Monday, February 17, 2014

The Inflation That Counts

CBS finally tumbles to the real inflation that affects the people who pay the taxes.
Food prices soar as incomes stand still

Notice the error in the picture caption:
Some experts believe food inflation is greater than the government thinks

Here's the correction: "every non-fool knows that food inflation is higher than the government cares".

In fact, even that doesn't do justice to the economics of the Left, which is designed to reduce the herd to impervious poverty. The Hunger Games economic environment is just around the corner, with D.C. being deliriously happily wealthy, while the rest of the country degrades. And who is hurt the worst? Single mothers, children, and the already poor? Probably not: the Farm Bill just passed was only 20% farm oriented; 80% was food stamps. This attack is on the middle class. The proper term is "Stagflation", just like under Carter, but with the real inflation hidden, due to government data manipulation after the Carter years.

Some comments from instapundit:
You know who’s not concerned? President Obama, who cranks the thermostat, eats Wagyu beef, and golfs on private courses while people like Jen Singer turn the heat down and only buy bacon when it’s on sale.
Not to mention takes 13 vacations per term, and maximally lavish. Some say that presidents never actually vacation. Judging from the cost of Obama's vacations, I'd say that is false.

Coincidentally, this data from Joel Kotkin:
The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status. This process, which has been going on intermittently since the 1970s, has worsened considerably over the past five years, and threatens to turn this century into one marked by downward mobility.

The decline has less to do with the power of the “one percent” per se than with the drying up of opportunity amid what is seen on Wall Street and in the White House as a sustained recovery. Despite President Obama’s rhetorical devotion to reducing inequality, it has widened significantly under his watch. Not only did the income of the middle 60% of households drop between 2010 and 2012 while that of the top 20% rose, the income of the middle 60% declined by a greater percentage than the poorest quintile. The middle 60% of earners’ share of the national pie has fallen from 53% in 1970 to 45% in 2012.

This group, what I call the yeoman class — the small business owners, the suburban homeowners , the family farmers or skilled construction tradespeople– is increasingly endangered. Once the dominant class in America, it is clearly shrinking: In the four decades since 1971 the percentage of Americans earning between two-thirds and twice the national median income has dropped from 61% to 51% of the population, according to Pew.

Roughly one in three people born into middle class-households , those between the 30th and 70th percentiles of income, now fall out of that status as adults.

[emphasis added]


Robert Coble said...

"Food prices soar as incomes stand still"

My college statistics course used the following little book:

How To Lie With Statistics
Darrell Huff
Copyright 1954
W. W. Norton & Company
ISBN 978-0-393-31072-6

"While the government says prices are up 6.4 percent since 2011..."

Obviously (although explicitly unstated), this is an average (mean) of all prices. It has as much real significance as the statistic that "The average American family has 2.3 kids." (What DO you do with 0.3 kid?!?)

Our government at its statistical finest in projections:

"The U.S. Department
of Agriculture (USDA) projects that annual U.S. food price inflation will be in the 2.5% to 3.5% range in 2012 and from 3% to 4% in 2013.

Consumers and Food Price Inflation
Randy Schnepf
Specialist in Agricultural Policy
September 13, 2013

Moving on:

"Median income is up only 1 percent a year."

Note the "bait and switch": prices are based on the average, but income is based on the median (a value or quantity lying at the midpoint of a frequency distribution of observed values or quantities, such that there is an equal probability of falling above or below it).

Questions immediately come to mind.

(1) Why use two different statistical measures for prices and income?

(2) Is this partisan shilling for the arbitrary raising of the minimum wage?

After viewing the article and the accompanying photos, I'm left wondering at the "struggle" of Ms. Singer as a professional writer to put basic staples on the table. Described as "the mother of two teenage boys," (coupled with no mention of a Mr. Singer), perhaps we can statistically presume that Mr. Singer is no longer part of the household. Perhaps he doesn't contribute toward the family budget. So let's assume that Ms. Singer is single or divorced, valiantly providing for her family herself.

The 2012 median income (to compare apples to apples with the article) for writers is $55,940 per year ($26.89 per hour), according to the US Dept. of Labor. (Link:

Observing the kitchen in the photos, with a large space, oak wood cabinets, a built-in microwave, and a smooth surface stove, one gets the general impression that the Singers are not exactly living at the official US poverty level.

Note that we can infer NOTHING from the DOL "median" income for writers regarding Ms. Singer's actual income level. However, the amenities displayed in her kitchen would suggest that she is not on the bottom end of the scale.

(I'm always puzzled by "news stories" about impoverished people, which has accompanying photos or videos showing various amenities like 45" plasma TVs, stereos, game machines, in short, every electronic gadget known to mankind, and yet the family is the epitome of poverty.)

Slogan: "Come Home To CBS News." (2013–present) PLEASE! We are falling in the ratings almost as fast as MSNBC!

(I'm in a curmudgeonly mood today.)

Robert Coble said...

Re: the Addendum:

Bourgeois: the middle class, typically with reference to its perceived materialistic values or conventional attitudes.

Proletariat: (in Marxist theory) the class of workers, especially industrial wage earners, who do not possess capital or property and must sell their labor to survive.


"The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status."

Could there possibly be a concerted effort on the part of the US government to remove the hated Bourgeoisie by converting them into Proletariats, all in the name of "equality of outcome"?

Say it ain't so!!!!!

Robert Coble said...

From Dr. Thomas Sowell:


"Those "social scientists," journalists and others who are committed to the theory that social barriers keep people down often cite statistics showing that the top income brackets receive a disproportionate and growing share of the country's income.

"But the very opposite conclusion arises in studies that follow actual flesh-and-blood individuals over time, most of whom move up across the various income brackets with the passing years. Most working Americans who were initially in the bottom 20 percent of income-earners, rise out of that bottom 20 percent. More of them end up in the top 20 percent than remain in the bottom 20 percent.

"People who were initially in the bottom 20 percent in income have had the highest rate of increase in their incomes, while those who were initially in the top 20 percent have had the lowest. This is the direct opposite of the pattern found when following income brackets over time, rather than following individual people.

"Most of the media publicize what is happening to the statistical brackets — especially that "top one percent" — rather than what is happening to individual people.

"We should be concerned with the economic fate of flesh-and-blood human beings, not waxing indignant over the fate of abstract statistical brackets. Unless, of course, we are hustling for an expansion of the welfare state."

I'll shut up now...