"The Bernanke policy of printing money is setting the stage for massive inflation," claims former House Speaker Newt Gingrich. Rep. Ron Paul, R-Tex., decries "the inflation all Americans suffer due to the Fed's relentless monetary expansion." Former Sen. Rick Santorum, R-Pa., fears not just inflation but "potentially hyperinflation."
The claim has a surface plausibility. If the money supply is growing and prices are rising, what more evidence do we need? But first impressions, in this case, are badly misleading.
Take the price of gold. It has more than doubled since Obama was elected in November 2008, allegedly because investors want a hedge against an increasingly worthless currency.
But gold prices were also on a rocket during the previous eight years. And they were not a portent of raging inflation. During the administration of President George W. Bush, the consumer price index (CPI) rose at an average rate of less than 3 percent per year -- while gold was tripling in value.
Oil and other commodities, believe it or not, can be affected by events that don't occur in the United States. Bentley University economist Scott Sumner, who sees no chance of an inflation outbreak, attributes rising prices for oil and other goods to strong demand in developing countries, particularly China.
Though some U.S. prices have jumped recently, most have not. The "core" inflation rate, which includes everything except food and energy, was 1.2 percent over the past year.
That may seem painfully irrelevant, given the supreme importance of groceries and gas. But you can't have general inflation without core inflation. If the Fed is flooding the economy with excess money, sooner or later all boats will rise.
Over the past decade, core inflation provided a pretty good gauge of overall inflation. The core CPI rose by 21 percent. The full CPI rose by 27 percent.
Comparisons with the last serious bout of inflation, the 1970s, suggest that today's worries are misplaced. Back then, it wasn't just fuel and food that soared: The cost of everything soared.
The depreciation of the dollar, likewise, is not really the unspeakable horror often portrayed. No one seems to recall that the greenback fell against the euro for most of the past decade.
That long-term decline, it turned out, was not a sign that you would soon need a wheelbarrow to carry your bus fare. Inflation remained firmly under control despite the worsening exchange rate.