When it costs more to be poor – Fed and government shifting inflation onto rent, medical care, and food. QE3 to widen the gap between the poor and the wealthy.
Inflation has been picking up since the recession ended in 2009. The problem with the CPI increasing year over year with no rise in household incomes is that the standard of living for most Americans erodes every year that incomes do not keep up. Household incomes are back to levels last seen in the mid-1990s while the cost of necessities has gone up. This brings us to our article today that examines the nuts and bolts of what constitutes the Consumer Price Index (CPI). The CPI attempts to measure the changes in price for consumer goods and services. Overall it did a very poor job of measuring the housing bubble because of the owner’s equivalent of rent metric.
Today, it is understating inflation because of the excess spending on “wants” that occurred in the 2000s has now shifted to spending on “needs” but is being dragged down by the amount of family spending on needed goods. We will dig deep into this data but suffice it to say that the Fed is creating inflation in items most Americans actually need to live their daily lives and the burden on the poor is actually increasing.
Phi Beta Iota: If President Barack Obama cannot see this and stop it, then he is either a puppet with no power, or part of the problem. The creation of the education bubble, with sub-par “paper mill” diplomas lacking in quality and higher quality degrees inflating in cost on the basis of debt growth, is a huge follow-on to the housing bubble. Candidate Romney is assuredly the worst of the two evils, but if the above story is correct, it would appear that the US public has not yet gotten the message that BOTH political parties are totally focused on their own 5% kick-backs from the 1%, rather than the public interest of the 99%. Romney 2012 so that riots in the streets produce the Electoral Reform Act of 2014? As this moment in time, it appears that the Republicans are positioned to steal the election while Wall Street offers the incumbent a very healthy parachute sending him back to Chicago if he goes quietly as Al Gore went quietly in 2000. [We notice with interest that Ron Paul has gone silent.] We at Phi Beta Iota continue to have confidence in the resilience and potential of America the Beautiful and the Average American, but lament the public remoteness from core truth that keeps them quiescent in the face of unjust tribulation.