There is a group of folks who believe that inflation is much higher than the numbers in the official reports. Paul Krugman calls them “inflation truthers.”

In the 2000s, I might have been considered part of that crowd. I recognized that inflation data wasn’t being reported accurately, and said as much. I coined the phrase “inflation ex-inflation” to show the absurdity of reporting inflation data without food and energy prices, which were rising fast then. Owner’s equivalent rent, hedonic adjustments, substitution all were rightly criticized as flaws in the consumer price index model.

The key difference between the truthers of 2010s and those of the 2000s is what each group has criticized and toward what purpose.

The 2000s truthers were critics of the inflation mathematical model used by the U.S. Bureau of Labor Statistics (more on this later); the 2010s truthers are critics of President Barack Obama, and any economic gains under his watch therefore must be the result of inflation.

Today’s truthers include the site, whose methodology was thoroughly debunked by John Aziz. Yet even conservative Ramesh Ponnuru, my colleague at Bloomberg View, has called those who believe that hyperinflation is running amok, “inflation cranks.”   Continues here


Category: Inflation, Really, really bad calls, UnGuru

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “Confessions of an Inflation Truther”

  1. wally says:

    Seems like that article is about price increases… not the same thing as inflation. If wages don’t go up, too, then price increases are just price increases. If the value of money has changed (inflation) then the numbers for everything change, not just some things.

    • ema82 says:

      As far as I understand inflation is *defined* as price increases in a chosen basket of goods and that alone. These may but not necessarily do cause a cascade of other effects such as wage increases.

      • wally says:

        So if, a year or three from now, a tighter labor market causes wage increases but increased oil supplies result in lower prices for most goods, will you say we are in deflation?
        I doubt it.

  2. DeDude says:

    I doubt Krugman was thinking about people like you who have legitimate arguments about how the CPI is calculated and how well it reflects the prices that regular consumers actually experience.

    I consider “truthers” to be people who have little or no evidence in favor of a specific conclusion and large amount of data against it – yet they outright dismiss all data against (often with elaborate evidence free conspiracy theories) and exaggerate anything in favor. They are basically ideologogs for whom the evidence is not relevant for their opinion – because it has become a “religion”.

    I have never seen you turn your back to the evidence or stop questioning your own opinions and convictions. I know “truthers” Sir – and you are not a “truther”.

  3. willid3 says:

    suspect its a lot easier to sell that inflation has gone crazy when incomes dont grow much (or your has stagnated). its also the main reason people gripe about taxes too, even when they dont change.
    though it seems that to economists unless wages go up, inflation is pretty subdued. but from others point of view. unless wages go up, any increase in any prices or costs, is inflation

  4. RW says:

    Krugman’s blog attracts truthers and trolls of other stripes but it also attracts some very smart people and a few very wise ones as well. Here is a comment on Krugman’s Always inflation somewhere post that really does bear repeating:

    Greengranny [in] Ames, IA

    An army of volunteers is now or will soon be canvassing for the upcoming election. I know I will encounter anger, and what am I to say to them? Some commenters have given me ideas.

    First, knowing that people repeat narratives they hear, from anywhere, and use terms incorrectly, I will not challenge their claims of inflation or any other gibberish I hear. I will listen. I will validate their pain, or fear, or concern without agreeing with the gibberish. Feelings are not facts– they are always valid for that individual, and acknowledging the emotions of another person is never wrong. In fact it has to be the starting place for communication.

    Then I will use David Cache’s idea of laying out an alternate narrative — jobs, infrastructure, and education. I’ll toss in some issues that resonate here like minimum wage hike and clean water protections.

    I’ll let Dr. Krugman take on the inflationistas about federal monetary policy etc. But I have to take on my neighbors.

    Most readers are unable to perceive the stress that fluctuating prices of commodities essential to life add substantially to the stress burden of the poor and working poor. It matters not to them if it evens out in six months. It is the continual need to react that wears them down. They are jumping from lily pad to lily pad trying not to sink. Middle class voters increasingly have been getting a taste of what it’s like. Conservatives intend to gain power on this misery.

    • DeDude says:

      Very much worth repeating. It could be added that the reason those people are allowed to feel so much pain from fluctuations in prices of things they need is that we are allowing the Wall Street banksters to rob everybody by rigging and gambling in those markets.

      Look at what they did with prices for cattle feed and meat. First they jammed the spread between “feeder” cattle and (slaughter ready) cattle down, at the same time they jammed the price of corn up. Now farmers could not see any profit in feeding up calfs to become ready for slaughter, farmers stopped doing that. This led to a reduced supply of beef meat and prices of every bodies steak went through the roof. In the mean time the same banisters that made these manipulations placed themselves such that they could harvest huge profits from this explosion in beef prices.

      All this price instability is the result of the fact that we allow (and fail to police) people who do not take endpoint delivery of a commodity, to speculate in it.

  5. hue says:

    why is pizza immuned from inflation? a large (outside of NYC) is still less than 20 bucks since the 1980s, are pizzerias using shadow ingredients?

  6. Low Budget Dave says:

    Part of the problem seems to come from the two different events that both use the word “inflation”.

    An increase in the supply of money is not the same thing as a decrease in quantity of good supplied at a given price. A war in Iraq, for example, does little to increase the monetary supply (unless we are silly enough to borrow money to jump in…). But it sets the stage for oil price increases, which makes the (mostly Chinese) factories less willing to supply televisions at yesterday’s price.

    I used to read ‘shadowstats’ on a regular basis, and even use some of their research in my work. Even back in the 2000′s, they held the view that much real inflation was being hidden for political purposes. (Considering how many retirement plans are tied to inflation, there may be some truth to the theory that the government under-reports inflation specifically to save on Social Security.)

    In the long run, hardly anything takes a higher toll on savings than inflation. There are a few things, of course. Failure of the government to pay its bills, for example, might qualify as “worse than inflation”.