It was consumer price index (CPI) day again on Dec. 12, that moment when the whole world awaits the great announcement by the Bureau of Labor Statistics concerning how much inflation went up the previous month. For two years now, we’ve heard how inflation is gradually going away and therefore, we really should stop concerning ourselves with it.
The big number came in at 3.1 percent for the year. It’s 50 percent above the Fed’s target. That’s terrible, but psychologically, it’s better than it used to be. Therefore, we are encouraged to think that the great problem is in the past. Surely life is headed in the right direction, so just relax.
The producer price index released on Dec. 13 caused celebration, but it’s not clear why. Food was up by 0.6 percent for the month and energy was down by 1.2 percent, while removing both leaves 0.2 percent, which is roughly in line with what we’ve experienced for a full year.
Clever, isn’t it? As if we can get by without buying things. This is the ultimate reductio ad absurdum of the Great Reset: Just be super-poor and then you won’t notice that you’re getting poorer.
Everything about our experience with the official messaging on inflation is contradicted by the reality on the ground. Sticker shock is a daily occurrence. Shopping used to be a joy, but now we approach it with dread. Rolling through the front door of grocery stores increases the heart rate, and we dread that final tab as we bag the groceries. It always causes us to gasp.
We remember only a few years ago how the same grocery haul was far less than what we pay today; restaurants are another matter entirely. The final tab is so painful that we can only hope that the craft cocktails were strong enough to take away the pain.
But price increases astonish us at every turn. That’s because we don’t buy everything we consume every day. Sometimes, it’s once every few months. Other times, it’s once every few years. Other times, it’s unpredictable what expenses we'll face. We try to save money as best we can, but we also have to live.
• Fresh biscuits, rolls, muffins: 5.9 percent • Fresh sweet rolls and donuts: 5.6 percent • Crackers, bread, and cracker products: 6.5 percent • Uncooked ground beef: 7.2 percent • Uncooked beef roast: 12.5 percent • Uncooked beef steaks: 9.1 percent • Uncooked veal: 7.4 percent • Frozen vegetables: 6.1 percent • Non-carbonated juices: 18.6 percent • Sugar: 6.8 percent • Candy and chewing gum: 6.2 percent • Peanut butter: 6.5 percent • Sauces and gravies: 8 percent • Baby food and formula: 7.6 percent • Food from vending machines: 14.6 percent • Food away from home: 7.6 percent • Men’s shirts: 4.6 percent • Medicinal drugs: 5 percent • Non-prescription drugs: 7.8 percent • Pet food: 5.6 percent • Photographic equipment: 10.1 percent • Sewing machines and fabric: 11 percent • Tobacco and smoking products: 7.7 percent • Hair products: 5.7 percent • Rent: 6.9 percent • Trash collection: 6.7 percent • Out-patient hospital services: 7.3 percent • Motor vehicle repair: 12.7 percent • Motor vehicle insurance: 19.2 percent • Veterinary services: 9 percent • Admission to sporting events: 16.4 percent • Fees for lessons: 7.4 percent • Laundry and dry cleaning: 5.2 percent • Financial services: 5.4 percent • Tax preparation: 8.3 percent
Again, this is what the official data reports. How in the heck do they squeeze 3.1 percent out of this? It’s all about the way the data is weighted. So if gasoline or natural gas falls dramatically, that brings down the average of everything. Or say the government can conjure up a huge fall in something as strange as payments of health insurance to institutions—which have fallen in a huge way—it can depress the overall index number.You see, there’s no such thing as the inflation rate. What we call that is a statistical fiction created out of models. It’s not real. It’s just a mathematical invention that you don’t experience. The prices I listed above are what you actually experience. Some are in the double digits. Remarkable, isn’t it? The mainstream news called inflation conquered and yet you’re still experiencing it as very often in the realm of double digits!
There’s no such thing as an inflation rate that rises and falls like the sea level. There are only prices of things you buy, and they change based on a multiplicity of factors. The No. 1 factor pushing them up is money creation, which has been pursued as never before in our lifetimes during the COVID-19 panic as a way of funding stimulus payments.
Only a complete idiot could have done that without knowing what the consequences would be. But among the idiot class, there were those who truly imagined that economic law had been magically repealed and that they would get away with this. They came to believe this because of some monetary razzle-dazzle imposed by Ben Bernanke back in 2008 for which he earned the Nobel Prize. He was able to drive interest rates to zero, bail out all the banks, and somehow avoid the consequences in terms of the price level.
There are technical reasons why that seemed to work. But none of them applied in 2020 and following. Since then, we’ve lived in an old-fashioned world in which there has been a direct relationship between the quantity of money and prices. We have been introduced to the realities of economic law. And the results aren’t pretty.
But let’s go back to the idea that it’s all your fault. This is the line pushed by the Atlantic. It’s a signal to the entire woke ruling class as to how to handle the messaging around the pillaging of the middle class by the Biden administration. Average people are surely not stupid enough to believe it, but maybe they don’t care. They have their line, and they’re sticking to it.
In the late 1970s, most people were utterly mystified by what was happening to them. These days, things are different. There’s widespread public knowledge of what caused this. It doesn’t appear that this time, they'll be able to get away with the pillaging without some consequence, whatever that looks like.
