Target CEO: "It's very clear that consumers are running out of money"

For a large part of America the inflation of the last 3 years has hurt a lot

Image: USInflationCalculator.com

I was recently talking with a colleague, a colleague I quite like but who is generally disposed in a different direction than me on a number of political and economic issues, who argued that a 4% rate of inflation (or something like that) was no big deal. He made the case that things were way worse in the 1970s.

In some ways he is absolutely correct. The 70s and early 80s were challenging times on the inflation front. However, in 2022 the actual true inflation rate ran as high as 18% (or maybe a bit higher) which is no joke, and despite the assurances from Washington still remains at significantly elevated levels from what Americans have long known.

Covid is often cited as one of the reasons for the inflation. But the real reason inflation took off was the RESPONSE to Covid.

We’re not just talking about the nonsensical closings and the asinine social distancing policies that created bottlenecks in supply chains. These contributed to our current inflationary situation without doubt. However, it was the flood of money the government spilled onto Main Street, via “stimies” and all the rest that woke the inflation demon from its light slumber.

Image: USInflationCalculator.com

The debate around the cause of the current bout of inflation will go on for years to come of course. But truth be told (I’ll bet in their heart of hearts) even the people who try to defend the inflationary monetary and fiscal policies of the Biden era know they screwed up big time.

But don’t expect them to ever admit it. (To themselves or anyone else.)

Regardless, many people feel poorer these days. We’d venture to say that most of the middle class in the USA feels poorer than they did a few years ago.