If this is supply-driven inflation, then there's little the central banks can do.

 A good "explainer" from Ramesh Ponnuru, who usually gives me a case of the "mehs."

Essentially, there are two types of inflationary pressure: demand-related and supply-related. The Staggering '70s experienced the former, which was broken through sky-high interest rates.

We, on the other hand, seem to be enjoying the latter.

For a textbook example of demand-side inflation, imagine that a central bank makes a surprise announcement it is going to manage interest rates and undertake asset purchases so as to engineer a doubling of total spending throughout the economy over the next year. If people believe it will hit that target, they should expect that in a year’s time, prices, including wages, will be about double what they are now.

This inflation would transfer money from lenders to borrowers (including most mortgage holders). The real value of a fixed debt will drop in half. Inflation would also raise the effective burden of capital-gains taxes as investors pay taxes on assets that look twice as valuable but aren’t. Restaurants would have to order new menus. And the transition could be rough.

At the end of the process, though, the real value of most people’s wages should be roughly the same as before: They will have twice the take-home pay, but each dollar will go half as far as before.

Supply-side inflation works differently. The economy sees the same amount of dollars spent, but they’re spent on fewer things at higher prices. Companies still have to change their prices as supply conditions fluctuate. But borrowers don’t come out ahead. Wages do not, even over time, adjust so that they are the same in real value. Taxes on capital won’t rise, but only because asset values won’t either. All of the inflation represents a reduction in economic activity. It’s pure loss for the economy overall.

To make matters worse, the central bank can’t do anything about it. If it wants to avoid the dislocations of our hypothetical demand-side inflation, all it has to do is call off its plan to double spending.

If, on the other hand, prices are higher because ports aren’t operating efficiently, what is it to do? Engineering increased spending will raise prices further. Reining it in will reduce output further. Neither loosening nor tightening money will get cargo moving through the ports any faster. The supply issues have to be tackled directly.

Easier said than done, unfortunately. It's not solvable from on high. Executive orders have either (1) not had any impact or (2) are threatening to make it much, much worse through forced layoffs.

The past two years have been far too interesting for my taste.