Inflation

Gasoline, heating oil, natural gas, airline tickets, beer, food, fertilizer, haircuts, health insurance, and shipping are all about 20%-25% more expensive than a year ago. I’ve never lived through this sort of rapid inflation, and I’m not actually sure how to think about it. Especially since wages are not increasing.

On the personal front, I can obviously reduce some expenditures. Travel less, drive less, eat out less, put off major purchases. Having money in the bank starts to feel foolish, since the value of that money is dropping rapidly. Not having money in the bank is risky, since we’d like to pay our bills.

On the business front, should I raise the price on books already in my catalog? Add an inflation surcharge to mimic the fuel surcharges and energy surcharges and baggage surcharges and ad infinitum surcharges on everything I buy? But since I don’t want this sort of inflation to be happening, shouldn’t I refrain from contributing to it? How big a raise should I plan on for my employee, given that his costs are also increasing? Don’t I have a moral obligation as an employer to have wages keep up with the cost of living? Lisa’s employer feels no such moral obligation, but I don’t want to be in a race to the bottom with them.

Not everything is increasing in cost rapidly. Claritin is about the same price it was a year ago. So at least I can watch the economy fail without sneezing.

Seriously, I don’t know how to think about it. I’d rather pretend that the price increases are temporary or manageable or limited. It’s easier than giving up my intuitions and habits about prices and wages.