Best Columns: Bouncing inflation, Fretting credit
Inflation is like that
Monetary policy can’t tame inflation
Inflation is like that “boor” who barges into “the hottest restaurant in town without a reservation,” says Michael Sesit in Bloomberg. You can accommodate it, hope it’ll leave, or have the bouncer kick it out. The U.S. Fed is hoping this “unwelcome customer” will leave on its own—and although it has undermined its “credibility” with seven rate cuts, it might have a point: “there’s probably not much that central bankers can do to control” today’s inflation. The bursting of the credit bubble should be deflationary, but energy and food costs are driven by global factors outside the realm of monetary policy. Slow U.S. growth probably will “shackle core inflation,” but if price hikes become “self-fulfilling” prophesies, we’ll need “a bigger bouncer.”
Inflation isn’t our biggest worry
Everyone’s worried about inflation, says Fortune’s Colin Barr in CNNMoney.com, but we face a “bigger problem” in “the lingering effects of the credit crunch.” The “hawkish” comments from central bankers in Europe and the U.S. carry “the implicit threat of inflation-quelling rate increases.” But while fears about the financial market crisis may feel increasingly distant on Wall Street, the effects have only just begun “to be felt on Main Street.” This slowdown will probably see a rise in unemployment, even as lenders continue to “tighten their purse strings.” And the economy won’t recover until the housing market does. With “no sign of an antidote,” though, we’ll just have to ride it out.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- He said he was leaving. She ignored him.
- 31 TV shows to watch in 2014
- Why I'm a pro-life liberal
- Why would a young person today be religious?
- How Captain America won over China
- Why Holy Thursday is so important to Christians
- How conservatives learned to hate Hollywood
- Texas has been holding this man hostage for 12,600 days
- The 6-year-old who woke up from a coma with a different personality
8 Facebook misfires that ruined lives
Subscribe to the Week