Thank Obama for the Ever Increasing Prices

[fskimospy]

I don't see how you can possibly say I'm cherry picking items. (I'm assuming you're referring to my post.)

Those are national averages for food items, something we all purchase all the time. I'm aware that housing prices are lower, but I haven't bought one in almost 16 yrs, nor do I expect to buy a house anytime soon.

The real question is what good is the CPI? When should it be applied?

My contention is that it has almost no relevance to the majority of people because some of the items included. I've given housing as an example, and home heating costs as another. What about clothing? That's actually gone down. But is it relevant to me? No, I purchased less than $100 of new clothing in 2011.

So, people can stand there and point to the CPI all they want, but we know what kind of price increases we are actually facing.

Fern

The CPI should always be applied, as it is the best measure of inflation we have. You are looking at highly volatile items and commodities that are heavily dependent on factors external to our economy that we cannot control. Since from a policy perspective we care about inflation only so much as we can affect it, we use the CPI that strips out the distorting effects of food, oil, and other such things.

If we didn't do this, we would end up having schizophrenic and catastrophically foolish monetary policy, furiously battling inflation that doesn't exist sometimes and being terrified of similarly illusory deflation at other times.

Inflation has been exceptionally tame over the last few years. Period.

EDIT: There's a reason why economists strip out food, oil, etc from this calculation. They aren't part of some massive conspiracy to hide inflation, they just know that those items are unreliable in measuring what we are trying to measure.

 

[Gooberlx2]

lol. go look at the 4 year trend in gas prices. Tell me if you see anything interesting about say... January 2009.

Cherry picking fail.

 

[Darwin333]

Since he dictated a moratorium on US oil drilling in the gulf of mexico, dictated that the keystone pipeline not be built, and dictated that the EPA deny all new exploration and drilling permits.

While it would be a great thing had he not done any of that the truth is they would not have affected gas prices.

 

[Darwin333]

That's because Bush was directly responsible for those things. He caused instability in the middle east by invading Iraq, then holy shit look at the oil prices go up JUST AS EVERYONE SAID THEY WOULD.

Hmm, if causing (or not preventing) instability in the ME is what you are calling the cause of oil prices going up I could make a pretty reasonable argument that Obama is just as much at fault as Bush was.

But I really don't think instability in the ME has much to do with it.

 

[Jaskalas]

Since when does Obama control the price of gasoline, beef or pork?

Deficit spending, printing money, inflation.

EDIT: There's a reason why economists strip out food, oil, etc from this calculation. They aren't part of some massive conspiracy to hide inflation, they just know that those items are unreliable in measuring what we are trying to measure.

Yes, such as anything that matters.

 

[JulesMaximus]

When Obama entered the White House in January 2009, the city average price for one gallon of regular unleaded gasoline was $1.79

What's really ironic is that 6 months before Obama took office gas prices in Washington DC were over $4.00/gallon.

 

[MomentsofSanity]

What a silly thread. Beef is up because of Obama? All over the world? It's simple supply and demand factors, not any individual. Supplies are down for a number of reasons which I'd happily list, but I doubt those placing blame would care.

 

[Fern]

What a silly thread. Beef is up because of Obama? All over the world? It's simple supply and demand factors, not any individual. Supplies are down for a number of reasons which I'd happily list, but I doubt those placing blame would care.

heres' a general definition of inflation from Wiki:

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

Therefore to me, it doesn't much matter if the price increases, or erosion in the purchasing power, is caused by the Fed printing too much money, our currency falling, bad weather or Donald Trump's hairdo. Less is costing me more (and the CPI is not an accurate reflection of that).

Fern

 

[First]

What about clothing? That's actually gone down. But is it relevant to me? No, I purchased less than $100 of new clothing in 2011.

lol.

 

[Bitek]

When Obama entered the White House in January 2009, the city average price for one gallon of regular unleaded gasoline was $1.79

What's really ironic is that 6 months before Obama took office gas prices in Washington DC were over $4.00/gallon.

JM hit on the perfect demonstration of why energy and food are stripped out of CPI. If one is going to see inflation (and not the obvious market forces) as the driver of the price increases, then you also have to accept massive deflation from July08 to Jan09, right in the middle of TARP et al. Oil fell $150 to ~$30 in six months.

What the deflationary rate there then Inflationistas? How do you explain the period of Nov06 to Jul08? The "inflation" rate was far far greater, yet the growth of the Fed's balance sheet was nothing compared to Dec08 to Jun11.

Why is the TIPS paying a negative interest rate now?

It leads you to silly conclusions. That's why its stripped out. The trend looks like a world economy on recovery with slowly increasing demand. Its clear to see the spikes and drops of the crash, BP oil spill, Europe crisis Rd 1, Japan and Libya, Europe crisis Rd 2, US downgrade etc. All market and external events and nothing to do with Obama.