… if we’ve avoided rerunning the 1930s only to end up with a repeat of the 1970s, the public will judge… [Ben Bernanke] to have failed.
To this, the Fed has a stock response. It points to the all-urban consumer price index (CPI-U) and notes that it was up only 2.7 percent in March relative to the same month a year earlier. Strip out the costs of food and energy, and “core CPI”””the Fed’s preferred measure””is just 1.2 percent. When Google unveils its new index of online prices, it’s likely to tell a similar story.
To ordinary Americans, however, it’s not the online price of an iPad that matters; it’s prices of food on the shelf and gasoline at the pump. These, after all, are the costs they encounter most frequently. And with average gas prices hitting $3.88 a gallon last week, filling up is now twice as painful as when President Obama took office.