How Reserve Chairman Sees Inflation
At a recent gathering, I asked the chairman of the Federal Reserve System, G. William Miller, which practices and policies outside government he believes have contributed or could contribute to this inflation. An inadequate level of investment was the only factor he cited.
Sitting next to me were the Carter administration’s chief antitrust and consumer protection officials–James Shenefield of the Justice Department and Michael Pertschuk of the Federal Trade Commission. They surely must have winced to themselves.
Here is the chairman of the Federal Reserve neglecting to mention monopolistic or anti-competitive practices as inflationary factors. Chairman Miller did not mention widespread consumer fraud. There was also no reference in his remarks to the weighty shaping of government inflationary policies by business lobbyists, nor the contribution to the government’s spending by corporations receiving subsidies or doing business with the Pentagon, the General Services Administration and other contracting agencies.
To Mr. Miller’s mind, inflation is overwhelmingly a matter of fiscal, monetary and regulatory policies of the government. Other observers may look deeper–to the play of powerful pressure groups on government policy-making–to find their explanation.
The problem of treating inflation starts with the word itself. To the many business and governmental managers, “inflation” is seen as a value-free word, much like the word “gravity.” Just check the wholesale and retail price index and you’ve got your answer on the inflation rate.
To consumers, however, inflation is laden with more concrete facts. Inflation is, as any proverbial cab driver can tell you, getting less for your money. And when you get less for your money in an economy that has considerable unused capacity and is not in a wage-price inflationary spiral, it is time to look at inflation more through a consumer’s rather than through a banker’s perspective.
So Chairman Miller, let me introduce you to a new 16-page White House publication entitled “A Consumer’s Shopping List of Inflation Fighting Ideas.” It is filled with direct advice to make consumers become astute inflation fighters as they go about spending their money.
At the back of the publication is a list of consumer, health and environmental action groups which are advocating corporate and governmental reforms which will raise the value of the dollar and the safety of what it buys. (For a free copy, write to Consumer Information Center, Pueblo, Colo. 81009).
A new wave of consumer advice articles and books focuses on buying less and raising your standards of living at the same time by becoming healthier, thriftier and wiser. One such book is called “It’s in Your Power” by Stuart Diamond and Paul S. Lorris ($8.95, Rawson Publishers, 630 Third Ave., New York, N.Y. 10017).
Diamond, a Newsday reporter, and Lorris, an energy consultant associated with the Brookhaven National Laboratory, showed graphically how you can save large sums in small ways by learning how to use less electricity and fuel. Cutting down on waste is the main theme, though the various self-help suggestions and the techniques make the process fun.
Applying consumer know-how to consumer spending makes for a heightened consciousness about structural abuses like energy monopolies, white-collar crimes and assorted marketplace ripoffs in the billions of dollars which have become a way of behaving for industries and professions. Acquiring consumer skills also sensitizes people to the way government is manipulated by special economic interest groups to enrich them at the expense of consumers and taxpayers.
So the next time you get fleeced, think about this question: How much time do you spend earning enough money to buy a car or food for the family compared to the time spent learning how to buy these products? A few hours a year learning how to buy can produce far greater savings per hour than what you’re making at the plant or office.
Who knows, pretty soon you may find out about the secretive and very powerful Federal Reserve and ask Mr. Miller what effect it has on interest rates and your pocketbook.