Why is it that the idiots always think they’re the smart ones?
New York Fed President William Dudley got p0wnd by the crowd in Queens when he went down to explain the economy to the rubes. Too bad the “rubes” weren’t falling for it.
The former Goldman Sachs chief economist gave a speech explaining the economy’s progress and the Fed’s successes, but come question time the main thing the crowd wanted to know was why they’re paying so much more for food and gas. Keep in mind the Fed doesn’t think food and gas prices matter to its policy calculations because they aren’t part of “core” inflation.
So Mr. Dudley tried to explain that other prices are falling. “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he said. “You have to look at the prices of all things.”
Reuters reports that this “prompted guffaws and widespread murmuring from the audience,” with someone quipping, “I can’t eat an iPad.” Another attendee asked, “When was the last time, sir, that you went grocery shopping?”
And that explains one of the key failings of the Fed. The two necessities in life, food and energy, are experiencing tremendous inflation. But the Fed’s inflation model ignores those things.
How stupid do you have to be to think people don’t need to eat or drive?
I feel honor-bound to re-post the following:
http://theoatmeal.com/comics/apple
Well, when you’re not buying food or gas (somebody does it for you), you don’t think about it… sigh…
Oh they know . You are just not supposed to notice the shell game . Be a good boy and go back to dancing with shitheads and other important matters now .
Pingback: Quote of the Day–Alan Andrews (03/20/2011) | The Minuteman
Well, the original idea kind of made sense. Food and oil are subject to big price swings as a result of supply shocks. The Fed does monetary policy, which has nothing to do with supply shocks. It’s quite possible for the prices of food and oil to distort the statistics on price inflation, if their prices aren’t a result of monetary policy.
On the other hand, when their prices _are_ the result of monetary policy, leaving them out can mean missing the obvious. And including things like electronics, which have been in permanent-price-deflation mode for decades (thanks to Moore’s Law, which _also_ has nothing to do with monetary policy) just distorts things even further.