Thursday, January 10, 2008

If the Bush-Republican economy has been so good to you, how come you feel so poor? Here’s America’s dirty little secret about inflation.

A little over a year ago, the Consumer Price index was 2.1%, according to the United States Bureau of Labor Statistics. That’s pretty comfortable, by any standards. The newspaper USAToday, probing the question of whether we had serious inflation, pointed out that at that rate it would take roughly 35 years for prices to double.
[Sorry, I'm having link problems. For the USAT article, cut and paste this:]

Umm, there’s a “small problem”
with those numbers

USAToday also quickly pointed to some evidence to the contrary. It tells you and me that what the Department of Commerce measures, officially, “average change over time in the prices paid by urban consumers for a market basket of consumer goods and services,” may be based on a highly fictional basket.

Or at the very least, the basket is loaded – weighted in a way that yours isn’t, resulting in a rosy glow cast over what ought to be a picture of inflationary gloom.

A tisket, a tasket, don't
trust that phony "basket"

Officially, the basket covers not only your morning corn flakes and milk, but also your clothes, rent, medical care, “apparel,” housing, transportation, and college tuition costs.

Oh yeah?

Here are some of the 20-year statistics the USAToday reporter picked up on the way to writing that inflation story:

  • College tuition: up 289.5%
  • Hospital services: up 280.4%
  • Drugs: up 177.6%
  • Medical care: up 173.5%
  • Doctor services: up 137.3%
  • Energy: up 131.9
Remember, at 2.1% prices should take 30 years, not 20 years to go up 100 percent, not 289 percent.

Now all this admittedly gets a little tricky. The 20-year time period covers the Clinton administration as well as that of two other Republicans: Ronald Reagan and the current Republican president’s Republican father, George Herbert Walker Bush. And some years have been more inflationary than others.

Nevertheless, the fact remains that the cost of living for real people – people who get sick, need to take medicine, want to send their kids to college, or who heat their homes and drive cars – is a humongous hilltop higher than the government would have you believe. And most of the inflation has been Republican inflation.

Republicans make the
situation worse

True cost of what living in America costs has been exacerbated by the reluctance of Republicans to increase the minimum wage to a living wage, to negotiate with drug companies for lower prices on behalf of Medicare and Medicaid patients, to provide full prescription drug coverage instead of the ridiculous current “doughnut hole” scheme, to support public education meaningfully, to impose really tough fuel consumption standards on car builders, and in many other ways.

What are Democrats
likely to change?

I’m not sure that even with a Democratic Congress and a Democratic President the system of measuring inflation will change significantly.

But at least we’re likelier to get affordable universal healthcare, a higher minimum wage, negotiated drug prices and other inflation-fighting tools.

Once the presidential nominees have been decided and we get into debates between the two presidential candidates, I hope somebody will be putting hard questions about the economy to both of them. And I hope the press won’t be settling for simplistic answers like, “I’ll cut taxes and that will help everybody.”

What do you think the odds of that are?

Don’t answer that.

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