(Roughly) Daily

Today the Bureau of Labor Statistics releases its Consumer Price Index for the month of March. Here is some important context to help understand the figures…

When inflation numbers come out on April 13, they will likely look very high. And measured annually, inflation will probably rise further over the next few months. These headline numbers will be used to argue against the American Jobs Plan and future infrastructure investments, and even to advocate austerity.

But this response will be wrong, for three reasons:

1) The high year-over-year inflation of the coming months will reflect the falling prices of a year ago, whether or not prices are rising more rapidly today.

2) Achieving the Federal Reserve’s price-stability goals requires a period of above-trend inflation; if inflation, correctly measured, rises modestly in the coming months, that’s a good thing.

3) Even if inflation is a genuine problem, scaling back infrastructure investment is not the solution. It might even make the problem worse…

The full explanation at “The Illusion of Inflation: Why This Spring’s Numbers Will Look Artificially High.”

(Image above: source)

* Elias Canetti, Crowds and Power

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As we steel ourselves, we might spare a thought for James Buchanan “Diamond Jim” Brady; he died on this date in 1917. A businessman and celebrity in the Gilded Age, he made his fortune semi-scrupulously in the rail industry and less scrupulously in stock trading and fixed bets.

His appetites for indulgences of all sorts were legendarily huge; but his nickname was a nod to the main among them– to his obsession with jewels, especially diamonds. He amassed stones worth $2 million (equivalent to approximately $61,464,000 in 2019 dollars).

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