Four out of five Canadians say they have no confidence in the U.S. under President Donald Trump’s leadership, with existing tensions expected to be exacerbated by latest tariffs
The focus on petrol prices and inflation are, to me, also curious aspects of American culture.
For one, one of the major problems in the US economy is that petrol prices are too low. In general, to optimize productivity one should aim to subsidize those activities that generate positive externalities, and tax those that generate negative externalities. The use of fossil fuels - a heavily polluting activity - should then be adequately taxed. No top-tier economy has petrol prices as low as in the US, they are closer to 10 USD a gallon (in freedom units). The undertaxation of fossil fuels has also led to greater sensitivity to price fluctuations on the global markets.
Inflation is a curious fixation since the US, unlike many other countries, never experienced hyperinflation. So why the obsession? I suspect one factor might be that the US has few collective wage negotiations, whereas here inflation is more or less automatically priced into wages. What then happens is that workers who stay in their job have their wages steadily eroded (i.e., their employer simply pays them a lower real wage over time), but then if they switch jobs, they attribute the wage increase to their career advancement rather than inflation, which increases the price of labour just as it does the price of goods (if due to money losing value).
The focus on petrol prices and inflation are, to me, also curious aspects of American culture.
For one, one of the major problems in the US economy is that petrol prices are too low. In general, to optimize productivity one should aim to subsidize those activities that generate positive externalities, and tax those that generate negative externalities. The use of fossil fuels - a heavily polluting activity - should then be adequately taxed. No top-tier economy has petrol prices as low as in the US, they are closer to 10 USD a gallon (in freedom units). The undertaxation of fossil fuels has also led to greater sensitivity to price fluctuations on the global markets.
Inflation is a curious fixation since the US, unlike many other countries, never experienced hyperinflation. So why the obsession? I suspect one factor might be that the US has few collective wage negotiations, whereas here inflation is more or less automatically priced into wages. What then happens is that workers who stay in their job have their wages steadily eroded (i.e., their employer simply pays them a lower real wage over time), but then if they switch jobs, they attribute the wage increase to their career advancement rather than inflation, which increases the price of labour just as it does the price of goods (if due to money losing value).