Question for any of my fellow Freepers on how inflation is measured.

4-3-04

[Sir_Humphrey]

Once again, I come to my fellow freepers for advice in combatting left wing propaganda being tossed at my children by thier teachers.

Can anybody familiar with economic statistical measurements explain to me (or point me in the right direction) how the inflation rate is determined. My daughter's left wing, enviro-wacko-ponytail wearing teacher says that we are suffering from bad inflation but we don't know it beacuse all the CPI stats exclude fuel and food costs. Of course he then goes tosay this fuels the "obscene' profits from the "Bush's pupeteers, i.e. BIG OIL.

Of couse the way to combat this is by shoving pure facts in his face. It's not enough to say he's lying- I need my kids to be able to prove it. Can anyone out there help me ot help them?

[cdrw]

I'm sure others could give you a better response but ...

The CPI numbers come from the Bureau of Labor Statistics at www.bls.gov. As far as I recall, and its been a long time, the CPI number does include food and fuel and housing ... its the economists and Wall street that factor out the "volatile" components in an attempt to gauge "core" inflation. There are several other measures on inflation as well. The PPI, producer price index, measures the costs of industrial inputs like steel and other commodities on the theory that those costs cant rise for very long without companies raising prices. There is also something called the GDP price deflator that measures inflation by examining the entire output of the economy.

[Support Free Republic]

Without your donations, Free Republic would be

Doomed!

Click the photo to see the FedEx ad. FedEx is not associated with Free Republic. It's just a darn cool ad.

And FR is a darn cool site. Please consider making a donation!.

[guppy413]

Your friend is not correct. From http://www.bls.gov/cpi/cpifaq.htm#Question_7

FOOD AND BEVERAGES is clearly listed
"Gasoline" is in the TRANSPORTATION class
"Fuel oil" is in the HOUSING class

[sharktrager]

Both of the measures consist of a set of products that are called a "market basket", and are meant to reflect average purchases ofconsumers.

One interesting thing is that certain consumer products, specifically electronics, are under-represented in the opinion of many economists. This is key because these are items that have consitently gone down in price over the past 2 decades.

[janedoe1st]

For your daughter trying to counteract the lies she is receiving concerning inflation...I would highly recommend you purchase "Whatever Happened to Penny Candy?" by Richard J. Maybury (www.bluestockingpress.com>) It brings the issues down to a 'laypersons' level making it clear, informative and entertaining. Among many topics, it deals with the governments role in the boom and bust cycle. I am confident that you will arm your daughter with much ammunition to defeat this pony-tailed liberals false reasonings!

[EggsAckley]

Welcome to Free Republic.

[ETERNAL WARMING]

I suspect they stick a finger in the air. I don't know about you, but costs on everything here have gone up..yet inflation is supposedly low. It just doesn't compute.