I wanted to see if there were any echoes of Fed Governor Warsh's malaise comments justifying last week's vote. There were, but I was most interested in this French L’Humanité interview of Stanley Aronowitz, Distinguished Professor of Sociology and Urban Education at the City University of New York, from before the midterm elections, hence well before Warsh's comments.

"Un immense malaise taraude la société américaine"

Huma: What are the dimensions of the malaise that is moving through society today?

Stanley Aronowitz: People believe that the economic system has exploded into bits. And they think that the political system is incapable of finding a way out, that there’s no one to defend them, to protect them from the disaster. You know that we have three million families confronted with foreclosure. We have a real level of unemployment that sits above 17% of the active population. And there’s no real political will to come to grips with these ultra-sensitive questions, apart from a few exceptions that confirm the rule, such as the actions taken by Elizabeth Warren, who works in the Obama Administration on consumer protection issues. The government itself is in question, hence the rise in receptiveness to the Republicans’ and the Tea Party’s anti-government or reduced-government demagoguery.

Huma: Could this terrible malaise become politically dangerous?

Stanley Aronowitz: I think there is already a rightward push. The emergence of the Tea Party is significant. Not that the people who turn to it are fascists. Many of its adherents are quite simply broke, angry, drowned in the pain of having lost their house or their job or sometimes both. Some are far from being racists or neoconservatives in their heart. Some even voted for Obama two years ago in the hope of change and they’ve simply found the Tea Party as a way of protesting, of howling their frustration and their distress. Fortunately, they lack for the moment any charismatic figure at this time who would drag along a more significant far right movement. But, look out, because the potential is there.

Aronowitz has a more charitable view of Tea Partiers than I generally read here, and seems to dismiss Palin, who is an opportunist rather than an ideologue, but who certainly is charismatic to some people.

I also wanted to see if anyone else saw signs of inflation. To a large extent financial entities in the US export inflation by bidding up prices for goods or assets in emerging markets. We also import deflation by paying less (substituting) for foreign goods that are far less expensive than domestically produced goods. But that export and import relies on cheap transportation, and cheap oil. I paid $2.95 / gallon for Regular 87 today, ten cents higher than a week ago, and probably a reflection of oil nearing $90/barrel. Industrial agriculture also relies heavily on cheap diesel fuel for machinery, and on natural gas for fertilizers.

The Wall Street Journal says that in the face of consumers cutting back, "For the past two years Weis has maintained a "price freeze" on 1,500 staple items" and that Giant Eagle has also been reluctant to raise prices. We've noticed that our Weis in PA is cheaper than any of our stores in MD, where people seem to be making more money, but CNBC says such forbearance can't last.

No Inflation? Grocery Stores, Gas Prices Tell Different Story

From grocery stores to gas stations and most other consumer stops in between, price inflation is shaping up to be the biggest economic story ahead.

Whether it's how much you'll pay for home heating oil or a loaf of bread, don't believe the non-hype: Even if traditional measures of consumer prices aren't yet showing major increases, consumers know what they see.

"It's not good news from a whole variety of perspectives," says Nicholas Colas, chief investment strategist at BNY ConvergEx in New York. "Food inflation is getting very bad and that's just bad news for the majority of consumers who are still stretched. It's bad news for the 42 million people who are on food stamps."

Price inflation is coming primarily from upward global pressure on commodities like the multiple grains that go into food production as well as heating oil and gasoline that power the world's growing economies. It's also being driven by a weak dollar, which has continued to fall in value as the Federal Reserve has printed more and more money to pay for programs it hopes will stimulate growth.
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"It's a headwind" for the economic recovery, [Colas] says. "Near-term, really strong inflation is going to be in a horse race in terms of the Fed's strategy to reinvigorate the economy and increasing prices that will hurt consumer confidence." So even if measures like the Consumer Price Index and the tally of food prices from the Bureau of Labor Statistics don't outwardly show inflation yet, it won't be long.
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"For most of the year food price inflation has really been pretty tame. But there are indications that inflation is going to be on the rise for the next six to nine months," says Ephraim Leibtag, senior economist at the Department of Agriculture's  Economic Research Service. "There's a bigger concern that with an improved economy that prices are going to rise even more."

To be sure, shoppers won't be paying more for everything as the upcoming holiday season is expected to show price discounts for goods such as clothing and technology. But for everyday consumer staples like food and energy, the news is not good.
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Indeed, the surge in commodities has been parabolic.

The Standard & Poor's GSCI agricultural commodities index is up 25 percent for the year and 16 percent in the last quarter alone. Among the big gainers: cotton (90 percent for the year), coffee (45 percent) and Kansas wheat (31 percent). Sugar's price has zoomed 26 percent in the fourth quarter, while corn, which is used to make so many other products, is up 20 percent for the year.

Yet BLS data show moves only in select areas when it comes to what consumers see on their grocer's shelves. A loaf of bread, for instance, cost $1.38 in September, up just 2 cents since January. Ground beef also was up only a few cents, to $2.30 a pound, while eggs actually fell 3 cents to $1.75 a dozen.

On the other hand, butter was the big gainer, jumping to $3.57 a pound, a 29 percent increase for 2010. Coffee rose 36 cents a pound to $4.17, a 9.5 percent gain, while pork chops jumped a quarter a pound to $3.34, an 8 percent increase. Leibtag confirmed it would be dairy and beef where consumers would get hit hardest, while things that aren't consumed directly but are used to make other products will take longer to have an impact.

"Our forecast for right now is that beef and pork products specifically will be on the higher end of the range," he says. "There are going to be impacts down the road as well for cereals and grains. It just takes longer to get through the system."

As is his wont, Tyler Durden at Zero Hedge sees more immediate doom:

How Ben Bernanke Sentenced The Poorest 20% Of The Population To A Cold, Hungry Winter

As is now becoming very evident, the prices of energy and food products are about to surge, and in many cases have already done so, but courtesy of some clever gimmicks (Wal Mart selling what was formerly 39 oz of coffee as a 33.9 oz product for example) the end consumers haven't quite felt it yet. They will soon. There is a limit to how much every commodity can open limit up before it appears on the SKU price at one's local grocer. And while a marginally declining "core CPI" is irrelevant for this exercise as it measures only items that are completely outside of the scope of everyday life, what will be far more important to end consumers will be the push higher in food and energy costs.