Tuesday, June 24, 2008
As a followup on my previous comments about inflation, consider Dow Chemical's announcement today that it will raise prices by up to 25% next month, following on a 20% price increase last month. For those whose math skills are shaky, that's 50% in three months (don't forget to compound!), which comes to 400% annually! Consumers won't see these price increases immediately, but rest assured that this will eventually work its way through the supply chain; manufacturers are not going to just absorb this price increase.
The unemployment rate and the annual inflation rate are sometimes added together to create what is called the "misery index". A number of news outlets have recently speculated as to why things seems so bad for most people, but the misery index, based on the "official" government numbers, is a relatively low 9.6.
The problem is that, for decades, the federal government has been gimicking both indices. For example, since the mid-1990s, the unemployment rate excludes "discouraged workers" who are no longer even looking for work. As another example of a change made in the 1990s (from ShadowStats.com):
The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.
If we use more traditional measures, unemployment is nearing 14%, inflation is nearly 12%, the misery index is 26% (far worse than the previous post-World War II record of 20.76 in 1980), and we're almost 4 years into a recession!
Making matters even worse (pointed out here), whereas in the 1970s, raises generally kept up with inflation, raises today (usually in the 2% to 4% range) clearly have not and will not.
Monday, June 23, 2008
"We have had two almost 100-year floods and two almost 500-year floods in a 35-year period," said Nicholas Pinter, a professor who specializes in flood hydrology at Southern Illinois University, Carbondale. "Flood levels all along this stretch of the Mississippi have climbed upward, not just by inches but by 8, 10, 12 feet — up to 18 feet over historical 100-year flood conditions. So the simple answer is that floods are higher and more frequent.
"But the underlying theme to everything that's going on," Dr. Pinter added, "is that the current estimates for flood frequency and intensity appear to be grossly underestimated."
Tuesday, June 17, 2008
Here's a fascinating article on how the culture of consumerism beat back the prospect of a shorter work week and more free time.
...If as a society we made a collective decision to get by on the amount we produced and consumed seventeen years ago, we could cut back from the standard forty-hour week to 5.3 hours per day—or 2.7 hours if we were willing to return to the 1948 level.
Posted by cmadler at 8:57:00 AM