Image from 7AM KICKOFF
Living will be cheaper now!
Sound the hewgag, beat the drum!
Haven’t we said all along
The millennium would come?
Pessimists have gloomily
Prophesied it wouldn’t, but
Now you see how wrong they were –
Pullman prices have been cut!
But, hooray! that isn’t all;
We have other cause for joy –
Living pretty soon will be
Purest bliss without alloy.
We are all so happy now,
From the baby up to pa,
Since the papers told us that
Meats are cheap in Panama!
Now, perhaps, we all can save
And put money in the bank.
Up to now we couldn’t for
The cost of living has been rank.
Isn’t it a wondrous change!
Joyous news for every one!
Spread the tidings near and far –
Salt’s dropped thirty cents a ton!
– Somerville Journal.
The Daily Northwestern (Oshkosh, Wisconsin) May 3, 1911
And in today’s news, from Niall Ferguson at The Daily Beast:
NEW YORK – Sticker Shock The Fed may deny it, but Americans know that prices are rising. In this week’s Newsweek, Niall Ferguson takes a look at the Great Inflation of the 2010s.
“I can’t eat an iPad.” This could go down in history as the line that launched the great inflation of the 2010s.
Back in March, the president of the New York Federal Reserve, William Dudley, was trying to explain to the citizens of Queens, N.Y., why they had no cause to worry about inflation. Dudley, a former chief economist at Goldman Sachs, put it this way: “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful. You have to look at the prices of all things.” Quick as a flash came a voice from the audience: “I can’t eat an iPad.”
Dudley’s boss, Ben Bernanke, was more tactful in his first-ever press conference on Wednesday of last week. But he didn’t succeed in narrowing the gap between the Fed’s view of inflation and the public’s.
I respect Bernanke. As an expert on the financial history of the 1930s, he was one of the very few people in power back in 2008 who grasped how close we were to another Great Depression. But if we’ve avoided rerunning the 1930s only to end up with a repeat of the 1970s, the public will judge him to have failed….
…maybe inflation expectations started shifting when the guy from Goldman—a Marie Antoinette for our times—seemed to say: let them eat iPads!