{"id":38644,"date":"2022-08-31T10:11:52","date_gmt":"2022-08-31T16:11:52","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/our-view-each-transaction-says-yes-or-no-to-inflation\/"},"modified":"2022-08-31T16:11:52","modified_gmt":"2022-08-31T16:11:52","slug":"our-view-each-transaction-says-yes-or-no-to-inflation","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/our-view-each-transaction-says-yes-or-no-to-inflation\/","title":{"rendered":"Our View: Each transaction says yes or no to inflation"},"content":{"rendered":"

Inflation is front and center in the midterm elections. But don\u2019t fall under the sway of candidates who claim the superpower of inflicting real-time effects on inflation. They don\u2019t have it. The Federal Reserve has already used its largest tool \u2013 interest rate hikes \u2013 to settle the economy. As we wait for this to happen, we\u2019ll be entertained by smooth politicians promising lower gas prices, unending baby formula, and the sun, the moon and its ocean tides \u2013 and<\/em> reduced inflation. Especially the inflation part.<\/p>\n

But you, reader, do hold that power to decrease inflation. The secret is to not expect<\/em> it. That\u2019s right. This psychological component is potent. If we believe inflation is temporary, and spending habits and behaviors reflect this, Americans will bring down inflation, according to Jeanna Smialek, Federal Reserve and economy writer for The New York Times<\/em>.<\/p>\n

That\u2019s all well and good, you may say. But Colorado\u2019s inflation rate increased almost 15% with household costs up $908 a month, according to the U.S. Congress Joint Economic Committee in June. Although the Fed attempts to fix this, consumers still get the jitters and react in ways that work against best efforts.<\/p>\n

Stay with us because Smialek has some strategies. Some behaviors combat inflation, others make it worse. To understand this, Smialek suggests thinking of the economy as your therapist. Say you\u2019ve gone through a bad romantic breakup. You tell your therapist you will be heartbroken forever. Your therapist says it\u2019s terribly painful \u2013 now. It won\u2019t always be this way. But if you act like you\u2019ll be heartbroken forever, you\u2019re more likely to realize this based on your behaviors. If you don\u2019t ever see friends, just binge-watch \u201cLove Island (UK)\u201d and give up, this could become a self-fulfilling prophecy.<\/p>\n

If consumers believe inflation is a permanent feature of the economy, spending behaviors could make this come true. A self-fulfilling prophecy.<\/p>\n

Instead, consider inflation short-term and behave accordingly. For example, skip that iced coffee that increased to $9. You\u2019re not willing to endure this cost increase.<\/p>\n

A behavior that keeps inflation inflated would be to accept the higher price and buy the coffee anyway.<\/p>\n

To readers with a basement stacked high with toilet paper for the next pandemic. (No judgment.) Say a package increased to $40. You buy it because you feel prices will only skyrocket. You, my friend, are contributing to inflation. Companies will be emboldened to charge even more down the road. Your purchase signals that inflation is here to stay. Everything is scarce and it will all only get worse.<\/p>\n

Smialek said most people toggle between both places \u2013 passing on pricey coffee in the morning but buying high-priced electronics on Amazon at night, resulting in higher demand, sold-out items and ridiculous prices.<\/p>\n

It\u2019s trickier when our hands are forced. We need brake pads and the price increased to a crazy $600 each. The mechanic says they\u2019re made in China and the pandemic lockdown closed factories. The supply chain stopped completely. Obviously, we have no choice here.<\/p>\n

One way to avoid passing along inflation is to simply bear it. Say you own a condo and fees increased. Do you raise the rent, passing along inflation to your iced-coffee deprived tenant who spent her last dime on brake pads? Or do you sacrifice this cost? Each choice gives us agency in putting a dent in inflation.<\/p>\n

The central bank probably took too long in correcting inflation by not raising interest rates sooner. But enough Monday morning quarterbacking. Each transaction says yes or no to inflation. Whatever your choices, remember our words. No politician alone can make inflation better.<\/p>\n","protected":false},"excerpt":{"rendered":"

Inflation is front and center in the midterm elections. But don\u2019t fall under the sway of candidates who claim the superpower of inflicting real-time effects on inflation. They don\u2019t have it. The Federal Reserve has already used its largest tool \u2013 interest rate hikes \u2013 to settle the economy. As we wait for this to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[125],"naviga_topic":[],"class_list":["post-38644","post","type-post","status-publish","format-standard","hentry","tag-newsletter-opinion"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/38644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=38644"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/38644\/revisions"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=38644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=38644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=38644"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=38644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}