What’s worse – recession or inflation?

Much is being made (or not, as the case may be) of the present economic “recession.” Apparently we were in a recession in 2001 as well, though I don’t really remember that it affected me that much. Yet, I’m really feeling the economic pinch at the moment. So I asked myself why there was this discrepancy, particularly since I did not lose my job in either case, and I had a sort of epiphany.

Generally, the existence of a recession is based on a combination of job loss numbers and consumer spending (the exact definition actually varies depending on whom you ask).  In some sense these are tied together – greater job losses will usually lead to lower total spending by the populace since a chunk of said populace now has no income.  However, as in the 2001 recession, if you were lucky enough not to lose your job and were not in a line of work that directly depended on the slightly lower spending, you were likely unaffected by the recession, just like yours truly.

As such, I wonder why discussion of current economic woes is focused so heavily in the media on the recession rather than on that more egalitarian of scourges, inflation.  With astronomically high gasoline prices (yes, they’re higher in Europe, but other costs are lower like health care) and rising food prices, inflation is starting to affect just about everyone.  I liken the comparison between recession and inflation to the following analogy:

A recession is a bit like a few cars getting knocked out of a big race, but those who manage to finish can still do so in record time (clear track, sunny day, whatever).  Inflation, on the other hand, is like a wet track or yellow flag – everyone has to go slower.  The problem is that, if we’re not careful, we’re going to come to a screeching halt before long and neither major political party has the slightest idea what the hell they’re doing.  Man, we’re screwed.

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