There was a time in the 1970s, during a decade or more of stagflation, when people must have been discouraged. How could they ever break out of the trap? And then Paul Volcker came along and administered 'shock and awe' to the interest rates. In a year and a half, the stagflation era was over.
Can it happen again? I would like to think so, but I can't. The country is just too hooked on low-interest rates and helicopter money.
Real life will go forward based on substituting inferior goods for better goods and then using deceptive labelling. When was the last time you bought Swiss cheese? Did you notice that it doesn't have holes in it, anymore? I suppose that is because of "adjustments" (aka, cheapenings) to the aging process. What really matters is that Swiss cheese now tastes like cheap rubber with some yellow food coloring.
What is to stop new Extra Sharp Cheddar cheese from being the same as yesterday's Sharp Cheddar? It won't show up as inflation as calculated by government economists.
I chose these examples because they are tangible and visible. There can be hundreds of examples that demonstrate the same principle.
Automobiles are another place to look for the substitution of inferior goods, or deceptive relabeling to happen. We already have that in the example of "sports utility vehicles" becoming fake SUVs: they are just mommie-mobiles based on car platforms, not truck platforms.
Why shouldn't new "luxury" or "full-sized" sedans be the same as yesterday's "mid-size" sedan? Etc.
The best thing you can say about stagflation is that it will anger you to the point of making you give up certain vices, such as eating out, going to coffee shops, etc. But I am still a bit of a sucker for a tasty breakfast burrito. I bought one the other day. She told me it had bacon, sausage, and cheese. Wow! And the price was good.
Then I tasted it. A magnifying glass was needed to find any of those alleged meats in the burrito. Essentially, breakfast burritos are tortillas with scrambled eggs inside, and I wonder how long it will be before they substitute something else for the eggs.
In the future we should expect to go into the local hardware store to buy some wood screws: the bin labelled #10 wood screws will have screws the same size as #8 screws used to be.
If you think that is far-fetched, you probably also believe that a "2 by 4" board literally measures 2 inches by 4 inches.
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