Inflation is such a tricky subject to discuss, in part because as a term it is too broad and difficult to explain. Some of the latest "fallout" continues because of a recent post from David Glasner, which highlighted continuing resistance to inflation as means to grow the economy. For the benefit of the population in general, it would greatly help to discuss monetary policy in terms of total spending capacity. Unfortunately, there are plenty of reasons why this has not happened. Many individuals and constituencies alike remain convinced that finance is central to monetary activity, when in fact it is an important but peripheral component.
Another problem for me: in my last post - I complained about housing inflation and perhaps sounded a lot more Austrian than I actually am. And too many internet Austrians simply use the plight of the poor as another excuse for further restricting monetary flows. I would not want to see aggregate spending capacity reduced because of housing prices. Local property values always represent a confluence of local aggregated time use value, local resource use representation and geographic identities within economic contexts.
For anyone with a relatively "normal" income, i.e. full time and approximately middle class, housing is no more of a problem than it has ever been. That is, unless one seeks to live in cities which are limited by their geographic desirability which is altogether another aspect of the marketplace. Much of the discussion online takes place about these realities, rather then the lower or no income reality I continue to highlight on this blog.
Where problems exist in housing based terms are at the margins: individuals who have no income at all and no government support, individuals with less than full time work at low wages, and individuals who make minimum wage. These are the three areas in which for the most part, one either lives with family through necessity, rents a room, or ends up homeless on the street. Unfortunately, this is not generally discussed in depth online, because most bloggers have little direct contact with this reality, and few commenters for that matter as well. Hence discussion about poverty tends to take place mostly in a political context which is not the same at all.
Were it just a matter of individuals in these circumstance, perhaps my concerns would not represent such a big deal. What I sought to get across in yesterday's post is that many communities are also having problems which are directly related to these margins as well. That makes many communities in the U.S. progressively more dysfunctional with the course of time. Many municipalities are simply not prepared for the lower end of income realities. They need to just say no, to the kinds of regulations which only make things worse and stand in the way of these individuals maintaining full ability to participate and remain responsible citizens. No municipality can expect to survive for any length of time by benefiting from the poverty of their citizens, as some are presently attempting to do.
What concerns me now as an advocate for continued economic growth and prosperity, is too many citizens remain convinced that prosperity is only possible through financial means. This is why I have such a problem with inflation as central to the conversation, because the dialogue becomes controlled to such a degree that no one can even imagine a role for aggregate spending capacity. From day one of this blog, I have emphasized the nominal target as representative of our time, because otherwise there is no way for the general public to make a real association with the value of money as important to their own destiny.
If no one can see the value of their time in association with money, no one can see the value of their interaction with resource use as central to economic activity, either. These images need to be uppermost within the context of aggregate spending capacity. Time is growing short, and we can ill afford the very definition of money value to be stripped away by financial interests. Even though my perspective scarcely makes sense to any more than a few in the present, I will continue in my efforts as long as I can.