The Ruling Classes Are Inflation Deniers and the Ship of Fools Sails On

April 24, 2023

by Kevin Van Elswyk Mises.org

Continued inflation inevitably leads to catastrophe. — Ludwig von Mises

Consumers’ behaviors cause the consumer price index (CPI) broad heading of food to understate the real or wallet level of inflation. It is much worse than the top line statistic—it is a serious offense to the poor and fixed-income citizens.

The CPI measures nominal dollar changes based on month over month and year over year for 299 items. The year ending December 2021 posted an overall CPI of 3.4 percent. Food at home was up 6.5 percent during this period. For the year ending 2022 the CPI rose 6.5 percent while food rose 10.4 percent. Compounding the two years the CPI rose 11 percent, and the food at home category rose 17.6 percent.

For this same two-year period nominal hourly wages for private industry rose 15 percent. A two-year period from fourth quarter 2020 to fourth quarter 2022 shows real wages decreased by 4 percent. There is no relief, even for the fully employed.