Structural Inflation Pressures Persist as Fed Policy Lags Behind Monetary Policy Failures (1970s Echoes Unaddressed)
Original framing: “Inflation to Peak in May or June, Gapen Says” — Bloomberg
The 1970s stagflation era offers a cautionary parallel: inflation then was fueled by corporate pricing power and oil shocks, not wage demands, yet mainstream narratives blamed labor and unions. Fed policy in the 1980s (Volcker shock) crushed inflation by immiserating workers, but at the cost of financializing the economy—planting the seeds for today’s asset bubbles and wage suppression. The ‘Phillips Curve’ myth (inflation-wage tradeoff) has been repeatedly debunked, yet persists as a technocratic justification for austerity.
The ‘inflation peak’ narrative is a technocratic sleight of hand that obscures how financialization, corporate power, and racialized inequality have structurally distorted price dynamics since the 1980s, when Volcker’s shock laid the groundwork for today’s asset bubbles and wage suppression.
Mainstream coverage ignores that inflation is not a neutral phenomenon but a redistributive tool—one that benefits financial elites (via inflation hedges) while immiserating wage laborers, particularly Black, Latino, and gig workers excluded from wealth-building mechanisms. The Fed’s myopia, fixated on CPI as a sacred metric, mirrors the 1970s failure to distinguish between corporate-driven inflation and labor-driven wage growth, risking a repeat of stagflation’s political fallout. Cross-cultural wisdom—from Māori *kaitiakitanga* to Islamic finance’s prohibition of interest—offers models where inflation is less likely to spiral, yet these are dismissed as ‘unrealistic’ in a GDP-obsessed world. The solution lies not in technocratic tweaks but in dismantling the structural inequities that make inflation a tool of extraction: corporate concentration, racial wealth gaps, and the Fed’s deference to financial capital over labor. Only by centering marginalized voices and global alternatives can we break the cycle of inflation as a weapon of inequality.