The world is awash in spin, distortions and outright lies from formerly trustworthy sources like, say, media and government.
It produces a sense of strident discord between what we observe firsthand, and what the narrative makers insist is the truth. In effect, we are told that we cannot believe our lyin’ eyes.
I mention this because, even as I scribble this blog post, the wife is out shopping.
She will return home within a few hours and regale me with tales about how everything – or almost everything – she has bought now costs more than it did days, weeks, or months ago.
But, wait, didn’t our government overlords just announce today that price inflation is slowing to a mere crawl at 3.2 percent above July 2022, and up a mere two-tenths of a percent from June 2023’s numbers?
Why, yes, they did.
Based on past experience, I strongly suspect the wife’s higher figures for today’s purchases will indicate more than a trifling three percent increase, give or take.
Allow me to explain how this could be so.
I learned long ago that any resemblances between official inflation figures and my personal experience were no more then coincidental.
The folks who calculate inflation used to be limited by a basket of goods and services and if those things increased in price, inflation was reported.
Along the way, they’ve added substitution principle to the calculation. If steak is up in price, they substitute lower cost chicken or hamburger, presuming most consumers will do that and it makes it all more real world.
More cunning is the application of something called hedonic adjustments. Yes, it’s based on the same Greek word meaning related to pleasure, which gives us hedonists.
In hedonic inflation calculating – or masking – relative value is used to help wipe out the effect of cost increases on inflation numbers. For example, you buy a new computer with a faster processing speed. Even though it costs more, that increase will be formulaically reduced for inflation purposes because of presumed increases in pleasure and efficiency.
These keepers of the inflation flame will scoff at your personal experiences with vastly increased prices and ridicule them as merely anecdotal. You don’t have hedonics. You’re a mere heathen.
Another slight of hand the inflation people use, when it suits their narrative, is to emphasize core inflation. The overall inflation number often is referred to as “headline” inflation, an attempt to equate the number with the gaudy, sensational headlines one might see on the rag publications sold at checkout stations.
Core inflation excludes “volatile food and energy prices” and so often is lower than headline inflation. Apparently, there is no utility in factoring in the price of rising luxury items such as food or gasoline.
Alas, for July that typical slight of hand didn’t work. The “headline” rate was 3.2 percent, while “core” was 4.7 percent. Whoops. Better get food and energy back in the mix. Pronto.
Funny, I didn’t hear a single media or government type stress today how that core inflation number was the truth. No, they went all giddy about the headline number, both year-over-year and month-over-month.
This legerdemain continues to be practiced for one basic reason: It works.
Too many sheeple blindly accept the statistical distortions as they rush to participate in what cynics refer to as the Barbie, Beyonce and Taylor Swift economy, a triumph of splash and gratification over value and utility.
But, make no mistake, things are costing more and the government numbers don’t fully capture those increases.
Sam Ross Jr's site 