Wednesday, November 17, 2010

You're not living in the Twilight Zone. Rather, your central nervous system is organizing sensory-sensual space-time data in a manner that reinforces your a priori conclusions. The alternative theory--that there is no deflation, that it would be a good thing if there were deflation, that our benevolent solons at the helm of state and their lapdog media are lying to us--is too terrifying to contemplate.

Yes, there are two-for-one deals, and three-for-a-dollar deals, and 40-percent off deals. Bargains we always have with us. Such is the nature of our (vague semblance of a) free market. Anecdotal evidence has little to do with the general price level--which is hard to measure, admittedly, but we all know exists. You want anecdotal evidence? I bought a six-pack of Sierra Nevada Pale Ale for $7.99 at Trader Joe's in Royal Oak a year ago, now it's $8.49. My employer offered fully paid family health insurance to me a year ago, starting January 1, 2011 it will charge $780 per year. A gallon of gasoline in Michigan was $2.69 a year ago, now it's $2.99.

Google "Consumer Price Index" plus "hedonic improvements." Then do the same with "changing market basket" and "core prices." Look at the adjustments made to the CPI over the years. You'll see our benevolent solons at the helm of state have tampered with the CPI to understate inflation. They've done the same with the "official" unemployment rate.

Surprisingly enough! As if they have any incentive to do such a thing!

If only there were deflation! In a reasonably free market, with a commodity-based (and therefore stable) currency, that's precisely what we would have: prices gently decreasing with increases in productivity. Even in our mixed, welfare-warfare, fascio-socialist economy, computers and electronic equipment prices have gone down in price. This is a problem? How? Don't I want my dollar to buy more?



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