Yglesias posits (rightly) that the main problem with inflation is that nobody who makes political decisions knows what real inflation is.

Money quote:

Now a fancy-pants economics blogger can tell you that the most important price in the economy is the price of labor and the price of labor is equal to workers’ incomes, so a general increase in the nominal price level is necessarily a general increase in nominal incomes. But nobody seems to believe that. Instead people are convinced that gasoline and milk are the main prices in the economy, and that a general increase in the nominal price level is necessarily a general decline in real incomes. Worse, oodles of media coverage have gotten people confused between the monetary concept of a general price level and the lifestyle concept of a “cost of living.” The cost of living is massively impacted by real scarcities.

I think that Yglesias is basically right here.

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