Why isn’t inflation a bigger issue?
With all their policy positions, it’s the rare politician that discusses inflation. The last time I remember inflation being an electoral item was during the Carter/Reagan contest of 1980. And I find no evidence of it being discussed very much during any other post-war election.
But as we’ve seen, inflation is a critical determinant of the market’s success during a President’s term. Many candidates may ignore the subject is because it’s been outsourced to the Fed. And the bipartisan term of Maestro Alan Greenspan made central bank policy off-limits in political debates.
But legal matters have been outsourced to the courts, and we still debate those during elections. And B.A.–before Alan–we still shied away from the question.
One reason pols could shy away from inflation is because it’s a “vegetable” item: essential, but not very fun. It doesn’t supply the “red meat” that other hot button issues provide. The other possibility is that they just may not understand what the inflationary implications of their policies are.
Or they may not like the answers.
Douglas R. Tengdin, CFA
Chief Investment Officer
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