Far be it from me to carry water for the Biden administration or to downplay the impact of inflation on working families as White House officials did in June when they dismissed rising prices as merely "transitory." When 87% of Americans say they are very or extremely worried about higher prices, and one out of 10 people say they can't afford to buy holiday gifts this year, it's a serious issue.
Still, you can see why ruling elites are a little mystified by the collective freakout, and it's not just because they're so rich they don't care (although that's true).
Truth is, nothing new is happening.
Real inflation has been soaring (SET ITAL)for four decades.(END ITAL) What changed is the artificially deflated (SET ITAL)official(END ITAL) inflation rate, which is why people are finally paying attention.
Presidential administrations have repeatedly changed the methodology the Bureau of Labor Statistics uses to calculates the U.S. inflation rate. Why? Politics, of course. The government wants to fool voters into thinking that they are better off, or at least think that they aren't losing ground as quickly as they actually are. Lowballing price increases also saves the Treasury money on big costs such as Social Security payouts, which are tied to the official inflation rate.
Housing, food and fuel account for a significant share of typical household expenses, but because they have been rising steadily in price for years, the feds keep lying about how much people really spend on those items. They've also factored in "shadow inflation." The relative cost from year to year of, for example, a phone, is discounted going forward because an iPhone is of higher quality, with more features than Ma Bell's "old reliables." In reality, of course, you need a standard phone -- which, today, is a smartphone. It's not like you can time travel back to 1980 to buy a rotary dial. So the BLS doesn't count a $1,000 iPhone as a significant price hike over a $20 plug-in model.
John Williams' Shadow Government Statistics presents inflation the old-fashioned way, as it was calculated in 1980. The difference is significant, often as much as 10% per year. In September, for example, Forbes reported that the BLS announced the official inflation rate to be 5.4%. But the "real" inflation rate was 13.4%.
According to the official inflation rate, an item that cost $100 in 1980 now costs $336. Because inflation -- official inflation -- ticked up a few percentage points each year, it has not been a major political issue over the last 40 years.
No one was paying attention to the truth: Inflation has been destroying living standards for many years. According to Shadow Government Statistics, due to exponential calculations, that $100 item in 1980 now costs about $2,200. But median family income has stagnated; a $100 paycheck in 1980 is now a $335 paycheck, almost exactly the official inflation rate. Wages haven't come close to keeping up, except for the top 1%. They're doing great.
Median monthly rent has skyrocketed from $243 in 1980 to $1,098 this year; median house purchase price rose from $47,200 to $382,000. Gas was $1.19 per gallon; now it's $3.41. College tuition, room and board was $3,900 and is currently $35,720.
So, inflation is an ongoing problem. The only thing that's new is that we are noticing it because it's being reported. Although, it's important to note the inflation rate that is tanking President Joe Biden's poll numbers is still being radically downplayed.
Because the rate is now high enough to register officially, Biden is the first president since Jimmy Carter to be blamed for inflation. Ronald Reagan, both Bushes, Bill Clinton, Barack Obama and Donald Trump had high inflation, too -- but they got off scot-free.
"There is a psychology to inflation that is different from everything else, and it tends to drive how people view the economy because they experience it every day whether it is at the grocery store, gas pump or buying household goods," says Democratic pollster John Anzalone. As the last 40 years prove, though, the government is also very good at convincing people not to believe their own lying eyes.
Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of a new graphic novel about a journalist gone bad, "The Stringer." Order one today. You can support Ted's hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.
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24 comments:
What a dumbass. Not surprised that you continue to post this ignorant and asinine drivel.
Inflation has been killing us since the traitors in congress allowed the (private) Federal Reserve Bank of the United States. Which has negligible reserves, and is actually controlled by the old well known European banking families, to create a debt based fiat monetary system.
Prior to the establishment of the Federal Reserve, the Dept. of the Treasury created the money supply to benefit the commerce of the citizens and to collect taxes. Today the globalists who run the FED create taxpayer funded debt that enriches bankers with interest and funds the socialism that gives the traitorous democrat part so much power and support.
Every year congress demands more debt. Every year the FED obliges them. And every year we all owe more to the ancient usurious swine who have solidified their grip around our collective throats in the form of debt slavery on this entire planet.
How many of you fools maxed out your credit cards today? Same principle and exactly the same debt slavery masters.
Same comments I've been making. Purple who hate Biden have been complaining about gas prices (when many are working from home and using much less has than years past), while ignoring the inflation in housing prices, and automobile prices, and so many other things which can't be blamed on Biden.
Things have always been horrible...we just didn't know it. Thank you Mr. Rall for opening our eyes. Now that we know how miserable we really are, we need to spread it equally. Thanks Mr. Rall.
Um, we are coming out of historically low inflation. Be it far from me to defend the worst President in US history, but when Social Security benefits didn't give an inflation increase under Obama, it wasn't because Obama was screwing the seniors, it was because the inflation metric used by SS from its inception was zero.
Seniors are rejoicing over the anticipated high increase for next year, which is because Biden's policies have jacked up inflation.
There are all sorts of things wrong with this type of anecdotal "analysis." How many square feet and what finish-out was the "average house" in 1980? Ever tried to text, navigate, or surf the web on a rotary-dial landline? How much average income vs the price of a large color TV? A ham-and-cheese sandwich, a roast and vegetables, or a salad made at home? If you must have free-range lettuce, fair-trade cheese, and organic ham from Whole Paychecks rather than shop at Piggly Wiggly, it will cost more. If you eat 42 meals a week outside of the home versus the occasional night out, it will cost more. Ff a person chooses to finance a house twice as large as the average 1980 house, along with the "must-haves" and buy each of their children a phone, you cannot compare that to 1980 lifestyle choices. "Inflation" cannot be correlated to lifestyle choices. It doesn't cost, in relative terms, more to live, it just costs more to keep up with the Joneses, who are spending more to out-do you.
"Um, we are coming out of historically low inflation. Be it far from me to defend the worst President in US history, but when Social Security benefits didn't give an inflation increase under Obama, it wasn't because Obama was screwing the seniors"
I bet Tristan's booty jumped with glee when he found a way to discredit ol' Barry indirectly while getting a shot in at the same time.
It is so obvious when the bias against #44 is racial.
Look, its ok - we get it - we know you guys were raised to believe that black people are not capable of and shouldnt be serving in positions of authority in this country.
Henceforth, you must find every waking opportunity of your soulless lives to find a way to deligitmize his presidency.
Due to the fact that a black person served in the highest elected office in this country, it screwed with your false sense of superiority and truly rattled your poor little pathetic way of life in this godforsaken state.
Put a little differently:
Paraphrasing one macro fund manager, assets you *want* to own (real estate, the S&P 500, NASDAQ) in order to become wealthy have inflated at enormous rates and that has been good for asset owners. Things you must buy to merely survive have not. Not so good if you couldn't buy these things (for whatever reason). No money for assets=economic slaughter and impoverishment.
Thank the policies of both parties for decades.
Perhaps BTC does fix this. I do not know, but there better be an answer or when the long bottled up consequences of ignoring the GINI coefficient finally come home, we will wish we were discussing matters so benign.
The economic storm of the millennia is approaching. "Modern" citizens of every nation are ill-prepared to weather even the concept of "going without" far more than luxury items....forget about high prices....worthless dollars and sky-high unemployment will truly wake everyone up.
The Great Depression was a cautionary tale, but everyone's ignored history, so it will repeat. The difference is - back then, most everyone lived on a farm and was used to the idea of living within their means....today? Gonna be ugly.
@5:59
>GINI coefficient
You mean the low IQs who spend every penny like a drunken sailor vs those who dont?
I grew up in a poor family and learned the value of a dollar and saving and investing. I have more money saved up than my cousins who grew up middle class and have to borrow money to repair their homes or their European imported vehicles.
Stupid people get exploited. That’s just a fact of life.
I thought that the illuminati controlled the Federal Reserve Bank, right?
It seems the subject here brought out some worthwhile opinions. It amazes me that the loudest and most opinionated commenters here are determined to ignore the obvious on such important subjects. How can anyone overlook the inflation of Wall St equities?
And what about the GOP and Dem primaries each trashing their candidates who insisted on auditing the Fed 2 years ago? It seems(ed) apparent that CNN and Fox were in bed with the parties to throw the most intelligent and insightful candidates under the bus.
Indescribable vomit. The numbers do not support this moron's conclusions.
I can tell what he's trying to do. He's trying to think. He must never do that because he's just not very good at it.
You want inflation. Go back to the Carter administration, that was inflation. I fear we are about to see another dose of that. If Mr. Biden has his way I expect we will. If cooler heads prevail and Mr. Powell and his buddies bite the bullet it may still be avoided or at least mitigated. But a the cost of recession. Not likely under Brandon's watch. He's got to keep the peons voting Democrat for the next 200 years.
bring back the jerry ford WIN button
Money will be everywhere. Our Congress stopped talking in terms of millions or billions. It's now just trillions. In high school economics I learned that adding billions without value made money worth less, hence inflation.
We couldn't imagine trillions. I guess I just don't understand the new math.
It’s simple. Too many dollars chasing too few goods. That situation occurs for various reasons. The most recent being the pandemic shutdown.
7:57, I too grew up poor. At time on social economic assistance and thankfully sometimes above that line. So I am not approaching this as a academic subject.
You are correct in that some impoverished people are poor managers of money, but not always. To the real point though, poor manager of money or not-it is inarguable that wages have been stagnant for decades; therefore, people dependent upon wages became poorer.
For decades these people didn't have readily available means of entering into the assets that our policies allowed to inflate, some of that is changing today. I hope for the better.
If you think the GINI coefficient is to be dismissed then I will not argue, it would be pointless. Best to you.
5:50, too bad you don't understand "STUPIDITY" isn't racial.
If a white candidate tried to run for POTUS with his credentials, the Dim-O-Krats would have a sh*t fit and would still be trying to stop him.
If there wasn't something bogus about him, them why did he have his records sealed????? You can bet if it was a white candidate, those records would have been leaked!!!!
@8:18
I know you are trying to he funny. However, the “Illuminati” is a modern buzzword that refers to the ancient concept of the “Keepers of the Flame” who would keep the fires burning when hunter gatherer people did not yet know how to start fire. The Keepers of the Flame would literally keep the power of fire going for everyone else.
The Keepers of the Flame eventually became the “Controllers of Knowledge” because knowledge of how to make fire couldn’t be allowed to spread to everyone because then their comfy “job” as keepers of the flame would become redundant.
Today they control the flow power that is information. Today they are simply referred to as the Illuminati, aka The Brotherhood of the Flame aka a lot of other names like Freemasons.
Today, initiates into the Brotherhood of the Flame (Illuminati) obey their orders to control both “sides” of the opinions of the public or face the consequences.
Well there are some insightful comments here some are simi close to the real problem but no one seems to really get it. Bottom line is that the good ole USA is and has been bankrupt for the last forty years. The moment the political leadership decided not to tackle the first trillion in debt was the moment America became insolvent. And we’ve been borrowing with insolvent IOU’s since. The problem isn’t that America couldn’t pay it way out of debt, the problem is there’s no political leadership that simply tells the public the party is over. Any real company would have been declared dead decades ago. But we keep borrowing from countries that hate who we are and what we stand for. The shits gonna hit the fan soon. And all that money you have saved will be as worthless as some of these comments.
I need to renew my Illuminati membership
I personally like inflation I am selling one house and refinancing another, times couldn’t be better .
@5:20 PM
I believe it is you who truly does not understand.
Our currency is not backed by anything except interest payments for the debt on a ledger.
Not backed by gold.
Not backed by silver.
It was backed by precious metals in the early days, but no longer.
The federal reserve has no reserves.
And our monetary system would collapse entirely if the debt is not backed by guaranteed interest payments from the US taxpayers.
5:20, the entire world is broke. The world of nation states are all irreparably indebted or will be soon via demographics. Even China faces this problem and they know it-the one child policy paired with the rejection of BTC will likely be seen as colossal blunders in the not so distant future.
As for borrowing from people who hate us-I assume you allude to UST held by China. China's UST holdings aren't as significant as in the past. Now they could hit the market and my money says the Fed would work with Congress to absorb them quickly. The world is just different now.
To the original point of all of this, people are talking about inflation but after listening to smart people I have become convinced that inflation is the lesser devil in the room as its look-a-like, currency debasement, is the real monster taking us all out. And I mean ALL of us-now no nation, when faced with ANY problem, has any solution but....money printer go bbbrrrrrrrrrrrr.
It seems to me the individual (to be like the earlier comment re: "taught to save and *&^% the drunken sailor" types) has three choices-NASDAQ (effectively a bet on a revolutionary ai or quantum computing breakthrough), gold (have you looked at its relative return last year-when it had the perfect set up?), or BTC.
But is there really a point in worrying about paying back other bankrupt, nation state counter parties now?
Good luck. We're going to need it.
As Mark Twain described:lies, damned lies and statistics.
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