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Thursday, July 24, 2014

Predictions that don't pan out.

A friend posted (on her Facebook page) two pages from Time magazine in 1953, because of the Kraft Credit Union ad.  On the facing page was an essay ("Asking for More Inflation") by Henry Hazlitt, an economist who has had quite a following.

I'm finding myself amused by the way the essay begins: "In the issue of March 2, I wrote here:  'We shall soon learn whether the American people really want to halt inflation, and whether they are willing to pay the price.' "

Being the kind of guy I am, I looked up the numbers. From March 1952 to March, 1953, the rate of inflation as measured by the Consumer Price Index was, um, 1.4%. For subsequent months:

4/52-4/53: 0..8%
5/53-5/53: 1.1%
6/52-6/53: 1.1%
7/52-7/53: 0.4%
8/52-8/53: 0.7%
9/52-9/53: 0.8%
10/52-10/53: 1.1%
11/52-11/53: 0.7%
12/52-12/53: 0.8%

It didn't get any faster (in fact it was slower) in 1954 and 1955...

Uh...there was an inflation problem?
(Hazlitt was a crank.)


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