But no one is perfect, least of all me. Every once in a while I get a powerful urge to eat greasy food. Not long ago I drove by the window of the local KFC and ordered a three-piece Kentucky Fried Chicken meal, all dark, original recipe, with coleslaw, beans and a root beer. The order came to $9.47.Let's stop here. Nine and a half bucks for a KFC meal? Seriously? KFC is a fast-food retailer. Fast food is supposed to be cheap. But $9.47 for one ordinary meal is not cheap. What's going on?
Facts such as higher KFC prices reflect the world as it is. These facts contradict recent headlines about Consumer Price Index inflation. The October CPI rose just 0.6% at an annualized rate, the lowest since records began in 1957. Bear in mind that the official scorekeeper for CPI inflation is the U.S. Department of Labor, whose head is politically appointed. At the same time the independent Federal Reserve has its own inflation target, rumored to be 1.5% to 2%.
There you have it. The Fed thinks prices are too low. It wants higher prices--$10 for a chicken dinner at KFC; $40 for a family of four.
Where, oh where, do you start with such destructive nonsense?
For one, it boggles the mind to think the Fed goes along with the Labor Department's exclusion of food and energy prices in the CPI. Good lord, people have to eat. And go places. Gas prices are certainly not cheap. They are low only compared with the summer of 2008.
But the CPI is flawed in other ways that bear no resemblance to the way people actually live. As the always savvy Scott Grannis points out in his Calafia Beach Pundit blog: "If there is any deflation out there, it can be found mainly in the energy and housing sectors, both of which experienced a huge run-up in price in the years prior to 2008. In my book that's not deflation, it's payback. Almost anywhere else you look, prices are rising."
Are you listening, Ben Bernanke? Do you actually get out in the world? The swift backlash against Bernanke's QE2 is borne out in the fact that prices, in real life, are rising faster than most people's wages. QE2 will only take us further down the stagflation path--and will hurt the poor the hardest. There are 40 million Americans already on food stamps. Higher food prices will increase that shameful number.
