Here is something fun. I’ve already announced that our prices are going up in November. I have told clients and listed the new prices. Fun fact on that is that if the fed raises rates today to fight inflation I might have to increases the prices even more. You know why? Because an increased rate isn’t going to stop gas prices and if the cost of borrowing goes up and the middle to lower end of the economy is already in a recession then guess what is going to happen?
Look at the behavior of real people over the last year. There was a reason our business was steady through June, July, and August and never saw a summer travel spike. People are already choosing cheaper travel options. Staying closer to home, taking shorter trips, staying in cheaper accommodations. People are shoving gas and groceries onto credit cards and getting fucked at the pump.
The other side is almost as bad. If the fed holds or cuts then they could be seen as not taking inflation seriously or giving in to political pressure. Of course the immediate reaction of pundits and talking heads isn’t nearly as important as the real world impact, and while it is a stopped clock fallacy Trump might be right on this one. A rate cut would allow the bottom of the economy to start to catch up to the top while a rate increase could accelerate the economies transfer of wealth from the bottom to the top.
Society should be run bottom up and not top down. Keep in mind that inflation is a natural check on the business cycle. Run away inflation can be bad, but inflation itself is a side effect of a hot economy and without checks on price gauging and other shady business practices then prices aren’t going to come down at all.
Look at what happened with tariffs and who ultimately paid that bill. The problem with everything is the bill is due at the end and it is going to be passed down the ladder. The answer might be as simple as this isn’t an issue the fed can handle, and maybe that is what needs to be said in their remarks. That this is a legislative issue and not a rates issue and therefore today we held and hope Congress can get their shit together and the Executive can stop creating supply shocks. It’s not passing the buck if the blame is aimed in the right location.
David Huzzard Writes 