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.
ObamaCare alone has caused a nearly 40% hike in insurance premiums for individual policies such as the one my self-employed husband and I have. The Democrats’ save-the-deadbeats credit card law caused an immediate rise in interest rates for us always-pay-on-time consumers to cover the cost of the mandated write-offs.
Right here, in the real world, Obama’s monetary policy is starting to look like it has a bottom line screw-the-middle-class philosophy.
For the president’s information, the most dreaded word in every middle-class household’s budget confab is -- all together now -- INFLATION. And just because a few golden-boy hotshots in the jet set can somehow ignore the cost of groceries and gas when they do their little on-paper tallies of deceptive figuring does not mean that a real family can get by without taking these vital things into account.
When inflation drives up the cost of food to fuel the little human bodies sitting around the dinner table every night, then the family must get the money from somewhere else in the budget. Otherwise children go hungry. We don’t have money-printing presses in our living rooms.
When inflation drives up the cost of gas -- and gas is necessary to get to work and school and all the other places we must go -- then that extra money has to come from somewhere else. The yearly vacation, which has been cut down to a couple of days close by, has to go entirely. Or that summer camp we were planning to send the kids to is out. Or the braces will have to go on the credit card whose interest is way above “prime rate.” There isn’t a middle-class family in this entire country who does not live in dread of the I-word.
Inflation stalks like a thief in the night, filling the nightmares of homemakers and breadwinners alike.
Inflation is the invisible beast that steals the long-awaited raise before it has a chance to hit the bank account.
Inflation is the disease that ravages the arduously saved dollars of decades.
Inflation is the bandit that steals from the poor while hardly ever even noticed by the likes of the politicians who guilefully prod its crime spree.
Inflation is the monster who gobbles up the goodies of responsible citizens no matter their station.
So, when Obama and Bernanke and all the Fed gurus like Mr. Dudley put their little heads together and formulate a monetary policy, it would really be nice if they remembered -- just once -- that while the iPads and the Guccis and the golf clubs they love so much are simply wonderful if they cost a little less, the rest of us do have to worry about the rising cost of our groceries and our gas.
In our world, the necessities of life don’t get paid for with other people’s money.
We in the middle class pay the most taxes and fuel the government engine.
It would be nice if we weren’t told to eat our iPads when we notice that our government has set out to deflate the middle class.