Let's face it folks ... If you don't count energy and food costs ...

[zbdent]

inflation is negligible ...

(that was the logic of a RW radio station a few weeks back)

[LSparkle]

1. Didn't Reagan pull housing out of the equation years ago?

The way they've been calculating "inflation" for a while now has omitted some hefty chunks of most people's budgets.

[BrklynLiberal]

2. The saddest thing is that there are dimwits who actually buy into that crap...

and not all of them are among those who are raking in the dough in this economy.

[zbdent]

4. I heard a good analogy of what kind of mindframe those types are in ...

they believe they'd never get hit by lightning, but they're going to hit the lottery ...

[BrklynLiberal]

8. Excellent analogy!

[Warpy]

10. The saddest thing of all is that Social Security COLAs are

based on those jiggered figures, one of Greenspan's ideas to keep the elderly desperate.

[maddiejoan]

3. which is funny

because all I can afford now is Energy, Food and Rent.

[zbdent]

5. lucky you ...

you can afford all three ... many people can't ...

[maddiejoan]

6. ask me again in a month

I've been living off my savings since September when I was laid off.

[msongs]

7. and if you don't include rising prices, there is no inflation either :-) nt

[Atman]

9. If you don't count breathing, the air is clean.

If you don't count Republicans...well, we'd all be better off.

.

[zbdent]

13. and if you don't count Democrats ...

you must work for Diebold ...

[nightrider767]

11. You can also put it this way...

"if it's made in China,,,, "just about everything" inflation is negligible....

WTF!?! "here China,,, here's another a-bomb to hold over our head!".

By the grace of the communist Chinese government,,,we can still afford TV's.

Ahh, but if we could return our four big Chinese TV sets and cheap Chinese tools, and instead have bought a single smaller, shitty, American made model, how much better off we would be today.

Let's test the bottom folks and see where this train is gonna go.

Who's with me?!

[CGowen]

12. Substitute the steak - hamburger argument with oil;car - walking;bicycle and it works

Let Them Eat Hamburger

In the early 1990s, press reports began surfacing as to how the CPI really was significantly overstating inflation. If only the CPI inflation rate could be reduced, it was argued, then entitlements, such as social security, would not increase as much each year, and that would help to bring the budget deficit under control. Behind this movement were financial luminaries Michael Boskin, then chief economist to the first Bush Administration, and Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System.

Although the ensuing political furor killed consideration of Congressionally mandated changes in the CPI, the BLS quietly stepped forward and began changing the system, anyway, early in the Clinton Administration.

Up until the Boskin/Greenspan agendum surfaced, the CPI was measured using the costs of a fixed basket of goods, a fairly simple and straightforward concept. The identical basket of goods would be priced at prevailing market costs for each period, and the period-to-period change in the cost of that market basket represented the rate of inflation in terms of maintaining a constant standard of living.

The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.

...

http://www.shadowstats.com/article/56

[gravity]

14. It's true

You can't base inflation just because the costs of a couple of goods goes up in price, although this is a very significant category for most Americans.

This distinction is important in terms of economics because the role the Fed plays in controlling the money supply to fight inflation. Changing the money supply isn't going to have much of an effect on the price of food and gas in relation to other goods.

The reason energy prices are more expensive is because of the increasing global for a limited resource, and food prices are higher because of subsidizing ethanol which drives up the price of food. The main cause isn't the decreasing buying power of the dollar, but other factors in the economy.

If you want to measure inflation in terms of the buying power of the average consumer, then you use the CPI which has been higher than the inflation rate recently.

[leftofthedial]

15. if you don't count energy and food

there isn't really anything left, unless you're rich.

[dmallind]

16. This has always been the metric

If it weren't we would have seen sizeable deflation at times in the 90s as oil and gas prices went down. It's not a plot or lie - it's ONE measure of inflation which removes the most volatile component. It's not SUPPOSED to be an all-encompassing measure of how prices of all commodities are acting.

This is not a "wing" issue. It's simply a way to make valid comparisons.