March 24, 2014
OVERSTATING INFLATION ISN'T LYING...:
No, the government isn't lying about inflation : Conspiracy theorists gonna conspiracy theorize (John Aziz, 3/24/14, The Week)
If you're paying more for food than you used to, it's easy to worry about inflation, even if rising food and energy costs are not necessarily a sign of high inflation. While inflation has actually remained below the Federal Reserve's target of 2 percent per year, lots of people think it's much higher -- 39 percent of respondents to a Business Insider poll last year thought it was above 5 percent, for example.It's a narrative that's regularly pushed by public figures like Peter Schiff and Marc Faber (and others in what Noah Smith calls the Finance Macro Canon) on CNBC. They are critics of the Federal Reserve's bond-buying policies, and believe that such "money printing" measures will inevitably lead to high inflation, or even hyperinflation. Here's Peter Schiff last year saying that hyperinflation is already here. Here's Marc Faber in 2009 saying that the U.S. economy will experience Zimbabwe-style hyperinflation.Well, the Fed's quantitative easing program has been in place for a good five years, and we still aren't transporting our cash in wheelbarrows. It's clear that these individuals are suffering from confirmation bias -- they have a belief that massive inflation is coming, so they look for evidence of high inflation, while discarding evidence of low inflation. Since most of the evidence points to low inflation, they are prepared to allege that the government is lying.
..the government just isn't very good at measuring it.
Posted by Orrin Judd at March 24, 2014 7:42 PM
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