Saturday, May 14, 2011

Paul Krugman on Inflation in Perspective

Over at his blog, Paul Krugman has a brilliant post on inflation. It is interesting how there is this huge disconnect between some people's stated concerns and actual reality.

Of course, you have to empathize with people who are feeling pain at the gas pump right now. But maybe it is time to trade in your SUV (unless you really need it) for a more fuel efficient car. When gas prices fall again, people have a tendency to revert to their old behaviors as if the price of gas were not really volatile and subject to unpredictable increases. What people need to do is think longer term, like Mayor Wamaru did when he built a high seawall to protect the town of Fudai. Just because the waves are not very high today, doesn't mean that you should assume they won't be high tomorrow.

No comments:

Post a Comment