To get a more accurate picture of real CPI, you would be better off with 5 CPI’s, each one representing the basket of goods that each income quintile group consumes.

This would likely show that the lower income groups are experiencing very high inflation, while the top earning groups inflation is relatively modest.

In my opinion, I feel that the loss in purchasing power that poor people are experiencing today is the result of government handouts.

If it is true in life that there are no free lunches, then what is given with one hand, is taken away with the other. In this case, the increase in domestic spending since George Bush has come into
office has gone disproportionately to lower income families.

As a result, they have ended up paying for these programs with punishing inflation, and a loss in living standards.

Sorry about that but I was just quoting what I heard on Bloomberg and I know how much everyone here loves Bloomberg with the fancy brit accents and all.

I think mostly nobody (in the “Western world”) who isn’t independently wealthy, or a member of a really thin upper crust of professionals (e.g. corporate executives), is insulated. It’s more a matter of whether one is paying attention to what one readily sees “out there”.

I mean, it IS possible to have a stable money supply (and hence minimal monetary inflation) with rampant price inflation — all that has to happen is to destroy the currency while expanding an already huge trade deficit.

However, if this were the case, it seems strange that the economist community would not point this out. So I must be in ignorant error.

This priviledged class we call CEOs, especially in the financial sector, have demonstrated they have no special skill set. With all their knowledge, education, computer models, risk analysis, and insane salaries, they couldn’t steer a freight train down the tracks without going off the rails.

While the government is usually a convenient scape goat (and this administration is the definition of incompetent), the private sector, with their short term thinking (Hummers?) share at least half the blame for this entire mess. Makes you wonder just how high of a pain threshold and tolerance level the American public has.

At least WAGE/price inflation adjusts rapidly to the situation whereas without rising wages, rising costs destroy purchasing power slowly, destroys saving slowly, eases dept pain less rapidly, confuses the wage earner because hes not so sure about whats happening.

I call it the slow cooked frog principle.

Dump a frog in hot water and he’ll jump out. Slowly raise the heat and he’s stuperfied and won’t be able to jump out when he finally realises whats happened.

It helps if you talk to the frog telling it that the waters still just the right temperature while you slowly turn the knob.

The frog is the wage earner.

The wage earner has been cooked by Goldilocks.

mmmmmmmmmm that Goldilocks…

Point two: the illegals doing most of the construction and farm work around the country are invisible to data collection. They aren’t counted, can’t be counted, and don’t want to be counted. I live in SoCal
and the construction projects still running have no workers all of a sudden. They are manned by white and black guys working double shifts.

Not counting at least ten percent of the work force means faulty data. If inflation was derived from separate income groups and what they can afford to buy we’d have a hell of a number.

New refiners can not generate an increase in the supply of oil and lower gas prices.

Isn’t there some way to make them explain on the air how a new refinery would reduce the price of oil?