Asked • 05/05/19

Can absence of inflation be accounted for by a reconfigured class structure?

A previous and oft-heard question asked why no inflation results from the Fed pumping money into the economy.Are we simply seeing a methodical wage suppression, thus no official "inflation," while prices soar in certain sectors dominated by "shareholders," non-wage income, and the "one-percent" or whomever? The money moves first into the financial industry, where actual production investment is less attractive. It seems that as long as no money gets locked into "sticky" labor contracts, the Fed can pump away and the results are not deemed "inflation." The money does not cycle up in wages or wage-earner goods.In other areas, however, *we do see soaring prices*: art, luxury goods, high-end urban real estate, philanthropic gestures, political campaign funding, ivy educations, high-tech medicine, hedge fund fees, dividend payouts, tax-avoidance cash hoards, stock bubbles, etc.Can the absence of official "inflation" be explained in large part by the "disaggregation" of labor, middle-class debt, and a new class configuration since the late 1970s? More like a "redistribution" or even a "customizing" of inflation.

1 Expert Answer

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Jason P. answered • 05/08/19

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