” Or, we all could keep pretending inflation doesn’t matter until borrowing from a guy named “Big Al” to buy a 2 penny pretzel means taking out a $20 loan demanding 7 to 29.99% interest.

Davd Soul