Inflation rate in America is the highest in decades, but these five cities are hit the hardest
Recently, as my wife and I were on a morning stroll, she remarked on how peculiar inflation is. She saw that certain costs had skyrocketed, while others have scarcely changed.
The price of a carton of eggs has increased by 33 percent over the past year, but the price of a pound of tomatoes has remained same. The price of airline tickets has skyrocketed, yet the cabin we rented for our recent holiday was several hundred dollars cheaper than in the past. Our power bill is skyrocketing, yet her personal care items and my son’s new sneakers cost roughly the same (or less) as they did previously.
It is evident that pricing is a difficult endeavor, and not simply because value is subjective. It is impossible for a single individual to comprehend, much less calculate, the complexity of an economy’s production and distribution expenses.
While the fundamental economics of inflation are often straightforward—increase the money supply and, all else being equal, money becomes less valuable—the intricacies of inflation can be complicated and difficult to comprehend because economies are complex and difficult to comprehend.
This is evident not just by the fact that some goods and services are more affected by inflation than others. It is also evident by the fact that inflation is growing more rapidly in certain regions than others.
Recent Labor Department figures indicate that inflation fell in July (annualized rate of 8.5%), although it remains high, especially in specific regions. According to a recent analysis by WalletHub, prices in many U.S. cities are 10 percent higher than they were a year ago.
The five cities where inflation is the highest, according to the most recent Consumer Price Index (CPI) statistics, are listed below.
1. Anchorage, Alaska: 12.4%
2. Phoenix, Arizona: 12.3%
3. Atlanta, Georgia: 11.5%
4. Tampa Bay, Florida: 11.2%
10.6% in Baltimore, Maryland
Largely an Inflationary Past?
Wednesday’s announcement of the government’s inflation data prompted many to speculate that the US economy may be reaching an inflation “tipping point.” This is likely accurate, but it is by no means certain.
Inflation has afflicted (and sometimes destroyed) civilizations as diverse as the Roman Empire, 20th-century China, and others.
“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments,” the Nobel Prize-winning economist F.A. Hayek once observed.
This is why Hayek believed it necessary to remove the control of money from the government. Historiography demonstrates that individuals in authority spend beyond their means, and that these debts eventually come due. When this occurs, rulers resort to money printing or other types of currency debasement, which reduces the currency’s value (sometimes slowly, sometimes rapidly).
The United States is a far way from the hyperinflation that afflicted Weimar Germany — where one US dollar was worth a trillion marks in 1923 — and still haunts Venezuela, but inflation is a killer of patients. Inflation erodes retirement funds, pensions, salaries, and savings over time, and as my colleague Peter Jacobsen highlighted last year, working-class and lower-income Americans are the least equipped to shield themselves from inflation and are most likely to feel the difference.
The majority of Americans, especially those in Anchorage, Phoenix, Atlanta, Tampa, and Baltimore, do not need an economist or politician to explain the dangers of inflation.
They require solid money, but it is evident that they will never have it as long as the government controls it.