Government Inertia

That the economy was going south should not have come as a surprise. Talk of the impact of the sub-prime mortgage market has been in play for at least a year. I too did not believe that this mortgage mess would have such a staggering effect on the entire economy. However, I am not an economist. Ben Bernanke is and his Federal Reserve Board should have been able to evaluate the impact. Where were the financial gurus? As recently as July 5, 2007 Bob Brinker, the leading writer of financial newsletters, was writing that he foresaw a bright future for the stock market.

Now that the nation is in this mess I expected a quick acting congress would inject money into the economy within one or two months. Instead the reports are indicating that tax rebate checks to stimulate the economy will be arriving sometime in May. That is five month from now. That is too far in the future.

The Democrats and Republicans run the government and both are failing. The evidence is obvious to me. It’s Katrina, it’s reacting to a recession, it’s protecting our nation from a terrorist invasion, and most of all it’s about making our government effective.

If there was ever a time when we needed an independent that could rise above the fray, now is the time. I don’t know if that person is Michael Bloomberg or another independent. In my view we definitely need new leadership.

CPI, Can We Believe This?

After posting this commentary on Thursday, January 10, the Associated Press publishes this article on January 16. The newly reported inflation rate is still not accurate but the trend is obvious. http://apnews.excite.com/article/20080116/D8U737180.html

Forget Core Inflation. That was an idea created by Alan Greenspan. He was wrong. The core inflation measurement ignored all the things we need to live like food and energy.

“The Consumer Price Indexes(CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services”। That is quoted from the U.S. Department of Labor that manages this program.

We really need a measurement that is reliable. I just can’t believe that the current CPI is accurate. There have been articles posted on the internet that do challenge the CPI accuracy. My own views and experiences are the bases for this opinion.

Here is four items that support my opinion.

- Thanksgiving dinners for a family of 10 were reported in the news to cost 11% more in 2007 than 2006.
-Gasoline nationwide has increased in price from $2.14 to $3.10 per gallon during the past 12 months. That is a 44.8% increase.
- Cavaretta’s is a local Italian deli that makes fabulous sandwiches. The 2007 price for their small subway style chicken sandwich was $4.50. This year the price is $5.25. A dismaying 16.7% increase.
- The price for milk at my neighborhood Trader Joe’s (actually over 1½ miles away) increased by 33%.। We buy milk there because it’s about 60% of the prices charged at the local supermarket (about ½ mile from my home).

Will the government become more accurate if there were a change in political parties? No. We all know that the information has been managed because the politicians don’t want to admit the truth.