> Alan Rudy wrote:
>
> > it pulls out the CPI but then ties all sorts of things not measured by
> the
> > CPI to the Fed's purported mis-reading of it and its meaning,
>
> *************************************
>
> On which commodities have prices deflated in the USA, other than the prices
> of various labour powers?
>
> SS recipients need to know, as their payments are tied to the CPI and they
> won't be getting an increase again this year, zero, just like last year. I
> can't think of one thing I purchase which has gone down in price from the
> dreaded 'deflation' while I can think of plenty of things which have
> increased in price.
>
> Just asking,
> Mike B)
>
> I didn't say prices weren't going up. I did say two things: 1) that CPI
was an outdated lame ass measure (or at least I said it in one of the
comments I made on one of the many places I saw this meme spread - if not
here, mea culpa) - but the fact that the CPI is a lame ass measure is not an
excuse to tie all sorts of things not measured by the CPI to the CPI in an
argument rooted in claims about the CPI... the point would have been better
made had they just said that pretty much everything important to folks is
going up but the gov't either doesn't measure, mismeasures or misunderstands
the meaning of things (at least in part) because of the way they reify their
own mismeasurements... and I said that 2) the Fed is NOT arguing that there
is deflation, they are worried that there will be deflation and they say
they are trying to forestall it.
My point was that the piece was making a lousy ideological argument, not that the Fed and the government are doing a good or just job. And this is why I ended the comment with a rejection of the idea that the enemy of my enemy is my friend argument implicit in the willingness of folks who can't stand right wing anti-government libertarians spreading this right wing anti-government meme.
Last, I guess some of a reasoned response to your question would depend on how deflated is operationalized... it seems pretty clear to me that auto company sales are being led by loss leaders, special pricing, etc., which they can weather because of how they've thrashed wages and benefits but which they probably can't withstand over the long haul... I'm no expert on this by any means but I'd imagine that while consumer goods deflation is a concern of the Feds their real concern is the deflation of capital goods and the multiplier effects that'd have in terms of investments, innovation, etc. and I think that this may be the case even if I don't agree with the Fed's position.