A few thoughts from John Nalivka: Inflation and a repeat of history

Inflation is a much-discussed topic today – by the American people and by politicians. The cost of living is a daily experience. While I don't need the government to tell me how much the cost of living has risen, the latest data for July is now in, and frankly, I wonder if the officially reported inflation numbers match what we are experiencing. But beyond that, the anti-inflation measures presented by Washington, DC are more concerning.

On July 5, 1971, I was with a group of students at the White House to witness President Richard Nixon sign the 26th Amendment.^th Amendment to the U.S. Constitution lowering the voting age from 21 to 18. One month later, on August 15, and 53 years ago, President Nixon announced that he would “order a freeze on all prices and wages throughout the United States.”

Those of us who lived through the hyperinflationary period of the 1980s should ask ourselves whether the government intends to repeat that disastrous economic period in U.S. history. Nixon's announcement of a fixed price regulated by a wage and price board 53 years ago resulted in rapidly rising inflation. Core inflation, which excludes food and energy, averaged 12% in 1980, 10% in 1981 and 7% in 1982.

Core inflation was forecast to be 3.2% year-over-year in July 2024. At the same time, the Consumer Price Index for food was reported to be up 1% year-over-year. That doesn't sound so bad until we look at the rest of the story. The Consumer Price Index for food in July 2023 was 4% higher than last year, compared to July 2022, which saw a 13% year-over-year increase! Yes, it's no secret that food prices have risen sharply, and politically, a price freeze might be a popular idea in an election year. The reality is that this would be as disastrous as the latter half of the 1970s and 1980s! What seems like a quick fix merely adds fuel to the fire.

Demand for beef is currently strong, a notable goal that the industry has worked hard to achieve since 2015. As a result, consumers continue to purchase high-quality, safe beef products at record prices. Imposing government price controls or supermarket prices would be negative and would most likely take us back to the late 1970s and 1980s.