The Department of Labor’s Bureau of Labor Statistics or your own lyin’ eyes?
Forget the modest 3.1 percent rise in the Consumer Price Index, the government’s widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.
The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don’t look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans’ typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.
And from an experiential standpoint for most people prices (which is what most ordinary, average Joes think of as “inflation”) are up sharply. The big offender? Transportation costs (AKA gasoline) up 21% year-on-year. Sounds like a campaign issue to me. Not a fair campaign issue but an issue that resonates with people nonetheless.
Does this mean I can stop making my car payments, since they dont count?
Steve
Ahh, so if we include something that is currently going up by alot for non-monetary reasons then, yes inflation is high….of course it has little to do with monetary policy.
Still might be a campaign issue, so expect lots of stupid rhetoric from both sides.
Pretty much what I was getting at. Most of the campaign rhetoric sounds pretty dumb unless you’re a True Believer. Imagine what it sounds like to me.
Agreeing with Steve Verdon: there have been no changes in the money supply to spur the inflation we’re currently experiencing (which is a major blow against the money multiplier and the loanable funds model).
Despite declining domestic demand gasoline prices are pushing against their all-time high again and raising the cost of pretty much everything else. Neither the President or Republican candidates can do a damned thing about it in the short term. In the long run I’d really like to see a large increase in the gasoline tax to push demand down even further, with the money refunded to tax payers at the end of each fiscal year.
Nearly all major oil-consuming countries and most oil-exporting countries subsidize gas prices domestically. China does. India does. Saudi Arabia does. Iran does. And so on.
Our methods of subsidizing oil prices are a bit more indirect. The three aircraft carriers currently in the Persian Gulf aren’t there for the sea breezes.
China’s subsidies are becoming a major factor in pushing oil prices higher and Saudi and Iran’s subsidies have the peculiar effect of limiting how much oil they have available for export.