Doug, then there is the whole marketing angle and the manipulation of prices and production in the oil industry. Let's not forget that you can buy, a small future contract for 10,000 gallons of no-lead for about 55 cents a gallon or so, you might even be able to get it cheaper.
Tom L.
Ellen Frank wrote:
> lbo-talk at lists.panix.com writes:
>
> Doug wrote:
> >
> >Does it really? I thought there was a lot of recent research showing
> >essentially no relation between inflation and growth if you leave out
> >the rare instances of hyperinflation (which is usually a symptom of a
> >society in collapse). As I recall, Bob Pollin was citing this against
> >the austerity crowd. But it cuts both ways. Sure, tight money and
> >tight fiscal policy - conventional anti-inflation weapons - stifle
> >growth. But that aside, what demonstrable relation is there between
> >inflation and growth over the long term?
> A problem I have with some of the anti-NAIRU literature is that it has
> thrown the proverbial baby out in its efforts to critique the
> natural rate of unemployment idea. You can dispute the inotion
> that unemployment is "natural" without wholesale rejection of any
> connection
> between growth/ low unemployment and inflation.
> Obviously, a one-to-one relationship between growth// inflation is
> difficult to establish, since so much
> depends on the wage-setting and price-setting
> institutions in a country, but its a pretty plausible relationship, all
> in all.
> >
> >Also, some of the worst real wage declines in the U.S. were during
> >the high inflation years of the late 1970s.
> The worst sustained real wage declines in the US came during the 1980s and
> 1990s, though manufacturing wages began to decline in 1973.
> Wages didn't decline in Europe's inflation, though. Inflation is
> a mixed-bag for wage-earners, and
> so much depends on how wages are set. It's great though for
> the indebted middle-class, because historically it lowers real
> interest rates.
> > Some of the best recent
> >real wage gains have come during the last two years, a period of low
> >(and falling) inflation.
> Yes, this is true, but how long can this last? The fact that wages
> are rising without inflation (indeed with disinflation)
> is due to the weakness of 1970s style wage-setting institutions,
> like collective bargaining units and contractual raises in bureaucratic
> workplaces. Workers pay a price for this - lower job security,
> less control over hours, worsened health and safety. Workers
> are not, today, getting a dime extra without putting out
> more.
> >Finally, I'm tempted to make the argument that inflation is
> >psychologically destabilizing and leads people to a longing for order
> >- for authoritarian politics, in other words. Thatcher, Reagan,
> >Fujimori....
> I think leftists should support inflation, if only for the wealth-
> redistributing properties. Frankly, I don't know how I'll ever
> pay off my debts if the inflation rate stays near zero. There's
> no evidence that inflation is politically destabilizing in the sense
> you seem to imply -- save for hyper-inflation, which is
> always a manifestation, not a cause, of political instability. Several
> years
> back, though, Jerry Epstein at UMass wrote a paper hypothesizing
> that the US 1970s inflation, to the extent that it reflected
> irresoluble conflicts over wages and productivity and the power
> of strong unions to press for wage gains, caused finance
> and mfg capital to close ranks behind Volcker.
>
> Ellen
>
> >