In public life, nothing is ever as simple as it seems, so that the apparent national unanimity against inflation bears a second look. Is everybody really that much against it or are some people just going through the motions because the mass media and the society's prestige figures spend so much energy inveighing it?
After months of false starts, once the president indicated he might be serious about cutting the growth rates in the money, that he might really be flirting with an end to inflation, there was a decided grumpiness in certain quarters. In other moments in our history, public figures have been avowed and sincere inflationists. Herbert Hoover was, to name one, but while this isn't the year to advocate inflation, some people like George Meany do combine a pro forma opposition to rising price levels with a refusal to back the government policies most likely to flatten the growth curves.
Even the electorate is more ambiguous on the subject than we are led to believe. Those social tea leaves the public opinion pollsters, tell us that "inflation is the No. 1 issue in this country," but it may also be a very tepid No. 1. If people were truly and deeply concerned, would two-thirds of the nation's voters have stayed away from the polling places last Election Day? No, while people are doubtless worried, many millions of us obviously aren't worried enough to take even the minimal step of stumbling around the corner to pull a lever in a polling place.
Our monochromatic mass media chants that inflation hurts us all, but a lot of us know darn well it hurts some of us more than others. Inflation hurts creditors and helps debtors. The general knowledge of this self-evident fact explains much of the force behind the continuing real estate boom. You don't have to be a double-dome master of business administration with a Coke-bottle eye glass to know that one of the good things in life is to borrow 100-cent dollars on a house mortgage and pay the loan back with 33-cent dollars. The nice people in Washington who print all that money have given you two-thirds of your house and garden for free.
The tens of millions who own real estate in the expectation that inflation will be kind to them are theoretically counter-balanced by other millions, especially older people who live on fixed incomes. But, writes Christopher Jenks, professor of sociology at Harvard, "Social Security is now adjusted almost every year to keep pace with inflation. Even though private pensions have not done equally well, the per-capita income of individuals 65 and over rose 76 percent between 1970 and 1976 while the per-capita income of individuals aged 14 to 64 rose only 51 percent. Since the Consumer Price Index went up 47 percent during these years, individuals 14 to 64 ended up with about the same purchasing power in 1976 as in 1970, while individuals 65 and over increased their purchasing power by a fifth. (For more, see Jenks' "Why Worry About Inflation?" in the Sept.-Oct. issue of Working Papers.)
In sum, a whole big bunch of people have either advanced their standard of living or stayed about equal during the worst of the inflationary years. A lot of them may be worried that, if inflation continues, the future won't, work out as well as the past, and, assuredly, one of the great objections to inflation is the extra element of uncertainty it brings to already uncertain human existence. Thus, even people who profit are unnerved by it.
But how are the same people going to react as it dawns on them that they may be the ones who pay the price for ending inflation or at least taking it off the backs of lenders, the class that has paid the highest price for the lowering dollars?
In California, we now have the variable-interest-rate mortgage, in actuality a mortgage with interest payments which fluctuate according to the ebb and flow of inflation. In a lot of states that kind of mortgage would bump into the usury laws, the moralistic name for price control over money, and already we're hearing from lenders that, unless these laws are repealed, they're not going to make mortgages. The tussle which will ensue -- unless national interest rates dive downward -- will be a disguised fight between deflationists and inflationists. The same kind of fight is likely to break out in other sectors of the economy as various groups and individuals learn it ain't necessarily so, that while inflation is like the rain in that it falls on all of us, it is also like the rain in that it floods some gardens while it makes others bloom.