{"id":280,"date":"2011-03-30T14:12:03","date_gmt":"2011-03-30T18:12:03","guid":{"rendered":"http:\/\/www.patheos.com\/community\/slacktivist\/?p=280"},"modified":"2011-03-30T14:12:03","modified_gmt":"2011-03-30T18:12:03","slug":"the-three-step-test-for-inflation","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/slacktivist\/2011\/03\/30\/the-three-step-test-for-inflation\/","title":{"rendered":"The three-step test for inflation"},"content":{"rendered":"\n<\/head>

David Leonhardt writes about the irrational inflation fears of the Federal Reserve and the enormous human toll of policies driven by such fears. The New York Times<\/em> headlined his piece \u201cAs Economy Sputters, a Timid Fed<\/a>,\u201d but it may as well have been titled, \u201cWhy Do Federal Reserve Officials Hate Working People?<\/a>\u201d<\/p>\n

The recovery looks uncertain, and the job market remains weak. Even if job growth were to accelerate sharply in coming months, the economy would be years away from so-called full employment. But never mind that, the hawks say \u2014 rampant inflation is just around the corner.<\/p><\/blockquote>\n

So let\u2019s ask this directly: Should we be worried about inflation?<\/p>\n

Conveniently, there\u2019s a simple three-step test to find out if inflation worries are founded or unfounded.<\/p>\n

Step 1:<\/strong> March into your boss\u2019 office. Don\u2019t bother making an appointment, just open the door, walk in and tell him to listen up because you\u2019re in charge here.<\/p>\n

Step 2:<\/strong> Inform your boss of the substantial amount of the raise you will be receiving and that this figure is not optional.<\/p>\n

Step 3:<\/strong> When your boss blinks in shock at the large figure you just quoted, remind your boss that you have plenty of options. Remind him that you could easily find another, better-paying job by late afternoon. Remind him that in this job market your boss knows very well that he would be hard-pressed to find anyone who could possibly replace you \u2014 that you have all the power in this negotiation and he has no choice but to do what you demand.<\/p>\n

Now, please note that I don\u2019t think it would be prudent to attempt this simple test at this time. But the convenient thing about this test is that you don\u2019t even have to actually do<\/em> any of these steps to determine whether or not worries about inflation have any merit at all.<\/p>\n

All you need to do is think<\/em> about doing it.<\/p>\n

Perhaps your boss, your workplace, your industry and the economy it operates in are different than mine, but it would seem unwise to try any of the above steps where I work. I don\u2019t need to ask for a raise to know what they\u2019d say.<\/p>\n

The point of this test \u2014 or of just thinking about trying the three steps of this test \u2014 is to gauge how much leverage you have, as an employee, to push wages upward. That\u2019s a function of the number and quality of other options available to you and of the number and quality of other options available to your employer.<\/p>\n

When things are clicking along at full employment and companies are desperate to fill multiple job vacancies then you can feel secure in giving your boss an ultimatum \u2014 if you don\u2019t pay me more, I\u2019ll go work for someone who will. But when unemployment is high, you and your boss both know that you\u2019re not going anywhere \u2014 unless you get laid off, which you\u2019re desperate to avoid because you realize you might never find another job. When unemployment is high, you\u2019re not going to make waves by demanding or begging for or even mentioning a raise.<\/p>\n

If you feel like you have all the leverage and that you could demand a raise, then fears about inflation might be valid.<\/p>\n

If you feel like you have no leverage and that talk of raises would be reckless and self-destructive, then concerns about inflation make no sense at all.<\/p>\n

With unemployment still hovering around 9 percent and nearly 14 million Americans still seeking work without being able to find any, it\u2019s foolish to be worrying about inflation. And it\u2019s cruel. Because the fools shaping policy based on fears of phantom inflation are acting \u2014 deliberately<\/em> acting \u2014 to ensure that unemployment remains high so that employees do not come to behave like the worker in our little three-step experiment above.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

David Leonhardt writes about the irrational inflation fears of the Federal Reserve and the enormous human toll of policies driven by such fears. The New York Times headlined his piece \u201cAs Economy Sputters, a Timid Fed,\u201d but it may as well have been titled, \u201cWhy Do Federal Reserve Officials Hate Working People?\u201d The recovery looks […]<\/p>\n","protected":false},"author":111,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[26,36],"class_list":["post-280","post","type-post","status-publish","format-standard","hentry","category-mammon","tag-money","tag-work"],"yoast_head":"\nThe three-step test for inflation<\/title>\n<meta name=\"description\" content=\"David Leonhardt writes about the irrational inflation fears of the Federal Reserve and the enormous human toll of policies driven by such fears. 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A former managing editor of Prism magazine, Fred worked in the parachurch nonprofit world for a decade and then for a decade in the newspaper biz. He began blogging in 2002. In 2003 he began writing a review of the best-selling Left Behind series. Eight years later he still hasn\u2019t finished reviewing the second book of that series and the experience has left him a broken shell of a man. Fred knows the difference between the possessive \u201cits\u201d and the contraction \u201cit\u2019s,\u201d and he is acutely bothered when others mistakenly confuse the two, yet he himself just kind of instinctively types the apostrophe whether or not it belongs there. Some feel this is his greatest hypocrisy, but those who know him better know better. He\u2019s guilty of much greater hypocrisies. Jesus loves Fred far more than Fred loves Jesus, but he at least has the decency to recognize the unfairness of that lopsided relationship and he has long wished that he were better at maybe kind of sort of doing something more to correct that some day. A Baptist, an amateur, a Gen-Xer, a Gemini and a Mets fan, Fred lives in Southeastern Pennsylvania with his wife and two teenage daughters. You can reach him via email at slacktivist at hotmail dot com.\",\"url\":\"https:\/\/www.patheos.com\/blogs\/slacktivist\/author\/fredclark\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The three-step test for inflation","description":"David Leonhardt writes about the irrational inflation fears of the Federal Reserve and the enormous human toll of policies driven by such fears. 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A former managing editor of Prism magazine, Fred worked in the parachurch nonprofit world for a decade and then for a decade in the newspaper biz. He began blogging in 2002. In 2003 he began writing a review of the best-selling Left Behind series. Eight years later he still hasn\u2019t finished reviewing the second book of that series and the experience has left him a broken shell of a man. Fred knows the difference between the possessive \u201cits\u201d and the contraction \u201cit\u2019s,\u201d and he is acutely bothered when others mistakenly confuse the two, yet he himself just kind of instinctively types the apostrophe whether or not it belongs there. Some feel this is his greatest hypocrisy, but those who know him better know better. He\u2019s guilty of much greater hypocrisies. Jesus loves Fred far more than Fred loves Jesus, but he at least has the decency to recognize the unfairness of that lopsided relationship and he has long wished that he were better at maybe kind of sort of doing something more to correct that some day. A Baptist, an amateur, a Gen-Xer, a Gemini and a Mets fan, Fred lives in Southeastern Pennsylvania with his wife and two teenage daughters. 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