Chapter 10

What struck me as most interesting (and frightening) was how politics relates to inflation. Throughout the year we have learned that politics plays a pretty major role in our economy but I never considered how it would impact the nitty gritty such as inflation. It's strange how easily our nation will fall for the brief beginning period of an "out of control inflation party." We think that we have stumbled into economic growth when in actuality we are heading downhill fast. I wonder if our momentary calm before the storm is due to ignorance, lack of information or simply our human nature to spend more money when we have it. It's scary to know that politicians take advantage of this false security in order to become re-elected. However it is reassuring to know that people like Paul Volcker (a former chair of the Fed) acknowledge the dangers of breaking the independence between the Federal Reserves and the executive branch.