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For folks who are trying to ignite inflation, this sure isn’t working out very well. It’s been hoped by the country’s central bankers that the massive quantitative easing program along with near-zero interest rates will touch off a wave of inflation that if not exactly the same thing as boom times, will at least give the appearance of a strengthening economy. However, month after month inflation in the goods that the Fed cares about seems muted. Now this month we had the horrid news that official inflation numbers are falling not rising.

“The consumer-price index declined 0.2 percent,” reports Bloomberg, “the first decrease since April 2013, a Labor Department report showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg called for unchanged. Excluding volatile food and fuel, the so-called core measure was unchanged, the first time it failed to increase in almost four years.”

Oh, the horror of falling gas prices!

It should be noted that falling fuel costs, not coincidentally, also contributed to the robust retail sales figures that boosted the economy in August

“Lower gasoline prices and better job growth encouraged consumers to open their wallets this summer, pushing up sales at U.S. retailers last month,” reports the Wall Street Journal. “Retail and food sales rose a seasonally adjusted 0.6% in August from July” according to statistics released by the Commerce Department.

Therein lies the failure of the Fed policy.

Creating the type of artificial inflation the Fed is after is idiotic. And even in their idiotic goal they’ve failed to live up to their own expectations.

Inflation in core items that the Fed cares about remains stubbornly low. Inflation in food and energy, which the Fed pretends doesn’t matter, remains much more volatile. And energy inflation is cramping consumer style.

Today it’s not a question of “if” we have adequate inflation for a sound economy, but rather if the type of inflation that we do have is helping the economy or hurting the economy. Because we do have inflation, it's just not the "good" kind the Federal Reserve is banking on. Ha, ha! Banking on. 

Ignoring for a moment that inflation is a symptom of a hot economy not an end goal, stable or lowering gas prices would help the economy by increasing the amount that consumers have to spend on other things. Those other things—like electronics, clothes, cars (you know? the discretionary items in flyover country?)—are the missing fuel for an economy that has stalled out while facing up hill.

It’s as if the policy makers have decided to fill the gas tank up, while ignoring the big, gapping hole out of which the fuel is sloshing and gurgling underneath the economy while trying to chug up that steep slope known as Obama.

Let’s hope now that no one lights a match.

As I have demonstrated time and again in this space, there used to be a time in this country when the link between a sound economy and low and stable energy prices was understood.

There was a time when that was bipartisan issue.

Today we have so decoupled energy from the people that energy is supposed to serve that the stock market falls on lower energy prices, rather than recognizing the legitimate stimulus value lower energy prices have on the rest of the economy.

The flip side is that higher energy prices have a dampening effect on the total economy. If Obama cared so much for the workers who make minimum wage he’d have an energy policy that saves them money at the fuel pump since that’s a cost that costs them dear.

“A penny sav'd, is a penny got,” says the English proverb.

Of course Obama knows nothing about pennies or saving.

“Since World War II,” writes St. Louis Fed economist, Kevin Kliesen, “nearly every U.S. recession has been preceded or accompanied by a sharp rise in energy prices.”

Kliesen was writing in the winter of 2000, a time when he was hoping that better policy tools by the Fed would make oil shocks and an accompanying general recession a thing of the past.

As 2008 proved, oil shocks, if anything, have a greater impact then they did previously.

Inflation in oil is not just a bad thing; it’s the worst of all possible things.

Don’t ask the Fed about inflation in oil. They think things are great.

Ask the consumer.

Because we are decidedly less sanguine about high energy prices.

And so is the economy.