THEY HAVE GOT TO BE KIDDING (Bogus GDP, inflation numbers)

What would you consider facts against government statistics on inflation?

Broadly speaking,

1. critique the methodology of the thing they are calculating, or (similarly) explain why you think it's measuring the wrong thing; or

2. show that the numbers they are using, or the calculations they are doing with those numbers to get their stat, are incorrect somehow.

If many people complain how food, housing, and energy prices all have gone up, and it is taken out of government statistics because those are “volatile”

Sounds like you're trying approach #1. First of all, I don't know what you mean when you imply the government "takes out" certain things "because they are volatile".

Anyway, there's one problem here, which is: Just because the price of something has risen doesn't mean it was inflation. The price of energy has risen because the price of oil has risen, because the oil markets are pricing in the risk they perceive of oil supply problems caused by geopolitics.

This price rise has nothing to do with inflation. Merely observing this price rise, you have not found evidence of inflation. Inflation is about the money supply. Somethings prices of things actually just rise for reasons of supply and demand.

So when people see a government report on inflation and "complain" about prices rising, it's not clear to me that they're separating (a) supply-demand price rises from (b) actual inflation. Actually, it's clear to me that they aren't.

Anyway, the crazy thing here is that all you people are arguing "but prices have gone up so there must have been inflation!" when that is exactly what the government statistic says. The government statistic shows POSITIVE INFLATION. An astoundingly high number of people here seem to think it doesn't. 0.8% is a positive number. It's not a negative number. Note the lack of minus sign. So why are people even arguing?

The only reason can be if they "feel" sure that the number itself must be bigger than 0.8%. But why? Based on what? "feeling"? "anecdote"? That is not a real quantative rebuttal. And that's what I'm saying.

and no one else takes the effort to do a massive comparative consumer price survey,

I'm pretty sure there are several groups that try to do massive comparative consumer price surveys. Pick one to your liking. The subject bores me too much to delve into it too deeply.

then do you just trust the government because they supposedly have the best data?

For the zillion and first time, I don't "trust" the government. I am just identifying poor counterarguments.

Let's get something straight: I really don't care what the inflation number is. Seriously. Nor do I care if it is accurate. I mean, if it's "really" 3% and the government statistic is reported as 1% - or vice versa - I still don't care. Why would I care? Why do you? Why is it important?

Let's imagine that all of you proved your case that Yes, indeed, the inflation number in 2007Q3 "wasn't really" 0.8%, it was - oh, I don't know - 10.7%. Then what? What would you have proved? What would you have accomplished? Would it make you happy? Why?

Are you all senior citizens living on CPI-linked annuities or something? I mean really, I've never seen such a devoted, motivated constituency for Insisting That Inflation Was Bigger Than The Government Number.

All of which would be fine, I guess, if you actually had real arguments. Only thing is, you don't.

The tuna can thing-real legwork involved there. Go to a store, any store, buy a can of tuna, any brand. You will almost certainly find it half filled with oil or water as opposed to the beforetimes when tuna cans were packed to the brim with tuna.

This is priceless. You have a story about tuna companies skimping on tuna. You have no proof for this. Instead, you insist that I buy tuna, and somehow magically compare it to "the beforetimes".

Sorry, I really don't know what your point here is. Do you?

You can not have it both ways.

Can't have what? Tuna?

You can not discount anecdotal examples no matter how numerous in favor of official government data no matter how flawed and say the government approach is somehow rational, scientific and correct.

I most certainly can. The anecdotal examples are not really all that numerous. And no one here has shown any flaw whatsoever in the government data, because no one has actually address the government data in any objective or scientific way. I doubt anyone here (including myself) has even actually looked at the government data.

Inflation is built into the very structure of the non market based economy erected by that Supreme Bolshevik, FDR.

On that we agree. Inflation at a certain pace is basically the normal state of affairs. And guess what? The government statistician agrees with you too. He reported positive inflation in 2007Q3.

And yet you're still arguing w/him. Based on nothing. (except something about tuna). Are you guys really under the impression that when the government says "inflation was 0.8%", you can say "but there was inflation!" and you're something disputing the government?

It may not be possible to find the statistics and fact based arguments you seek in what is fundamentally an irrational intellectual construct (the modern economy).

Gobbledygook.

Here's a rebuttal from another economist/analyst:

RECESSION? HELL NO, WE'RE IN A DEPRESSION Reader Shawn Mercer points to a post yesterday by Peter Schiff, a former sparring partner on CNBC's "Kudlow & Co." (hmmmm... wonder why the producer never pairs me with Peter anymore?). Shawn says, "I think our buddy Peter Schiff's head is going to explode trying to rationalize away the GDP report yesterday." Indeed. Yesterday's report showing blazing growth in the third quarter, despite a credit crisis and a housing downturn, has got to make the bears wonder what planet they've been living on. Here's Schiff's reaction. I have to say, I think in principle he makes a valid point, noting that inflation is surely underestimated in the numbers (if it were more realistically portrayed at higher levels, that would make the reported growth numbers somewhat lower). But Schiff just can't resist taking it way too far -- and being way too pompous about it.
...the government had to assume that inflation during the quarter ran at an annualized rate of .8% (that’s less than 1%). That is the lowest rate of inflation used to calculate U.S. GDP since the Eisenhower administration.
First, thanks for explaining to all the stupid people out there (perhaps he knows his audience well) that .8% is lower than 1%. But let's get our facts straight before we presume to teach the dummies what's what. It's simply not true to say it's the lowest rate since the Eisenhower administration. Let's look at the data. Lower rates occurred in the second quarters of 1962, 1997 and 1998. Data? Schiff woulud rather go with guesses. He says, "My guess is that inflation is actually running at an annualized rate closer to 10%." Such a rate applied to the GDP calculations would show the economy to be not just in a recession, but a depression. Which pretty much lines up with Schiff's prejudices, and explains his "guess."
I agree with Schiff that there is an inflation problem. And we both support Ron Paul for president. But can't he get his facts straight, and can't he tone down his end-of-the-world rhetoric a little?

Posted by Donald L. Luskin at 9:50 AM | link

I found out all I need to know about both these guys in the last paragraph. Moonbats.

And no one here has shown any flaw whatsoever in the government data, because no one has actually address the government data in any objective or scientific way. I doubt anyone here (including myself) has even actually looked at the government data.

It is impossible to address an irrational premise in an objective, scientific way. This country has lived in a fiat government scrip currency economy for nearly a century.

All the numbers generated by all the Harvard educated card carrying Bolshevik Kakistocrats are meaningless outside the universe they exist to support.

It is not unlike Church Doctrine which insists the Sun revolves around the Earth. No one can find any flaw with the reasoning of the Bishops, Cardinals and Pope because to do so would be hearsy.

If you wish to see the government data do a Google search for M1/M2 money supply. There will be at least one dot gov site with more charts and graphs than you can shake a stick at.

When the Goobermint Kakistocrats revise their numbers upward in three to six months ( and they will revise their numbers upward) you can ponder the value of an exquisitely precise barometer of real time inflation known as the can of tuna or you can debate the importance of the experts failure to accurately capture the meaning of events as they occur.

That which is unsustainable can not, by defintion, be sustained.

Make of it what you will.

Best regards,

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