"You'll never get ahead if you don't take care of what you have." - Doris Waddell, RIP

A historic building on our U of M-Morris campus - morris mn

A historic building on our U of M-Morris campus - morris mn
The multi-ethnic building was the original home of the music department at UMM. (B.W. photo)

Wednesday, April 6, 2011

In this, our concerns are not "inflated"

Michael Kinsley once wrote that inflation comes along once every generation. Inflation isn't just one of those little economic phenomena that we can easily absorb. Inflation assaults us.
We associate it with higher prices but it also comes in the form of smaller packages. Many writers have noted that the latter is becoming a popular adaptive strategy by manufacturers.
Cereal manufacturers have long told us that "contents may have settled during shipping." Does it seem like those words appear larger now? If it seems like you're only getting half a box, you're not supposed to fret.
People figure all this out eventually, though.
A major wave of inflation is like a sudden new tax. Your money is devalued.
There are strategies to keep your head above water. One of these is going to the "big box" stores. These are much better developed than when I was a kid (when it seemed you had to go to "the Cities" to visit a Target store).
When I was a kid, we had the mother of inflationary bursts. This is what Kinsley talks about when he makes the once-every-lifetime reference. This is our tolerance level.
But how quickly we seem to forget when it subsides. I can hardly think of anything more worrisome.
Inflation crossed my thoughts here in Morris Saturday morning. I shoved three quarters into that green Star Tribune vending box in front of DeToy's Restaurant.
Saturday is the only day I consider actually buying the Strib. On other days it's available for me to look at as I make my rounds. I could actually track it down this way on Saturday too, but I find it helpful to depart from my weekday routine.
So I go to DeToy's rather than McDonald's, willing on this one day to overpay for my breakfast. And it's helpful to touch base with waitress Felixia on NFL matters. The NFL is in tumult now with labor issues. I can read about it in my Saturday Star Tribune but it takes more than three quarters now.
What a rude awakening Saturday morning. After dutifully putting in my three quarters, I routinely yanked on the door of the box. My reflex was rudely rejected. At first the reality of a price hike hadn't dawned on me. Perhaps a case of no coffee yet.
I got some fresh air by walking over to Willie's Super Valu. I grabbed the Star Tribune and handed a dollar to clerk Mary Philiph. Mary revealed the historic news: Never again would the Strib cost less than a buck.
"It started this past week," she told me.
Now, this is curious: an industry that we all know is on the skids - newspapers - hiking product price.
Two thoughts: Has the Strib crossed a line in terms of charging beyond what many people will accept? Eventually that line is reached and crossed if you aren't careful. Newspapers are desperate.
But that doesn't mean they can extract more money from people just by, well, demanding it.
Thought No. 2: Will the new prevailing price of "a buck" make newspaper vending boxes totally obsolete? They have already been disappearing. Remember cigarette vending machines?
Four quarters for a newspaper is awkward, and if you really feel you need to be relieved of your money to get a newspaper full of stuff you could get online anyway, you might as well buy it from someone like Mary Philiph who can take your whole dollar and stuff it into the cash drawer.
It was a downbeat start to my morning. Talking with Felixia would compensate for that.
Paging through my Strib, I couldn't justify the price hike.
A quarter here and a quarter there, and pretty soon you're talking about real money.
Inflation in the 1970s was truly scary. At its worst, inflation can bring disorder, the disintegration of government and the rise of despots.
Hitler's Germany rose out of the ashes of the Weimar Republic. It's instructive but we don't want to get carried away making comparisons with Germany of the mid-20th Century.
A top Wal-Mart executive got headlines last week when he warned that a burst of inflation is likely to come starting about in June. Wal-Mart might be a last refuge to find relatively low prices. When one of their top people finds it necessary to give a warning like this, it's worrisome.
Economic distress has a subtle effect on people. It affects their temperament. It affects the tone of the entertainment we choose. It affects our movies. Idealism wanes.
It's why, as Kinsley wrote, we can absorb inflation but once in a lifetime (or generation). Finally the brakes need to be applied and we swear "never again."
Paul Volcker applied the breaks at the Federal Reserve to slay the inflation beast of when I was young.
I remember going to First Federal Savings Bank (Savings and Loan then) and getting a certificate of deposit with 13 percent interest. People have told me it got even higher than that.
Imagine this kind of world again. It's why we must be vigilant keeping the Federal Reserve from printing money to solve every crisis. If you think these emergencies are bad, wait 'til we get a major wave of inflation. A big nest egg can shrivel up.
Price hikes are eye openers, like in the '70s, the first time I needed more than "a buck" to simply buy a hot fudge sundae at a St. Cloud Dairy Queen. I handed the clerk a dollar, not certain of the exact price but surely expecting some change. The question was just how much change, not that I cared a lot.
I think the price turned out to be a few pennies over a buck. I remember the clerk at first was going to just forgive the difference. But when I realized what was up, I dug out some extra money.
Years from now I'm sure I'll remember the surprise of a buck for the Star Tribune the same way.
Years from now there may be no newspaper vending boxes and maybe no newspapers! But I'm sure there will still be hot fudge sundaes.
Will this blog post look prescient if it's called up a year from now?
I certainly hope not.
- Brian Williams - morris mn Minnesota - bwilly73@yahoo.com

No comments:

Post a Comment