Obama's Monetary Policy: Stick It to the Middle Class
It’s a rare day when I, a self-confessed macroeconomics ninny, dare to write about anything so weighty as federal monetary policy. My husband of four decades loves to joke that I know nothing about money except how to spend it. (Ha. Ha.)
He fails to mention that I have been the chief financial officer of my household budget for 41 years now -- that I have managed to put wholesome, safe meals on our family’s table through some of the most treacherous-to-the-middle-class periods of inflation in American history. Or that I take only cash to purchase nearly 100 items every single week and am never off my cost estimate by more than a few dollars at checkout. These are feats of which I am quite proud. In the process of weekly grocery shopping over four decades, I have become an expert at spotting inflation before my financial-guru husband has the slightest clue what’s around the bend.
I’ve been sounding the hyperinflation alarm for more than a year -- to rolling eyes and shrugs, and the all-too-familiar “you just want a raise” discounting tactic. So when I read this little piece in the Wall Street Journal last week, I would have been downright giddy at the validation, if I weren’t so utterly depressed by the reality.
It seems that one heck of a prestigious dude -- William Dudley, president of the New York Federal Reserve -- decided to have a little tête-à-tête with local consumers, no doubt sensing a need to bolster their confidence in the Fed’s more-fishy-by-the-hour monetary policy.
Mr. Dudley gave a nice PR speech highlighting “improvements” in the economy and the Fed’s “successes.” Then came the questions. One guy had the audacity to hope he could make some sense out of the government’s insistence that inflation remains minimal despite the largest monthly increase in food costs in 36 years -- and gas spiking so much that soon the cost of getting to work may exceed one’s wages. Dudley made use of a skill they must have taught him at Berkeley, proceeding to ram his Goldman Sachs resume, along with his Gucci loafer, right through his front teeth:
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he replied. "You have to look at the prices of all things."
To which one truly great American responded: “I can’t eat an iPad.” He might as well have added, “I can’t drive an iPad to work either.” And at the rate grocery and gas prices are rising, by the end of this year, I couldn’t afford that iPad’s monthly service fee even if I had enough discretionary income to purchase the little piece of dazzling technology in the first place.
If you ask me, Ms. typical American middle-class consumer, I would have to say that Mr. Dudley’s current yearly salary of $410,000 in taxpayer money is just a tad inflated as well. That $410,000 of our money is mere chicken-feed to a man of Mr. Dudley’s stature, I’m told. When he was at Goldman Sachs, he was pulling in millions every year. I’m sure he was worth every penny. If inflation really were down in the 2% range on the genuine necessities of life for us little people, then I wouldn’t begrudge the guy his half-million in wages and benefits.
But Dudley’s salary, along with Geithner’s and Bernanke’s and even Obama’s, are all based on lying statistics that mean nothing in the real world where inflation is actually rampant.