The problem with inflation is that there is more than enough blame to go around.
Some folks will say it’s Joe Biden’s fault, others blame Donald Trump or Russia or Congress or the Federal Reserve. Maybe everybody is a little bit right or a little bit wrong.
I don’t know.
I grew up on a farm. And no one appreciates the dynamics of commodity pricing better than a farmer. Every morning my folks would turn on WGIL and listen to the price for a bushel of corn or soybeans and a hundredweight of hogs.
It was not a time for children to speak. This was important stuff.
But that didn’t keep me from asking annoying questions. At age 10, I might ask my father why the price of pork was high or low. And he would try to explain it in language a child could understand saying something like, “Fewer baby pigs were born six months ago and that means the supply is down and prices are going up.”
Or he might explain that we had favorable weather for raising corn and that had brought the supply of the grain up and price for it down.
And sometimes he might just scratch his head and say, “I don’t know why it’s doing what it is doing.”
My point? Rarely are there simple solutions to complex problems like inflation.
But here are a few contenders in my book: the Federal Reserve has kept interest rates far too low for too long; Congress has been spending like crazy since the beginning of the pandemic; the labor market is tight and labor costs are rising; the pandemic has really messed up supply chains and left store shelves bare and made prices for what is left higher; and Russia invaded Ukraine upending the petroleum markets.
Inflation is a thief that steals from families and leaves us poorer.
So how can an individual combat inflation?
Here’s a thought: negotiate everything.
When I make a major purchase, I negotiate. For example, I purchased a wall-mounted fireplace from Ace Hardware last week. I asked an assistant manager how much she could knock off the price. She told me they don’t negotiate prices unless the item is damaged. After jokingly offering to whack it with a hammer, I got to dickering with the store’s top manager and he carved $75 off the purchase price.
Be pleasant but persistent.
With the inflation rate between 7 and 8 , it’s smart to assume what you buy now would cost more later. So, for consumables, things you are certain to use no matter what, look for good prices and buy in bulk.
For example, I recently bought 18 bottles of Arm and Hammer detergent when I saw a good price at Menards. Or I bought a 6-pack of Colgate toothpaste at Sam’s Club when I saw a good price.
I know that no matter what the economy does, I’ll be washing my clothes and brushing my teeth. By buying now and using later, I’m hedging inflation. It’s like buying a 7 bond. It’s not a flashy investment, but it is a pragmatic one.
With labor prices escalating, it may be an appropriate time to consider spending money on that project you have been putting off. For example, I have a plumbing project that I have continually put off, but I know will eventually have to happen.
I got an estimate from my plumber several months ago that is good for six months. I have watched labor rates shoot up since then. So, I gave the green light to the project at the price it was bid at six months ago. Again, it’s like buying a bond paying at the rate of inflation.
I’ll be the first to admit, these aren’t easy undertakings. It requires spending savings now in anticipation of those dollars in your bank account being worth less if they go unspent.
It’s hardly an ideal situation. But the economy is giving few alternatives to staying ahead of inflation.
• Scott Reeder a staff writer for Illinois Times can be reached at firstname.lastname@example.org.