Brad Delong has put together an excellent summary of the recent economics spat between the now Fox-affiliated pundit Erick Erickson and actual economist Paul Krugman, who lays out a pretty undeniable case that inflation has not been a problem that impacts average people in the United States. After all, there’s charts like this:
(Originally from here.)
But those reveal that inflation, or failing that price instability, was a phenomenon for those basic commodities somewhat recently during the 2007-2008 economic crisis. That said, it’s important to locate the important events of that crisis in time, and specifically as beginning under the Bush administration and has at least begun to be resolved under the Obama administration. Recalling the most memorable moments of that crisis, we can see how much they track to the beginning and end of the period of price instability for basic foods:
(The above image with modifications. The red line coincides with the bursting of the US housing bubble, the first obvious indication of the crisis. The green marks the beginning of the associated stock market crash, when the crunch was at its worst. The blue line indicates peak unemployment, after which the average person’s purchasing power at least stopped decreasing.)
There is, of course, a problem here as both of these staples have maintained their high prices in spite of sluggish improvement on unemployment and decades of stagnant wages. There are economic problems within which inflation (or rather, price instability) plays a clear role, but it’s important to remember the causes of that, which seem inseparable from Republican-led banking deregulation and the Bush era’s unbelievable mismanagement. The assignment of these problems to the Obama administration that Erickson recently took part in relies on both inaccurately understanding the nature of the problem but also fudging the context of the problem in a way that obscures solutions to the actual problems.