For his first show after a monthlong summer break, John Oliver chose a topic that’s on everyone’s mind: inflation. Thing is, everyone does not actually understand inflation, because inflation is extremely complex. So, in order to do the segment, Oliver first had to teach his audience Inflation 101.
A current-events comedy show is not the ideal place to break down complex economic concepts, and Oliver struggled with the lesson. He seemed to think repetition was the key to understanding inflation, and so he cited an impressive variety of real-world examples of inflation’s effects — pricey bicycles, the scarcity of creepy frog statues, finicky penguins who don’t want to eat the cheap fish a Japanese aquarium is now forced to buy for them.
Only a fool would turn down the opportunity to watch haughty penguins refuse fish offered to them by beleaguered zookeepers, but the endless explaining was exhausting. And needless, because Oliver at one point summed up inflation quite well in just a few words: “Too much money chasing a limited supply of goods.”
Inflation is a two-headed monster: If consumers suddenly have more money than they usually do, prices can rise. And if there are too few things for consumers to spend their money on, prices can rise. The reason inflation is so bad right now is because we have both of those things happening at the same time, in large part thanks to Covid. The U.S. government injected trillions of dollars into the economy over the past couple of years to prevent a total economic crash, and supply chains have been crippled by the massive disruption caused by lockdowns. The result has been the worst inflation in 40 years. As Oliver pointed out, food prices are up 10.4 percent, electricity is up 14.7 percent, and gasoline is up a ridiculous 59.9 percent.
That is, in very broad strokes, what’s to blame for inflation. So who’s to blame?
“There has been a flurry of finger-pointing, with many tending to place the blame on whatever they were already mad at,” Oliver explained, “with some Democrats blaming corporate greed, Republicans blaming Joe Biden, Biden blaming Putin, and your dog presumably blaming the vacuum cleaner. And here is the interesting thing: Aside from the dog, they’re probably all a little bit right.”
In other words, no one can really say how much effect all those factors (and others) are having on inflation. In fact, economic experts including Federal Reserve Chairman Jerome Powell, whose whole job is to prevent economic disruptions, have admitted that inflation caught them off guard and that they’re not sure what to do to reverse it. In addition, while the Fed can control monetary policy — the too-much-money part of the two-headed monster — it can’t do much about a lack of goods for people to buy, or about events like the Ukraine war that take a sledgehammer to the world’s economy.
What most economists say they do know is that inflation should be back under control… in 12 to 18 months. While Oliver proposed unlikely policy initiatives that could help people most vulnerable to price hikes, he did not miraculously come up with a solution that had eluded the world’s economists. But he did offer one solid piece of advice for coping with high prices.
“It’s probably a good idea,” he said, “to start making your gasoline at home in the morning instead of getting an expensive cup of it on your way to work.”