Experts claim inflation is around 3 percent. No. It is much higher and becoming entrenched. Here’s why.

Background

On TV and in newspapers I constantly hear and read inflation is decreasing.  An Associated Press article argued in the past year, inflation fell from 9% to near 3%. Prof. Paul Krugman (whose articles I love and regularly read in New York Times) has opined How (Many) Economists have missed the great Disinflation.

Disclaimer, I am not an economist and not schooled in multivariate analysis of prices and trends. But I can read the numbers on a bill and compare them to earlier ones. I find inflation is NOT under control and in some cases increasing.

Numbers I had to deal with Recently.

Annual registration renewal fee for my car—up 13 percent.

Monthly cost for Bucks County Courier Times e-newspaper—up 25 percent.

Yearly premium for my home-owners insurance—up 54 percent.

The cost for registering my car is determined by the Commonwealth of Pennsylvania. This increase cannot be blamed on COVID-19, Russian intrusion into Ukraine, disruption of global supply chains or Chinese machinations.

I see no reason for the high jump in price for a local county e-newspaper; no expenses for paper and printing.

Home insurance costs are out of control. I inquired and was told there were losses incurred by the carrier in my area leading to the large rate hike. I wonder. I live in south-east Pennsylvania, an area not known for severe hurricanes, floods, earthquakes or fires. I hate to think of the price increases that await Floridians, Texans, Californians and Hawaiians.

With the numbers above, is inflation really under control and approaching 3%?

No, and no.

On Credit Card Surcharge

Some businesses, especially restaurants, are now adding a surcharge if you pay by credit card. They used to absorb the cost before. Now they cannot afford to and so it is passed on to the consumer. That is an instantaneous 3-4% jump in price. Things are not where they were before COVID-19 disrupted our lives.

Entrenched Inflation

I fear inflation is becoming entrenched. Some businesses have realized customers (once flush with cash from stimulus checks), are willing to pay the higher prices. Why then, lower them? A price aberration, at one point, is becoming the norm. And we are seeing this across a wide swath of the economy (consumer products, health care, travel and insurance, to name a few).

What we can do

How best to tackle this? The consumer has a crucial role. We can cut back on discretionary spending. But we cannot cut back on food, medicines, home insurance and other necessities.

Inflation is a critical issue, especially for the rising number of seniors, on fixed incomes. How will they cope? What are the government plans, if any, to prevent price-gouging?

But the first step is to acknowledge inflation is still unacceptably high. Only then can we attempt to lower it. For that to happen, the media, politicians and policy makers should take off their blinders.

There is an important election next year, and “It is the economy, stupid”—still holds. I, and millions like me, will be watching carefully what the candidates plan to do about the economy and inflation. These are very high on our list of priorities.

I have written to my elected representatives and am waiting for their responses. Maybe you should too, if high prices are of concern.