Economic Data Misperceptions in Political Discourse
October 6, 2015 5:00am by
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I had to search for the Bartlett’s paper which I could not access through your site, Barry, but what a detailed coverage of the “inflationista’s” as I thnk they’re sometimes called. And also an excellent coverage of the conspiracy theorists as well…
I am not so sure it is a “conspiracy theory” as dialectical anger that there was a recovery. A good example of failing “dialects” are LFPR and EPOP rates. In reality, the speed they rose peaked in 1989. The total in 2000. During the entire 2001-07 expansions, people complained since they weren’t hitting their previous levels in 2000. The truth was, it was very difficult to do that considering the labor force had stopped growing since 2000. Even if the expansion had continued on, both those indexes probably would have started shrinking from the 89 peak. It is the way those indexes are constructed that are the problem. They don’t adjust for the labor force growing from 3% to 1% over the span.
There is no conspiracy, just dialectics and misunderstandings.
So Jim Grant want us to confuse asset inflation with consumption (consumer price) inflation. Either he is not smarter than a fifth grader or he thinks we aren’t. Consumption is an essential (70%) part of the economy, whereas asset prices have very little influence on it (as demonstrated during the 1987 crash when asset prices dropped drastically and the economy didn’t even yawn).
I have become very disillusioned / disappointed with him.
He has begun to believe his own bullshit, and thats fatal to any analyst
7 or 8 years ago I was commenting to a friend that I wouldn’t want to buy 10Y Treasuries at 4% or so — whatever they were at the time. I think about how much better off my family would be if I would just have liquidated everything and bought 30Y T’s in 2000.
Long story short — I was wrong, and it actually doesn’t kill me to look back on where I was wrong and why. I don’t understand these dead-enders and their motivations.