"Prices cause inflation like wet sidewalks cause rain” was said by United States Steel Corporation CEO Roger Blough (1904-1985) in January 1966; “"Steel prices cause inflation like wet sidewalks cause rain” was said by Blough in August 1967. The statement switches cause and effect. The rain causes the sidewalk to be wet; a wet sidewalk does not cause it to be raining. Inflation causes higher prices; higher prices do not cause inflation.
“It is often said that high prices no more cause inflation than wet sidewalks cause rain” was cited in print in 1947. It’s not known who said “wet sidewalks cause rain” first, but Blough’s statements helped to popularize it.
Wikipedia: Roger Blough
Roger M. Blough (January 19, 1904 – October 8, 1985) was the chairman and chief executive of the United States Steel Corporation for 13½ years, from May 1955 through January 1969. In this position, he is best known for serving as the American steel industry’s principal spokesman when the industry clashed in April 1962 with President John F. Kennedy on the issue of commodity steel prices.
19 December 1947, The Socialist Call (New York, NY), pg. 2, col. 1:
Must The Marshall Plan Mean Inflation
By NORMAN THOMAS
As broadcast Over CBS, Friday, December 12, 1947, 11:15 P.M.
It is often said that high prices no more cause inflation than wet sidewalks cause rain.
7 January 1966, Morning Advocate (Baton Rouge, LA), “U.S. Steel Head Pleased With Pricing Action” (UPI), pg. 16-A, col. 1:
Blough said selective price increases in basic industries are not necessarily inflationary. “Prices cause inflation like wet sidewalks cause rain,” Blough said.
10 April 1973, Morning Star (Rockford, IL), pg. A5, col. 6 ad:
Sidewalks Don’t Cause Rain...
Of Course Not, Rain Causes Wet Sidewalks.
And High Food Prices Don’t Cause Inflation…
Inflation Causes High Food Prices.
(DeKalb County Farm Bureau.—ed.)
Mastering Fundamental Analysis
By Michael C. Thomsett
Chicago, IL: Dearborn Financial Pub.
In the August 1, 1967, issue of Forbes, Roger Blough stated: “Steel prices cause inflation like wet sidewalks cause rain.”
PETER SCHIFF: Don’t Believe Obama’s Fairy Tale About Henry Ford
PETER SCHIFF, EURO PACIFIC CAPITAL APR. 6, 2012, 6:43 AM
In reaching these conclusions Obama relies on classic “wet sidewalks cause rain” reasoning, and assumes that an effect can be the father of the cause. But as we debate how to move the American economy out of the rut in which it is trapped, it’s important to know where to put the cart and where the horse.
The Deflation Menace
By Peter Schiff
Euro Pacific Capital
January 22, 2014
The Journal is advancing a classic “wet sidewalks cause rain” argument, confusing and inverting cause and effect. It suggests that falling prices caused the Great Depression and in turn the widespread consumer suffering that went along with it. But this puts the cart way in front of the horse.
New York City • Banking/Finance/Insurance • Tuesday, January 21, 2014 • Permalink