INFLATION WATCH -- First-Class postal rates will
jump to 39¢.
In 1963 a First-Class postage stamp was 5¢. By 1974 it was 10¢. Just seven years later it was 20¢. In 1991 it was 29¢. And now it goes to 39¢.
All this while there have been massive productivity advances in the postal industry. These productivity increases -- without inflation -- should have driven the cost of a First-Class stamp well below a nickel. It tells you all you need to know about the mismanagement of the money supply that instead of paying less than a dollar for a sheet of 20 stamp you'll soon pay almost $8.
Check out this chart:
In 1885 the price of a stamp was 2¢. In 1932 the price of a stamp was .. still 2¢. Everywhere and always price inflation is a monetary phenomena, i.e. it's a Federal Reserve problem. You can bank on the general truth of that statement. If you've got inflation -- as we have -- then you've got a monetary problem, a Federal Reserve problem. The massive and ongoing inflation we have experienced decade after decade since the 1960's is a bi-partisan outrage which cannot be justified either morally or scientifically. And it's time for people to say so. The economist profession is an embarrassment to science and among its many embarrassments is its AWOL status on the problem of inflation -- which is really part of the much bigger embarrassment which is the utter collapse of macroeconomics as a sound and healthy branch of economic science. The death of macroeconomics came with the death of Keynes in the late 60's and early 70's, and all that we have seen since are new ways to attempt the squaring of the same old circle. Which leaves macroeconomics as dead as ever. The death of macroeconomics is the principle reason that Alan Greenspan and the Fed board can get away with all the mumbo-jumbo in their official statements and before Congress. Remember the Y2K mumbo-jumbo of 1999 -- during the stock market bubble? Remember the Fed's "deflation" scare of last year? The deflation blather played perfectly as interference for a loose money policy in the runup to the Bush re-election. But where was the economics profession? The death of macroeconomics left economists impotent and on the sidelines, completely incompetent to say anything of use on the matter. As a result Greenspan and the Fed were free to pump up the currency -- and inflation -- in the service of the re-election of the President.
And so now the price of a stamp must rise. Once again.
Posted by Greg Ransom
