Inflation is a mind game. If Americans expect prices to rise rapidly, they act in ways that drive prices even higher, buying more and demanding steeper raises…
— from the July 13 Washington Post article by Alyssa Fowers, Chris Alcantara, Andrew Van Dam, and Artur Galocha, “Does everything really cost more? Find out with our inflation quiz.”
I’ve never been good at mind games.
Or at games in general.
But especially mind games.
For example, some writers at the Washington Post created a quiz (yes, I took the quiz, and scored 54%) that was both entertaining and informative… (if you are entertained by getting a mediocre score on a quiz.)
I was left, at the end of the quiz, feeling totally unsure whether I should expect prices to rise… or even whether everything does, in fact, cost more, despite the headline given to the quiz: “Does everything really cost more? Find out with our inflation quiz.”
…If Americans expect prices to rise rapidly, they act in ways that drive prices even higher, buying more and demanding steeper raises…
Believe me, folks, I don’t want to act in ways that drive prices even higher… and I could easily claim that my concern for my fellow man is the reason why I haven’t demanded a steeper raise. But the simple fact of the matter is, I have never asked for a raise, period. Ever. Nor have I been ‘buying more”. (On what they pay me at the Daily Post, who can afford even the bare necessities?)
If inflation is a mind game, I’ve been sitting on the bench the whole time. So if you start noticing a high inflation rate in the coming months, don’t look at me.
Daily Post editor Bill Hudson picked the following photo to illustrate this humor column. The photo definitely relates to my fear of inflation, and my dislike of mind games.
I suspect Mr. Hudson — in choosing this photo — was playing some kind of mind game with me, but like with most mind games, I cannot determine if it’s actually a mind game or just a perverse accident.
Like with inflation. Mind game? Perverse accident?
Yes, I played the Washington Post inflation quiz, and it’s very obvious, based on their computerized responses to my guesses, that they were collecting my answers into their database, and have now ranked me at 54%, alongside all the other people who failed to excel at the game. So in a sense, you could say that I’ve been a willing laboratory rat for the Washington Post.
See what I mean, by ‘mind games’? I don’t even know, for sure, if I’m a laboratory rat, or a human taking a mildly entertaining quiz.
I would be a lot more certain about my playing position, I think, if I were a participant in the inflation research conducted by Luba Petersen, a professor and researcher at Simon Fraser University who has been using human subjects to try to understand what causes prices and wages to rise.
Or, not rise, in the case of wages.
Some of professor Petersen’s research was funded by the Bank of Canada. Apparently, banks like to see a controlled amount of inflation, because consumers actually feel better about the future, when prices and wages are rising. (Even if the prices are rising faster than the wages.) When people feel good, they’re more willing to borrow money, which then makes the banks feel better about the future.
What professor Petersen has concluded from her research is that banks can tell people to expect inflation, and people might believe them, which would then cause inflation.
“According to our financial experts, we ought to see 3% inflation next year.” And presto, we see 3% inflation. Because we expected it.
But sometimes the people don’t fully believe the banks (I mean, really… who can fully believe a bank?) and when the banks predict inflation and it doesn’t happen, then people believe the banks even less.
So the banks have to be careful about this. When they want to see more inflation, they have to say something like, “We foresee the inflation rate increasing over the next 12 months… but we’re sort of guessing about it, because we don’t really know what’s going to happen… and there’s a good chance the inflation rate will stay pretty much the same, or may even go down.
“But we think it’s going to go up.”
Mind games.
Underrated writer Louis Cannon grew up in the vast American West, although his ex-wife, given the slightest opportunity, will deny that he ever grew up at all.