But then I do some research. I talk to the people who are doing or saying the thing in question and listen to them explain it in their own words. Or I listen to an expert who does understand the full complexity of what's going on, and the end result of my humble quest for clarity is to find that, as it turns out, the thing is indeed as bad or stupid as it first appeared.
This happened a while back in a conversation with a relative of mine about economics. I have long held a suspicion about a basic economic principle which I've been hesitant to press as an argument for fear that someone more economically astute might expose my ignorance and naivety.
But then I was in the car with my relative who has a degree in finance and decades of experience working in the banking industry. The conversation moved toward his line of work, and since I knew he would take it easy on me, I put my theory out there: "I suspect this is way over-simplistic," I said with hesitation. "I'm not saying I know this is the case. But, isn't inflation, at its root, just the result of personal greed? I mean, don't people typically charge more for things not because they have to but because they're able to." I eagerly awaited his correction, and with the wisdom gleaned from a formal, finance education at a reputable university and thirty years experience as a professional banker, he set the record straight: "Yea. That's pretty much it."
So, on his authority, I argue confidently that inflation is generally the result of human greed in the way that stinky locker rooms are the result of human sweat. Despite all the complex factors involved in the process of inflation, the root cause appears to come down to individual people wanting more and more and more at the expense of others.
One of the things that brought this to mind lately was several stories I've come across about the California housing crisis. One documents a San Francisco professor who pays over $2,000 a month to live in a one-bedroom apartment with her husband and two kids. People who make $100,000 a year in the Bay Area can be eligible for low-income subsidies!
One common explanation for absurdly high home prices is the simple law of supply and demand. But there is a point about supply and demand that many people fail to see for much the same reason a person fails to see the contact information on the driver's license next to the $500 he "finds" in a dropped wallet. There's nothing about high demand that should cause prices to rise. In most (not all) cases, the seller raises the price because of ability not necessity.
Let's say a contractor purchases $100,000 worth of materials and a $50,000 parcel of land to build a home. Once the house is finished and it comes time to calculate the selling price, in addition to the cost of materials and land, the cost of labor and expertise are all factored in. With all the relevant factors in the equation, the final price comes to $250,000.
But what if, just as the final price was calculated, there's a social media storm about a posh, residential developer who builds custom celebrity homes buying a swath of land just miles from the contractor's recently completed house? Now, instead of ten prospective buyers the contractor has a hundred, and many of them are willing to pay four times the $250,000 which was the reasonably calculated cost of the house.
Here's the key point: Once the rise in demand occurs, the materials supplier who sold to the contractor and the laborers who worked for him don't show back up and say, "I know we agreed on the price you paid us, but now with the increase in demand, we're going to need quite a bit more." The contractor can make the same profit he originally planned by selling the house at the original price, and he will still make a profit at that price even if there are people willing to pay him four times more for it.
"Yes," some might reply, "But look at all the money he would forfeit by keeping the price the same when there's such demand."
Yes, but look at the thousands of people living in cars and tents in California because so many sellers charged what they legally could rather than what they morally should.