What could cause spiraling inflation? Human behavior? Looks like high energy costs are here to stay (due to years of ESG signalling leading to underinvestment in oil/gas) but what about other prices?
So if a transient spike lasts long enough to be considered "inflation", then it gets baked into wage increases, which leads to higher prices, which leads to higher inflation, which leads to wage increases...
Unfortunately, the govt thinks of monetary policy as their only tool to fight inflation, when in fact they have a much stronger, better one: public policy.
The govt should be passing emergency legislation to vastly increase supply of the three main contributors to family spending: housing, healthcare, transportation, and education.
Make it MUCH easier to build housing.
Vastly incentivize cheap car replacements (ebikes, etc).
Loosen drug import laws from Europe & CA like, yesterday.
Inflation is now moving increasingly towards these two categories, which indicates that it could be around much longer even if supply chain issues get resolved.
Hell, AFAICT I’m still living off the money I got from unemployment insurance two years ago and have just been banking the cash for the job I’ve had for the last year (and a day, yesterday was my anniversary apparently).
High energy costs are also not here to stay. There's very clearly the post-pandemic supply shock which has spilled over into high energy costs due to a bullwhip effect. And there's the war in Ukraine, which will not last forever. There's also a buildup in inventories now (the bullwhip is coming back around) and there's no huge demand for container ships from China right now. High energy costs didn't stick in 2007, they didn't stick in 2014 and they won't stick this time. Commodities/Energy inflation is cyclical.