Inflation Freak-Out

(Lyceum photo)

A century ago the Wall Street Journal was mostly read in wood-panelled drawing rooms by pipe-smoking men in grey flannel suits.

It was a serious newspaper that covered serious matters in a pedantic style that was far removed from the subject matter and colloquial language of popular newspapers and magazines.

How times have changed. Here's the headline in today's WSJ on the subject of inflation:

(Psychology Today image)

The U.S. Consumer Is Starting to Freak Out

The person-on-the-street examples that the article cites show that working-class people are living on the edge. [bold added]

Recent layoff trends worry Benjamin DeLong, a 32-year-old customer-account manager at an industrial manufacturer in southern Minnesota. His savings rose to $3,700 during the pandemic, thanks in part to government stimulus. He is now down to about 3 cents.

Don't you just love the "about" in front of "3 cents"?

The large stock-market declines over the past year also alarmed consumers, including Scottsdale, Ariz.-based Sara Laor, who is 57 years old. Ms. Laor said the declines depleted the holdings in her 401(k) and IRA accounts by nearly 40%.

Over the past year, her family has had to dip into their savings to pay for essential car and plumbing repairs. They are putting off other expenses, like buying a new car, and have given up ordering in meals.

She’s trying to spend more cautiously, shunning recipes involving pricey eggs and buying more canned food.

Well, at least the writer doesn't report that thousands of Americans are eating dog food, as this 1975 NY Times article said occurred during the Ford and Eisenhower Administrations (but not from the Kennedy and Johnson Administrations where the phenomenon was supposedly absent).

Jazzlyn Millberry, 33, has been looking for big ways to make cuts. One day last fall, her banking app informed her that the cost of one month’s groceries and household goods for her family of four had risen to $900, from about $600 or $700.

“I find myself now going to three or four different grocery stores just to get the best deals on things to save on costs,” said Ms. Millberry, a health-insurance claims analyst in Pickerington, Ohio.

The rosiest economic scenarios show inflation tapering (but not going to zero), and workers being lucky to maintain their pay instead of being laid off. The lower gap between income and expenses will last years, leaving little margin for error.

Now that I think of it, when the inflation squeezed us during the late 1970's and early 1980's I was a little freaked out, too.