Inflation's unshakable malaise
So much has been written and said about inflation that adding to discourse seems almost pointless. But I subscribe to the theory that much of the current discontent across the U.S. is—and will continue to be—the result of inflation.
Some might argue that it stems more from the current presidential administration, the corruption of government in general, or rising inequality. Those all play a part. But when people feel financially stable, they are willing to overlook a lot. Broken things seem less broken when your immediate needs are met.
The inverse is also true.
While YoY CPI has been decreasing and is now around 2.4%, it's essential to remember that inflation is cumulative. The amount of inflation we've experienced in the last five years is around 20% overall, with housing rising above that depending on the region. It's also important to recognize that tariffs have also raised prices by another few tenths of a percent.
We all know the financial impact of inflation first-hand, since we experience it every day. But I think many of us will be psychologically impacted by inflation for decades, if not the rest of our lives.
I've had numerous conversations with friends and family members that are "doing better than ever" on paper but still spinning their wheels. That feeling doesn't go away. It's a virus that starts to affect everything. Your ability and desire to spend money on anything non-essential. To travel with your family. To participate in American rites of passage like taking your kids to Disneyland or spending the weekend in Vegas. To help your children attend college or afford rent when starting out.
Cumulatively, this results in the persistent feeling that something is incredibly broken. The implicit promises of working hard and succeeding in a career are not resulting in the life that they did a couple decades ago. The K-shaped economy continues to grow.
People are helpless to stop the real villain, the one that has hollowed out their savings and eroded their plan for retirement. So they turn elsewhere, and the malaise of inflation casts a shadow over their perception of everything. Deficit spending. Endless war. Their fellow man.