The federal government’s Bureau of Labor Statistics released new price inflation data today, and the news wasn’t good. According to the BLS, Consumer Price Index (CPI) inflation rose 8.3 percent year over year during August, before seasonal adjustment. That’s the seventeenth month in a row of inflation above the Fed’s arbitrary 2 percent inflation target, and it’s six months in a row of price inflation above 8 percent.

[This article is chapter 1 from Bylund’s new book How to Think about the Economy: A Primer.]

Many years ago, in his “Unscrambling Socialism” (Notes from FEE, November 1964), Leonard Read wrote:

Any adept student of human action knows that it isn’t enough merely to “drop anchor” in today’s sea of socialism, that is, to stop where we are. The U.S. is already playing host to more parasitic socialism than the economy can sustain … [and] there comes a point in time in growth when any parasite will destroy its host.

It may sound like a bad joke, but several central banks actually claim this. On the website of Sweden’s central bank, the Riksbank, you can read it both in English and Swedish. In English, the statement says: “The Riksbank is Sweden’s central bank. We ensure that money retains its value (over time).” The Swedish version translated to English says the same but with the words “over time” added.

It could be a coincidence, but probably not, that Joseph Stiglitz commented on corporate profit margins then the following week Federal Reserve Vice Chair Lael Brainard wrote about Bringing Inflation Down, where she too mentioned the problem with high profit margins.

In her own words, she found that:

Reductions in markups could also make an important contribution to reduced pricing pressures.