… 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.
How can you have a meaningful CPI when you strip out the costs for food and energy? Such nonsense further destroys what little credibility politicians and academics have.
Obviously you can’t. We need to insist that all politicians and the government regardless of party stop lying to us.
“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.”
My family and I took a long car trip this weekend. We didn’t need to stop for gas (I’d filled the tank the night before), but probably half a dozen times during the trip my wife or I said, “boy, would you look at that gas price!” On the other hand, when I buy milk I rarely even notice the price — I have no choice about whether to buy it, and it’s part of a $100 trip to the grocery store.
As far as my gut sense of prices, gas is probably 10 times as important as food, even though I’d give up driving before I’d give up eating. It’s hard to imagine how to make a fair index that takes this mismatch into account.
If only Americans were as interested in economics and politics as they are in American Idol. Fortunately, Americans are slowly waking up to the reality of Fed policy, which benefits Wall Street with easy money, while raising prices for Main Street. While your standard corporatist politicians (such as Bush and Obama) seem not to care much about it, people like Ron Paul are becoming increasingly popular because they question the fed’s reckless policies, which are not benefiting most Americans.
[blockquote] “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.” [/blockquote]
Its more than just that we encounter these costs more frequently; its that they are unavoidable, “non-discretionary spending” as they say.
The quipper was right: “I can’t eat an iPad”. And you can also do without it if necessary. But you can’t do without food, petrol, rent, water, or electricity.
Here in Australia, the CPI does not include council rates, water, electricity or rents. These have been increasing (particularly as “green charges” get passed on to consumers by utilities) but this is not reflected in CPI, and therefore is not reflected in wages, where any increase is usually tied to CPI.
This hurts the poorest people in society first – unwise policy.
Our money is not tied to anything accept poltical expediency and outsized Wall Street political contributions. We as a people have not demanded reponsibility of those we elect to put things on more sane track. We have not demanded that our Federal Govt live within its means. Therefore, no politican feels any heat to act like a true leader.
To my point above: President Obama, the greatest deficit spender of all times can stand up in front of people and declare “we can’t continue to spend more than we take in”, knowing full well his SECOND budget proposal is just as much a sham as his first. While denigrating those who propose budgets that will reign in the exploding deficits. While denigrating and lying about a vote to NOT raise the debt ceiling and how that vote would lead to default.
Shameful in the very least, leadership in the least.
The liberals are trying their best to stir up class warfare, but the reckless spending feeding inflation on basic goods (which is not reflected in the CPI) is hurting the poor much more than the “Bush tax cut extension.”