Inflation is a hard thing to understand, and so is Economics as a field in general. That said, there are some lessons…
Look at the Inflation crises of 2022. During a global pandemic, during the starting of a potential World War, the United States on the brink of a civil war, and countries all around the world struggling to maintain a supply chain things started to get pretty bad, economically speaking. Politics clearly took a role in it. With those on the right (mostly fascists) claiming that inflation was out of control (followed by gas prices rising within 24 hours, more on that in the next paragraph), and those on the left (correctly) blaming Organizations for gouging prices under the guise of Inflation.
Now, inflation takes a long time to have an impact on an economy. Generally, changes to monetary policy, geopolitical shifts, and OPEC decisions take an average of 3 months to 2 years to have a notable direct impact on an economy. However, I’m sure you have all seen news articles and situations whereby there is an announcement that OPEC is going to slow production. This causes gas prices to go up within a day or two, generally at rates of 5-10 cents per increase, and over the course of a period of weeks, gas prices skyrocket. (In the case of the 2022 Crisis, days). This rate is both faster, and higher, than actual inflation.
So what’s happening?
Well, I will give you two explanations. I’ll give you the academic respojnse to do due diligence to ensuring a good solid foundation of understanding, and then I will explain what that really means.
So, economics is a statistical science of predictive analysis. That might sound like a lot, but really what it means is that Economic Scholars (not Practitioners, they don’t actually practice economics, they practice grift.) take a lot of data that is correlated, and attempt to draw meaningful connections within that data in the form of complex and real analysis on data sets. These data often bring us to causal links, or at least indicators of informative and strong correlation. The problem is there is a delta in Economic studies that is often neglected. Ironically, the same one that is far-too-oft neglected in Information Security and Information science:
People are not logical entities, in fact if you try to reduce them to numerical values and data sets, you come upon a pretty strong model for entropically increasing datasets. This is why it’s so hard for Neuroscientists and Psychologists to actually be able to achieve anything at scale, but have really fantastic individual results. (Similar to how economists can tell you how to budget successfully, or an incident responder can clear a malware infection.) Ultimately though, attempting to apply these kinds of things at scale is not only academically irresponsible, but patently manipulative.
What happens next is that these economists take this historical view and attempt to use it to plot curves for future growth assuming certain changes in the system itself, and assuming these changes are predictable. Acceptable numbers of assumptions in simple predictive statistics are 1, or 2, per study. Using complex multivariate analysis you can get upwards of 20, but beyond that you really need to be developing novel predictive models.
Economists did develop novel predictive models for economics, but they didn’t do so with any sort of confirmation of the model. There are some valid models in the world of economics, but generally the more macroscopic the model (in any science or statistical study) the less reliable the prediction.
Effectively, this leads to a lot of hypothesizing and testing. Which is good, but given the primary nature of economics to be predictive, it causes some issues when these models are conceptually and abstractly tested followed by an immediate implementation of the guidance from this heretofore unproven model.
This is not a unique problem to capitalism, but it does cause unique consequences when taken in a Capitalist context.
- There is more pressure to create bold predictive models to create the highest profit
- There is more pressure to manipulate the data to make your model more profitable
- There is more risk in acting on the data
- It leads to all aspects of society including health, birthrates, science, etc. to be assumed to be economic.
So, effectively, what’s going on is something like this: Gas prices are being hit pretty hard by a combination of 4 factors:
- A dwindling supply and growing understanding of that and the impact of using the supply
- An economy that is falling apart due to compounding factores
- Growing inflation
- Supply chain failures
The issue with this is that the organizations that are talking the most about record inflation, and economic problems are doing better than they have done in 50 years during the worst inflation crisis in 40 years. (That should give you an easy understanding already, but I’ll finish regardless). These organizations know all 4 of the above truths. They also know that they have political cover for taking these actions in the current polarized political environment.
This, in turn, has caused gas prices (and other CPI sectors) to rise substantially so rapidly that large organizations are trying to pivot in ways that are pretty hard to do. Think about how long it takes to move a really big ship; that analogy holds in the economics of commerce. So, the greed of some critical sectors (energy, food, and healthcare are all part of the 19 critical infrastructure sectors) are causing other organizations to fail to meet obligations in some pretty confusing ways (For instance, some freight companies are contracting more local drivers with self-owned trucks to do deliveries if the calculation comes up right.)
There are ways to fix this. One is to eat the rich, which I don’t really agree with on a palate level, but the removal of the rich from their station in society would probably be good. It would also be the consent of the masses that gets this achieved.
The next, and one I am much less fond of, is for the President of the United States to do what undereducated rural conservatives think he should do. This would require activation of a number of defense acts, that give POTUS strong and unilateral authority to make economic, military, and public safety decisions. (One might wonder if the statutes actually lay out the process of liquidating the Bundesrat in the process.) This is theoretically possible, but once those powers are taken, they are notoriously hard to take away (the only time in history I can think that they were willfully returned was recently in Canada by Trudeau.). Moreover, these are the same powers that, if retained, would allow a POTUS to succeed in a coup, or would pass to the next POTUS who could then succeed in a coup. Now, I understand why some people might think they want that, but that points to a pretty hard lack of critical thinking ability.
In short: the greed of some corporate executives, as it has since Regan, is causing the collapse of the world economy, and has created political destabalization such that, in addition to the millions of people dead from COVID, millions more will die in the ensuing conflicts. Probably because someone fucking decided to commercialize water. (Tank Girl is a fun example of what happens when potable water is a rarity.)
And yes, this whole fucking post was all to point out that Oil Executives are greedy, and a fundamental misunderstanding of a basic building block of our society is stopping just under half the country from thinking “Oh, we should maybe stop these oligarchs from taking our money.” and keeping them thinking “Let’s Make America Fascist Again!”