Jim Jubak on Inflation

Jim Jubak has just written a long article on inflation at MSN.

The Worst Case Is Not About Us

Admit that even if you have a hammer not every problem is a nail. If energy costs are the major culprit in increasing inflation and in worries about future inflation, then raising interest rates seems a strange way to fight energy-produced inflation. To reduce energy prices by hiking interest rates you have to raise them high enough to slow growth across the entire economy. Wouldn't it be better to try to reduce energy demand -- which would reduce energy prices -- by using programs that increase the efficiency of energy use in the economy? That way we might get lower inflation and economic growth, too.

Of course, I can rant on this page all that I want -- so can you from any soapbox you can commandeer -- and the Federal Reserve doesn't have to do a thing or even listen. These bankers don't stand for election. They're appointed for 14-year terms. They're never accountable to voters. For that matter, they aren't even accountable to the people we do elect.

What we've done is put some of the most important decisions about how our country is run in the hands of officials over whom we have no control.

It's a lousy way to run a democracy.

-Jim Jubak