The Price Increases You’re Paying Are “Not Your Grandfather’s Inflation”

Raising interest rates won’t fix the real reason behind inflation: price-gouging and corporate greed

If your grandparents were supporters of President Gerald Ford, they might have owned a button like this. Unfortunately, the Federal Reserve is using the same tactics today to address inflation that Presidents Ford, Carter, and Reagan used in the 70s and 80s. That doesn’t reflect the reality of our current situation.

Last month, the Federal Reserve issued the first of a projected seven interest-rate hikes this year in order to slow the American economy down and, hopefully, lower the skyrocketing prices that American consumers are paying. This is how the Fed successfully curbed inflation in the 1980s: Raising interest rates knocked the economy into a recession and spiked the unemployment rate as high as 11%, which drove down prices. But some experts doubt that raising rates will actually address the realities of our current inflationary crisis.

The rising prices that have plagued Americans for the last six months are “not your grandfather’s inflation,” said “Pitchfork Economics” podcast cohost David Goldstein in a recent episode. The spiking prices for gas, groceries, and housing supplies we’ve seen have “nothing to do with what we experienced in the 1970s,” when America suffered from “high unemployment and high inflation at the same time,” Goldstein said.

The pandemic isn’t the only factor in rising inflation