Some quick economic cognitive dissonance of the day

On the one hand, a sober-minded enough story about inflation:

It is a risk Federal Reserve Chairman Ben S. Bernanke highlighted in a speech yesterday, saying that the falling value of the dollar can feed into inflation expectations, and that rapid price escalation, if sustained, “might lead the public to expect higher long-term inflation rates, an expectation that ultimately could become self-confirming.”

For some businesses that already is the reality. Many companies making long-term investments are assuming that prices will rise at a pace well above that of the past 20 years, as they pencil in larger price increases for the supplies they buy and the prices they charge. Consumers are coming to take rapidly escalating food and energy prices for granted. And labor unions are starting to push harder for across-the-board wage increases, though overall wages are still climbing slowly.

U.S. consumers expect prices to rise 7.7 percent in the coming year, according to the Conference Board, a research company. Investors expect inflation over the coming decade to average 3.4 percent based on bond market data analyzed by the Cleveland Fed. That is well above the Fed’s unofficial target of about 2 percent.

On the other hand, there is the photo chosen to accompany this story:

Is it a...doof?

As friend Jess noted, it’s all about the guy on the right going, “Aaaah, whaddaya want ME to do about it?”

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