I'm going broke because I only got a 5% raise this year
Posted by aogSunday, 18 December 2005 at 23:58 TrackBack Ping URL

An associate sent me “this article” with the headline “Despite what you hear, inflation is growing”. It definitely makes a nice contrast with Orrin Judd’s claim that nothing costs more than it used to.

As I expected from the start, Judd was right and the article bogus. It’s got enough errors to pick over for a long time, but I’ll just focus on the two big ones.

FIrst, it describes the impending implosion of the economy not because consumer spending is down, but because it is not growing as fast as it did the last few year. So, a realistic headline would be “Retailers see only moderate growth in sales this year” but the article tries to spin this as bad news. Note that I don’t get the data about sales increasing from other sources, but from the article itself. Normally I’d put this down to BDS but I suspect that the author seriously lacking in clue and desparate to find a contrarian angle to bring in the readers. It is also probably partially the result of the standard liberal bias, where the economy simply must be about to crash because there’s a Republican in the White House.

The other major flaw is the emphasis on inflation. In real life, the primary cause of inflation is too many dollars chasing too many goods. In other words, when sales outstrip supply. The article, of course, is playing up exactly the opposite, too few dollars chasing too many goods. This is of course the classic scenario for deflation, ala the Great Depression.

There was some more of the article after that, but I figured I would benefit more from ranting here than trying to parse the comments of somewhat that confused.

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