The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Why It Is Crucial To Own The Definitions

Posted on | April 13, 2011 | 11 Comments

by Smitty (h/t Lucianne)

After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things. Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse, according to the calculations by the newsletter’s web site,

Sure, we can refine methods as we know more. Unfortunately, we can’t seem to trust the government anymore. Every single number coming out of DC can reliably be anticipated to flatter the administration as much as possible at first blush, and then get walked back as the prevarication gets harder to hide.
Going back and checking the nonsense across decades helps gauge just how much sunshine has been blown up the public backside.
Insty was a trifle more caustic in his assessment.


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