Orwellian Inflation Reporting

I have been racking my brain, trying to figure out why, oh WHY my finances seem to be in worse and worse shape. I have felt this slow, insidious drain from my pocketbook, yet the snapshot inflation numbers that are released as headlines tell me things are fine: inflation is just 2% over the decade or 3% over the last year, or heck, even a cheery 0% reported just last week. I should feel bolstered by this news, but I don't, I just feel befuddled. The whole business of inflation reporting seems rather Orwellian. All I hear from people around me is how inflation is low!

The truth is, it's not and I've been pulling my hair out, trying to tell people that, "No, it's not at 2% or 3%...depending on the item, it could be 10% or 22%!" They just look at me like I'm crazy and wrong, because they heard on news inflation was low. So they just believe it and don't bother to look up the super simple to verify information for themselves! Ugh. Boo.

Now, there are all kinds of ways to report inflation, and oodles of easy-to-find, free information available. A quick trip to BLS.gov shows that it's not so tough for the average Joe to look up inflation rates broken down by various items, excluding others, etc. In fact, the redesign of the CPI press releases slated for April of 2012 look promising in terms of readability as well as new interpretations of the information. But getting there requires knowledge that the information exists, as well as a little patience and confidence digging through the data.

But if there is a reason you should feel a bit more cheery, it's because I dug through the data on your behalf. My husband even drew up this nifty little infographic for you to meme about Facebook if you are so inclined towards truth-spreading. No copyright infringement here - I give you "Teh Permission" though links are appreciated.

Let's dig a little deeper into the numbers:

Inflation increases since a year ago (Dec 2010-2011) US City Average All Consumers. As you read, ask yourself how much you buy that particular item. Also, since I live in Michigan, I included some Midwest figures as well:

• Food at Home up 6% 
• Food away from Home up only 2.3% 
• Cereals/Baked Goods up 6.1% 
• White flour up 15.6% (Midwest up 22%)
• Whole wheat bread up 10.3%
• Chocolate chip cookies up 7%
• Meat/poultry/fish/eggs up 7.9% 
• Ground beef up 22.8% (Midwest up 15.9%)
• Sirloin steak up 14.9% 
• Bacon up 9.4% (Midwest up 26.2%)
• Bologna down -11.3% (lol!)
• Chicken up 4.7% (Midwest 16.5%)
• Dairy products up 8.1% 
• Whole milk up 7.4%
• Cheddar cheese up 10.1%
• Ice cream up 14.6%
• Fruits and vegetables up 2.3% 
• Apples up 5.9% (Midwest up 15.1% - huh? We're the apple capital!)
• Potatoes up 14.1%
• Sugar and sweets up 3.8% 
• Sugar up 9.3%
• Fats and oils up 13.5% 
• Household fuel oil 14.3% 
• Motor fuel 10.3%
• Water/sewage/trash collection up 4.7% 
• New cars up 3% 
• Used cars/trucks up 4.2% 
• Medical care up 3.2%
• Tuition/childcare up 4.6%
• Educational books/supplies up 5.2%
• Apparel up 4.6%

Le sigh.


It bears mentioning that inflation is a tax. It's an informal, approved by no one, tax. As Henry Hazlitt wrote in the great (free via Mises.org) book and here, excerpt, What You Should Know About Inflation, 

Inflation, to sum up, is the increase in the volume of money and bank credit in relation to the volume of goods. It is harmful because it depreciates the value of the monetary unit, raises everybody's cost of living, imposes what is ineffect a tax on the poorest (without exemptions) at as high a rate as the tax on the richest, wipes out the value of past savings, discourages future savings, redistributes wealth and income wantonly, encourages and rewards speculation andgambling at the expense of thrift and work, undermines confidence in the justice of a free enterprise system, and corrupts public and private morals.