Categorized | Commentary/Editorial

Governor Palin’s Inflation Warning in 2010 Looks Increasingly Prophetic

Back in November 2010 Governor Palin delivered a speech in which she warned that Bernanke’s "easy money" policy at the Fed were resulting in rising prices and, if left unchecked, had the potential to cause Jimmy Carter style inflation, complete with Carteresque terms like "stagflation" and the "misery index" that refugees from the 1970s remember all too well. Shortly after Governor Palin’s speech an intellectually lazy Wall Street Journal reporter, Sudeep Reddy, dismissed Governor Palin’s concerns and assured us that inflation was no problem, nor was it likely to be in the foreseeable future, he averred.  This prompted a classic "boom, taste my nightstick" response from Governor Palin that no doubt left a mark on the hapless Reddy:

Ever since 2008, people seem inordinately interested in my reading habits. Among various newspapers, magazines, and local Alaskan papers, I read the Wall Street Journal.

So, imagine my dismay when I read an article by Sudeep Reddy in today’s Wall Street Journal criticizing the fact that I mentioned inflation in my comments about QE2 in a speech this morning before a trade-association. Here’s what I said: “everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher.”

Mr. Reddy takes aim at this. He writes: “Grocery prices haven’t risen all that significantly, in fact.” Really? That’s odd, because just last Thursday, November 4, I read an article in Mr. Reddy’s own Wall Street Journal titled “Food Sellers Grit Teeth, Raise Prices: Packagers and Supermarkets Pressured to Pass Along Rising Costs, Even as Consumers Pinch Pennies.”

The article noted that “an inflationary tide is beginning to ripple through America’s supermarkets and restaurants…Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months.”

Now I realize I’m just a former governor and current housewife from Alaska, but even humble folks like me can read the newspaper. I’m surprised a prestigious reporter for the Wall Street Journal doesn’t.

- Sarah Palin

In the midst of this rather one-sided exchange between Governor Palin and the overmatched Reddy, Paul Gigot, the editorial page editor of the Wall Street Journal, noted that Governor Palin was correct, and was in fact "leading the pack" on monetary policy.

A few months later, the New York Post suggested Governor Palin’s prescience on the issue made her at least as qualified as those currently at the Fed. Since then, there have been sporadic reports of rising inflation in the media but they have not kept up with the very real pain citizens have been experiencing at the grocery stores, the malls, and, of course, the gas pump.  I’ve discussed the disconnect between the real inflation people are experiencing at the cash register and the relatively benign "official" data being reported by the government in several posts, including this one. Why is this relevant today?  Take it away, Terry Keenan:

Remember the Misery Index? Veteran Democrats do, and so do the president’s  re-election operatives in Chicago. The Misery Index is the sum of the  unemployment and inflation rates, and it’s what did in Jimmy Carter in 1980 as  runaway inflation compounded an already bleak economic picture.

On the face of it, the government measure of consumer prices, the CPI, is  just mildly alarming — with the government estimating prices to be rising at a  3.1 percent annual rate.

But as anyone who pays the bills or does the household grocery shopping  knows, a government-reported 3.1 percent inflation rate is laughably low. Bought  cereal or mac and cheese for the kids lately? If so, you’re aware of the near  double-digit increase in prices in the supermarket aisles.

So what is the true inflation rate?

Fortunately, the folks at the American Institute of Economic Research have  resurrected the idea. Their Everyday Price Index (EPI) strips away the cost of  big-ticket items, like homes and cars, and looks at the cost of things that  consumers encounter on a daily or monthly basis, such as groceries, prescription  medicine, and telephone and cable bills. By that measure, the Everyday Price  Index shows inflation galloping ahead at an 8.1 percent annual rate, a reading  that would put the current Misery Index at a Carter-like 16.4 percent — not a  good recipe for re-election.

To be sure, as I’ve noted before, a completely accurate measure of inflation has always been elusive and remains so.  However, as anyone who shops will tell you, the above EPI rate of 8.1% is far closer to reality than the "laughably low" 3.1% being reported by the Obama Administration.  In short, Governor Palin’s warning of the perils of bad monetary and fiscal policy in 2010 was prophetic.  If current trends continue, inflation and the misery index will once again become part of the national lexicon, and this won’t inure to Obama’s benefit. Unless Republicans give him a pass on this issue too, that is.

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  • HuntingMoose


    did I say 10 steps ahead of us and smartest in the room?


    don’t worry. her 8 years will come. just be patient.

  • nkthgreek

    Hey, Ben Bernanke, who you gonna call?

    • Exgunman

      If he can figure it out, he now has a twitter acct…………………………………..

  • Reynolds88

    Interestingly my high school friend Roger Lowenstein wrote an article for Atlantic praising Ben Bernanke "who sees no evidence of inflation" and Roger continues as barrister for the defense of Bernanke’s courageous struggle as chairman of the Fed.

    However, Roger lost me when he mentions Paul Krugman (the liberal columnist who accused Sarah Palin of a role in the Tucson murders, who also was a paid consultant ($50,000) to Enron before he got his NYT OP-ED page) as the leader of liberal pushback on Bernanke.  The NYT has even instituted a special rule by their ombudsman to prevent editors (the Krugman rule) with no integrity from writing without adherence to the facts

    Thus, even the learned economics writers (who are predominantly liberal) cannot write an honest article about the Fed, without bowing to vile smear merchants like Krugman and thus they lose credibility on their other observations. 

    Anyway, Sarah Palin is a smart cookie and in this field (of economics) I am not an expert but I do read with comprehension and discard as questionable articles even from my friends when they reference persons of despicable integrity and tilt the stories to please their colleagues at magazines where hideous cover pics of McCain and blood lust stories of innocent politicians are their day-to-day normal stories. 

    BTW, thanks for the reminder of common-sense conservatism (Sarah Palin)

  • carmtom13

    Governor Palin was 100% right. The real inflation number that the BHO administration is not telling the American people is about 8%. This is a smart political savvy constitutional conservative woman.
    Governor Palin the country needs you NOW!!!

  • ramorywebb

    Over a trillion dolars has been printed and floated out to the world in its " easing" designated by "QE".

    Remember the stories of Germans going with wheelbarrows of currency to buy bread and milk? Perhaps this is a good time for a trip to TrueValue. 

  • friskyness

    anytime, anywhere…………………..

  • Lennart Bilén

    Here is the deal. The housing bubble has burst. That lowered inflation.
    If house prices dorp 50% that would halve the part of the cost of living that is the housing part.
    If husing is 20% of the overall cost of living that means inflation is now 10% lower than before.
    If house prices keep dropping we will not have any inflation.
    But if they stabilize, watch out!
    Inflation is at the door.
    Sarah Palin is no dummy. She gets it immediately.
    Why do not Bernanke and Obama get it?
    They need inflation to shrink the debt and minimize private ownership.
    The deception is deliberate.

    Run, Sarah, Run!

    You get it!!!

  • Lennart Bilén

    Paul Krugman Jan 2, 2011, NYT:
    The figure (at Len Bilen’s website*) illustrates Okun’s Law — the relationship between growth and unemployment. (Gah
    — I’ve tried to remove the connecting lines, to no avail.) The horizontal axis
    shows annual growth rates of real GDP; the vertical axis shows the year-to-year
    change in the unemployment rate. Two things are clear. First, the economy has
    to grow around 2 1/2 percent per year just to keep unemployment from rising.
    Second, growth above that level leads to a less than one-for-one fall in
    unemployment (because hours per worker rise, more people enter the work force,
    etc.). Roughly, it takes two point-years of extra growth to reduce the
    unemployment rate by one point. So, suppose that US growth is accelerating.
    Even so, it will take years of high growth to get us back to anything
    resembling full employment. Put it this way: suppose that from here on out we
    average 4.5 percent growth, which is way above any forecast I’ve seen. Even at
    that rate, unemployment would be close to 8 percent at the end of 2012, and
    wouldn’t get below 6 percent until midway through Sarah Palin’s first term.

    Paul Krugman just wrote:
    “Sarah Palin’s first term”

    and all of his readers started
    to squirm.

    You cannot be serious

    You must be delerious

    Next thing you tell us:
    “She is a bookworm”.

     * figure shown at


  • John_Frank

    Doug, excellent post. Thank you.

  • blackbird

    Excellent post Doug, Thanks.

  • DocBarry1

    I remember this well  thanks

  • VADMCollingwood

    Back in the day, the Alaska permanent political class and their sycophants used to marvel at how she was always way out front on an issue before they even knew there was an issue.  

    The Sarahdipity has not left her.  Which is one reason why people should not fret that about her decision to not run for president at this time.   

  • imo123

    Doug truly one of your best posts! 

    The increase in gas is obvious but there are other increases that are seeming to slide under the radar.

    Here’s some small inflation examples I’ve noticed that really have been adding up in my grocery bill:  granola bars package 2 LESS in a box for the same price, that’s 20% less for the same price; Some cake mixes a couple ounces less for slightly more;  and a large jar of mayo a few cents less then SIX DOLLARS!!!  Six  bucks for Mayo and we are not talking industrial or commercial size.

    Remember when coffee packaging changed from 16 oz. to 13 oz,  the other day I saw one brand package was down to 11 oz.

    Here’s another thing that reminds me of the 70’s.  Drove by a Shell station a week ago and gas was $4.05, just 5 miles down the road my gas warning light went on.  The gas price at the station in town was $3.63, don’t know why it was at a bargain.  Sure enough there was a gas line.  I thought "omg, gas lines just like the seventies."

    • FlAli

      I know what you mean.  Tuna used to be 8 oz. then 6 and now I believe it is 4 oz.  I do not even bother to check anymore.  I went to get a pair of rubber gloves the other day at Walgreens.  The cheap kind that used to be 99 cents are not $1.99.  Everything has either gone up or contents reduced substantially.  Between the increase in gas prices (which influences everything that is bought or sold) and inflation, pretty soon we should all be lucky if we can live off boxed macaroni and cheese.

  • lorenzini

    I have said for a long time that prices are up but the way it is happening does not reflect in the numbers. One glaring example is toilet paper. It has decreased in size by about 20% but price is the same.

  • misterlogic0013

    Again Sarah Palin is out in front with the issues of today .. Any questions ? 

  • mder4thegov

    Did Fox News, Krauthammer, Rove, Ingraham, Kristol, Coulter or any other so-called republican mention this fact…that Gov. Palin was way out in front of this issue?  No, I didn’t think so? 
    Just like RINO wusses in the republican Establishment, who are showing themselves to be nothing more then democrat-lite, Fox News is now MSNBC-lite, IMO.

  • BrianusBerkleianus


  • Escaped_Teleprompter

     To Alta1, the troll,
    For your information, Gov. Palin writes her own posts, so don’t try pretending that every time she is right, which is very often, that it must be the work of someone else. 
    Yes, Alta1 is a known troll who slithers around the web making derogatory remarks about Palin. 

  • Freempg

    You bottom feeding scum sucking sociopathic troll, get out of here and slime back into your hell hole. Pig.

    C4P: Here’s a post from this rearend:

    "Thank you Ann for stating the truth that many want to avoid. If Sarah, the quitter, Palin wants to be the nominee, then she should have thrown in her hat and compete with the other nominees going thru the 20+ debates and fundraise. Let’s see how much money she can raise and how she reacts in various debates, with different formats, different media interrogators. It is great to give miniscule speeches on tv as a paid commentator, or post on facebook the eloquent pieces. But show us Governor quitter that you have the chops to compete in the race with the other runners. For ehr supporters, cry me a river about the ethics complaints, etc. When you are a capable and succesful individual, in a primarily republican state, you can overcome all these, in order to prove your skills. You said it Ann, that’s how we found what a flake Perry was. (I have to admit I was enamored with his record, until we show his performance in the debates.) Say what you want about Romney and the non-Romneys, he was able to withstand multiple attacks by the anti-Mormon brigade and survive. Only delusional freepers believe that Governor quitter,…"

    Read more:

  • Yankee4Palin

    Who ever you pay to post for you, you did’t get you money’s worth on that one.

  • Freempg

    You are a moronic RomneyBot, a stooge, a trollip to fill your wallet, the symptoms are obvious, your vomitous comments are diarrhea. Go back to the dailycaller and splatter them there.

  • Yankee4Palin

    Romney will not be the nominee. You can keep trying to pump him up by attempting to snark at Sarah Palin, don’t know who is a bigger fool, you or Romney, probably both.
    Mitt is a bottom feeder who has spent over 6 years running for President.
    He couldn’t make it through 2008 and Romney will arrive at the convention this time  with not enough delegates

  • Reynolds88

    Thanks for doing the unpleasant homework, Freep!  LOL

  • Freempg

    Typical fawning Mitten Kitten lapping his slicked back hair, no wonder it’s so shiny and will be set afire should he have the courage to utter one negative comment about Obama. All the hollowed-out liberal wimp is capable of doing is wasting more millions deploying robotic fools like you to cast aspersions against common sense conservatives not inbred of blue blood. Romney is as sick as you are, having lusted for the presidency for the sake of power — to do what? — compromise with the devil. You sold your soul troll, go to Hell.

  • TEXs


    we don’t tolerate slimy,bed wetting libtards or guttless RINOS and sissy Rombots.
    So which ever group you belong to,get the Fluke out of here.

    Take your garbage somewhere else!

  • Yankee4Palin

    You are frustrated your candidate will never measure up to Sarah Palin’s
    knowledge and accomplishments so while you attempt to marginalize her, you also take time to post lines of lies.  Sarah really eats at you and your frustration shows, she lives rent free in your head.

  • Freempg

    It is a waste of time reading even a word of your posts, therefore I did not. Post all you wish, you have been exposed as a troll and a fool. This is the last you will hear from me. Maybe I made you an extra buck that I responded to your nonsense. So be it. I don’t mind contributing to an effort to save your soul … sadly your mind may be gone for good (rather evil).

  • John_Frank

    Please. Never a supporter. Classic Troll. Ignores Facts

    Sarah Palin’s a Brainiac

    Written by a Democrat who has actually worked with Governor Palin, unlike someone who simply parrots talking points put out by the Romney campaign.

  • Yankee4Palin

    Almost  embarrassed  for you.  All the attempts to lie about Sarah Palin
    is proof you know your Romney will not be the Nominee so you come
    on this site to vent your anger.

    Mitt does not have the leadership qualities to be a President.
    His lack of a core to serve his country is carried over with his 5 sons
    Not one of his 5 sons felt a need to serve their country when we were attacked on 9/11
    But then again it takes Men to do that.

    Sarah’s son is serving his second tour in this war.

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