The Cost of Survival - Manipulating the Numbers to Save the Union

[screembloodymurder]

John Williams has made a career of correcting the governments economic statistics. If you think the booming economy passed you by, you're right. Here is an honest appraisal of where we stand.

http://www.weedenco.com/welling/lilogo.asp

"One of the prime examples of how the system has really degenerated over time is the CPI. There was a very deliberate effort in the early 1990s under the auspices of Michael Boskin, who at the time was the head of the Council of Economic Advisors, in conjunction with Alan Greenspan, who, of course, was Fed Chairman, to “fix” the CPI. The story, very simply, was that CPI was supposedly overstating inflation. The pitch was that if people go out to shop and find that buying a steak is getting expensive, they buy hamburger instead. Therefore, their cost of living is really less than it would be if they always had to buy a fixed basket of goods, which is what the CPI was originally designed to measure. That was the whole purpose of the CPI, to measure the change in the cost of a fixed basket of goods over time. You’d have a steak, a loaf of bread, a gallon of milk, whatever. You’d price them out one year and then you’d price out exactly the same goods the next year. You’d look at the difference in the cost and that was your annual rate of inflation. It was a measure of how much the cost of a consistent and constant standard of living was going up. What Boskin and Greenspan argued was, “We should allow for substitution here because people can buy hamburger instead of steak, when steak goes up." The problem is that if you allow substitutions, you aren’t measuring a constant standard of living. You’re measuring the cost of survival."

[Greyhound]

1. K&R

& bookmarked for future reference. Good Luck. :kick:

[fasttense]

2. Damn, no wonder every time I think our family finances are on the upswing

something comes along (gas prices, heating oil price, food prices, electricity rate increases) to eat them up. I feel like I'm treading water and now I know why. I couldn't understand why I was doing so poorly when the economic numbers were telling me I should be in the lap of luxury. Holly crap is all I can say.