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Inflation? You'd Better Believe It!

by Mark Walker
I do not like the idea that a city can place a retroactive tax on ANYTHING, anytime. It could just as well have been 20 bucks or a hundred.
Fred Cederholm's column, "Thinking Inflation," reminded me of a kind of funny inflation anecdote from this last week.

Safeway puts out its sale circular every week on Wednesday. Being a disabled veteran on a fixed income, I check it religiously.

About six weeks ago I was in Safeway and the manager and a couple other guys were talking at the milk case and I have to admit I sort of lost it and complained about pints of milk going from $0.59 to .79 to .99, and then to $1.19 in less than two months, while a gallon of Dairy Glen milk was still $1.98.

I was taught not to, and still hold it a sin to, throw away food. I buy a gallon of milk, and—as with the gallon that is a week past usable in my refrigerator right now—often use only a quarter cup before it goes bad, I use it mostly for cooking. But, I will not pay $1.19 for a pint when a gallon is only a buck ninety eight. Buying by the pint costs $9.52 a gallon, so buying a whole gallon I will not use—well, this triggers so much cognitive dissonance in me that I finally let the manager have a verbal dose of my angst.

Well, the message must have gotten through. The week before last, milk finally moved off the $1.98 price and went to $2.29; and then, on last Wednesday, it went "on sale" at 2 for $5. This is where the funny part comes in: when milk goes straight from $2.29 to being on sale for $2.50, you have to wonder what it will be when if goes off sale price. They have not told us yet; we will find out on Wednesday.

This complements the letter I got from the Bonneville Power Authority last week. They generate electricity from 31 dams and 2 nukes in the Columbia River basin, and by law must sell at cost.

They had an ancient system of deals and discounts that they gave to city power utilities and commercial customers, but some lawyers saw a chance to sue and make a bundle, so the upshot is that the entire Pacific Northwest is now informed of electricity increases of about 13-25%—13.2% here in Medford, Oregon, as we are customers of Pacificorp. And that had nothing to do with the cost of energy, but the contractual pricing arrangements of a federal agency. Just to rub salt in the wounds, the new electric bill had a retroactive "city franchise fee" increase on the bill. It was a just buck, but still, I do not like the idea that a city can place a retroactive tax on ANYTHING, anytime. It could just as well have been 20 bucks or a hundred.

In 2005, I moved here to Oregon and rented an apartment. Buying is out of the question, since even a used mobile home outside the city limits is a quarter mil to start. I was in that apartment for 12 months and was handed a 15% rent increase, even though I was an ideal and quiet tenant. I moved here to this second apartment in June of 2006. My landlord told me two weeks ago that rents will go up 15% because school taxes went way up, and water bills went way up too—more than $3000 a month for the complex, he said. There are about 75 units in the complex. I cannot afford the $700 I paid last year because gasoline and food have eaten the rent budget. I need a rent decrease and cannot pay increased rent, so I gave notice and will be living in my truck as of August 1 because I have not found adequate housing that I can afford. In fact, even at $800 this apartment is a bargain now. Unfortunately, the COLA on a vet's disability is the same as social security, 3.1% last year effective January.

I've slipped from middle class two years ago into poverty now. Yet I am assured I am the crazy one, because there is virtually no inflation; I must be on drugs or something.
Naturally the CPI does not track housing costs, neither home prices nor rents. Instead it uses this very fuzzy plug-number math to come up with owners' implied rents, and they use it to hold down the CPI, and thus my COLA's, and I've slipped from middle class two years ago into poverty now. Yet I am assured I am the crazy one, because there is virtually no inflation; I must be on drugs or something.

Well, in fact I am planning to leave the USA till it collapses and then starts to WORK again to put our once great country back together. History teaches that when governments lie, especially about things that are patently and obviously untrue, it is time to seek asylum elsewhere till it is over. Einstein did, and many others in the 1930's saw the handwriting on the walls of the Reich.




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This story was published on June 20, 2007.