Inflation Variability Reached All-Time High in 2009
Here's another twist to add to the inflation confusion - despite relatively low inflation in recent years, inflation variability is at an all-time high, another break from the traditional positive relationship between the level of inflation and level of inflation variability (or uncertainty). That is, low inflation is usually associated with low inflation variability, and high inflation is associated with high levels of inflation variability.
For example, the charts above show that the high levels of inflation in the 1970s and early 1980s (red lines) were associated with high levels of inflation variability (blue lines) and when inflation fell in the 1990s, it was accompanied by a fall in inflation variability. But now in recent years, we are seeing historically high levels of inflation variability associated with relatively low levels of inflation.
Note: In the top chart above, inflation uncertainty/variability (blue line) is measured with a GARCH (1,1) model and in the bottom chart inflation variability (blue line) is measured with a 12-month moving average of the standard deviation of the inflation rate. The statistical details of how to measure a time series of inflation variability aren't as important as the fact that both of these measures of inflation variability show higher levels in recent years than the previous peaks in the 1970.
So despite low levels of inflation over the last five years, inflation variability peaked in 2009 by both measures, and those historically high levels of variability might be adding to the confusion about whether we're headed for inflation or deflation. And the high levels of inflation variability might be a result of the Fed's erratic, "stop-and-go" monetary policy over the last few years.
Update: There is also some statistical support for a negative relationship between inflation variability and output growth, which could help explain why the economic recovery has been weak. That is, higher inflation variability adversely affects economic performance and leads to lower economic growth for industrial production or real GDP, ceteris paribus.
39 Comments:
My two main suppliers have had price increases of 6% and 11% in the last two months. In my case, price increases are not coming from the front end of increased demand, but from the back end at the manufacturing level.
How can you talk about CPI when the method used to calculate it keeps being changed. John Williams (at shadowstats.com) claims that the reported CPI number would be a lot higher if we used the same method as was used in the 1970s. If that is true how can we legitimately claim that the current reported CPI number can be compared to previous periods?
No conflicting signals at all. We are headed towards deflation. I am surprised that Perry makes such a elementary error in his observations.
Gold is up as buyers in India and China have increasing amounts of discretionary income, and they are savers, and they like to buy gold--a global commodity, with prices set globally--not much influenced by Federal Reserve policies.
Wheat prices are up too, and we don't assume that means an easy Fed policy.
People who talk about gold let a fetish get in the way of economic analysis. I think about sex all the time, but I try not to let it get into my economic perspectives.
On the crank John Williams--he doesn't understand basic common sense, statistics or economics.
Listen, if you follow John Williams, and the CPI is understated by 20 percent or whatever cracked-out number he is freebasing these days, then it follows that Americans actually have a living standard 20 percent lower than indicated by the current CPI.
Okay, fine, then US living standards are well below that of Western Europe, that socialized heaven, and besides that those Euro-stupids take 6 weeks off a year, and have national health care. If you believe the crackpot John Williams, then you also believe Western Europe is simply beating the pants off of the USA. Maybe they are. Maybe we should just copy Europe and be done with it.
Back to monetary policy--we are in real trouble.
The Fed, like all public and federal agencies, is heavily and expensively prosecuting the last war--that was the war on inflation. No federal agency can change its self-perceived mission without a near-collapse or complete failure first. Think of the Spanish Armada 1588.
If you doubt the incredible dullness of federal agencies (including our Pentagon, btw), keep in mind that the Bank of Japan still pettifogs about the need for price stability, despite the fact they have had no inflation for 17 years, and the stock and property markets have lost 75 percent of their value!!!!
Sadly, you have smallshot clowns like Dallas Fed President Richard Fisher sermonizing about inflation, and that the Fed can't do more (until we get a Republican president, anyway).
Fisher should read what his predecessor Bob McTeer has to say--that we are facing deflation.
Deflation here we come--and the stock and property markets will not react well.
vangel-
i agree completely. the "breakage" in the link between inflation rate and inflation variability is more likely a signal of the breakage in the CPI calculation.
using a geometric weights system will turn even random fluctuations into deflation.
for those who doubt this, try it yourself.
set up a universe of 100 commodities each priced at 1 for a basket price of 100. fluctuate the prices of the commodities randomly at 1-5% intervals but keep the overall basket price at 100. take the new prices and do the same. iterate 100 times.
now apply geometric weighting using a variety of price elasticity assumptions and see what you get.
deflation, every time despite an overall basket of identical value.
we tried this ourselves.
i understand the idea that people buy more of items that drop in price and have heard the argument that attempting to use a squares system to reflect this is an estimate of aggregate price level makes sense, but i don't buy it.
not only will you pick up more inaccuracy trying to determine the price elasticities of all the goods in the economy that you could possibly gain from moving away from a static basket, but even worse, you will miss a key issue: in many cases, prices drop because demand dropped.
assuming that we will always buy more of things whose price drops only accounts for one direction of causality. sure, we might buy chicken if it's on sale, but no amount of price drop will entice you to buy a buggy whip. you just don't need one.
one year jeans are in, the next they aren't. when they go out, people don't buy them even for less money.
certainly, there are also limitations to using a static basket approach to CPI, but they are far less than those of the current methodology.
we keep making up new excuses for the fact that inflation is not acting as it has in the past like some sort of pre-Copernican church dogmatist inventing yet another celestial sphere to explain the movement of planets in the sky rather than just accepting that the model is broken.
how badly does it need to diverge before we accept that it is the data that is bad, not that its relationship to everything has changed?
Surely though this is because inflation is low - so a shift from 1-2% is 100% increase. If they ran the numbers on the actual percentage point increase the effect would disappear, I'd suggest.
Now obvously % changes sometimes are the relevant measure, but I'm not sure about in this case, particularly because inflation is already a % change of the CPI.
Inflation Low? Get Real!
Government is lying to us. The economic statistics we look at most are unemployment, Consumer Price Index and Gross products. Having observed what we look at government seeks to manipulate those numbers. If we had honest numbers we would see unemployment is higher than reported, inflation is higher than reported and growth is lower than reported. Bill Gross reports “PIMCO calculates that without “hedonic adjustments” and similarly disinflating substitution biases, Greenspan’s favorite inflation measure, the PCE, would be between 0.5% and 1.1% higher each year since 1987. This implies as well that since inflation was higher than actually reported, that conversely, real growth must have been lower by the same amount.” Bloomberg’s John Wasik calls the U.S. consumer price index a testament to the art of economic spin. Bill Gross of Pimco calls it an “Haute Con Job.” By reducing CPI government makes the economy look better than it is, reduces cost of living payments to employees, retirees, and Social Security.
Here is a summary of the problems with the government’s numbers:
Unemployment:
• In 1961, JFK removed "discouraged workers"--those workers who had quit looking for work--from the unemployment statistic.
• Under Reagan, military service was reclassified from "not in the labor force" to "employed."
• In the 80s and 90s, Congress began loosening the standards to qualify for disability payments and people who would normally be counted as unemployed started moving in record numbers into the disability system -- a kind of invisible unemployment."
• JFK removed "discouraged workers" from unemployment rolls, but in 1994, the Clinton administration removed them from the labor rolls. As Kevin Phillips writes, "The longer-term discouraged—some 4 million U.S. adults—fell out of the main monthly tally."
• Beginning in '96, the sample for measuring unemployment dropped from 60,000 to 50,000, and a disproportionate number of the dropped households were in the inner cities.
• Birth-Death Adjustment is an artificial adjustment regarding the number of employers who have recently formed new businesses, but who have not yet been added to the Unemployment Insurance tax files.
Gross Domestic Product (GDP)
• In 1991 government starting using Gross Domestic Product GNP instead of Gross National Product because international trade made GDP look better.
• Imputed Phantom income boosters like a free-checking account.
• Birth/Death of businesses equation.
Consumer Price Index (CPI)
• Richard Nixon developed the division of “core” and “headline inflation” to hide inflation in food and energy.
• Ronald Reagan took housing out and replaced it with “Owner Equivalent Rent” to make CPI smaller than it would otherwise be.
• Product Substitution. If flank steak gets too expensive, people are assumed to shift to hamburger, but nobody is assumed to move up to filet mignon).
• Geometric Weighting. Goods and services in which costs are rising most rapidly get a lower weighting for a presumed reduction in consumption.
• Hedonic Adjustment. A computation by which additional quality is attributed to a product or service. The government says that if the quality of a product got better over the last 12 months that it didn’t really go up in price and in fact it may have actually gone down!
References:
1. Kevin Phillips “Numbers racket: Why the economy is worse than we know” at http://www.harpers.org/archive/2008/05/0082023
2. Bill Gross “Haute Con Job” at http://www.pimco.com/Pages/IO_Oct_2004.aspx
3. Bill Gross “Con Job Redux” at http://www.pimco.com/Pages/IO%20Con%20job%20redux%2004.aspx
4. John F. Wasik "CPI's Lie on Household Inflation Doesn't Wash:" at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2SUCQ3Bslk0
I wonder how long it took to convince most people the earth is round, or the sun is the center of the solar system?
U.S. living standards are much higher today compared to the 1970s. Inflation has been overstated, even after adjustments (to reflect the dynamic economy).
On the crank John Williams--he doesn't understand basic common sense, statistics or economics.
Yes he does. He simply uses the same methods to calculate CPI that were used before changes were made to hide price increases and comes up with an apples to apples comparison. That comparison shows that CPI is significantly higher than has been reported, which is what the average person who eats, uses health care, buys insurance, pays tuition for his kids, etc., is finding out. While we will see price declines in bubble areas (think housing) that is what is expected.
I think that you are confused. That is why you do not pay attention to what has been happening to the gold price and are not seeing the evidence of inflation around you. The bottom line is that you live in a world that still pretends that fiat currencies can have stability and maintain purchasing power. But that world is not real.
In the real world smart people have observed the problems created by the printing presses and have learned not to trust the promises of governments that spend far too much. They will take the opportunity to move away from fiat currencies whenever they can until the fiat currencies are no longer viable.
Eventually, the average person will also figure things out. Next to last will be the 'experts' and 'intellectuals' of the old regime and their followers. And bringing up the rear will be the long discredited priests of deflation, who have been calling for a collapse in credit for decades and when they were finally proven correct found out that most of the investments that they were recommending were worthless. Schilling and Prechter come to mind.
Buy agricultural commodities. Buy cashed up energy companies that can handle volatility. Buy lots of gold and shares in gold companies that have reserves or producing assets.
The Fed, like all public and federal agencies, is heavily and expensively prosecuting the last war--that was the war on inflation. No federal agency can change its self-perceived mission without a near-collapse or complete failure first. Think of the Spanish Armada 1588.
The Fed knows that it is in the business of inflation. If it cannot keep the music playing the economy will collapse and the USD will go down with it. Keep in mind that the USD has lost around 95% of its purchasing power since the Fed was created and given the monopoly power to create money out of thin air. There is still 5% to go before the Fed is closed.
If you doubt the incredible dullness of federal agencies (including our Pentagon, btw), keep in mind that the Bank of Japan still pettifogs about the need for price stability, despite the fact they have had no inflation for 17 years, and the stock and property markets have lost 75 percent of their value!!!!
The BoJ does not want to rob its savers of all of their purchasing power. That makes sense since Japan is a savings rich nation with an old population. The US is a debtor nation so it can be much more reckless and destroy its currency much faster.
Sadly, you have smallshot clowns like Dallas Fed President Richard Fisher sermonizing about inflation, and that the Fed can't do more (until we get a Republican president, anyway).
It seems to me that Fisher gets it. For the record, I have no personal objection to the Fed destroying the currency because it would make me very rich. I simply have a moral objection to stealing savings from people who worked to accumulate them.
Deflation here we come--and the stock and property markets will not react well.
The stock and property markets should crash until the Fed jumps on the printing presses. That is why you should own gold and agricultural commodities, preferably outside of the United States.
i understand the idea that people buy more of items that drop in price and have heard the argument that attempting to use a squares system to reflect this is an estimate of aggregate price level makes sense, but i don't buy it.
Let me be clear. I agree with your argument.
But let me point out that even if we were wrong we still need to use the same method to calculate CPI as before in order to make a fair apples to apples comparison. When we do, we find that our inflation rates have been similar to the stagflationary 1970s. The Fed's 'fear' of deflation has been a smokescreen that depended on changing unit values.
Just as comparing how much our weight has changed when we keep changing the definition of a kilogram or pound makes no sense it also makes no sense to talk about CPI when the definition has been changed.
U.S. living standards are much higher today compared to the 1970s.
Yes they are.
Inflation has been overstated, even after adjustments (to reflect the dynamic economy).
Nonsense. The data says otherwise.
vangel-
absolutely. clearly, no matter what anyone says, the data today is not comparable to the data from the past.
i have long found it outrageous that even if they did change the methodology that they did not go back and apply it retrospectively to at least allow for comparability.
it's clear that the clinton/grrenspan adjustment caused a massive divergence of reported CPI from what the previous calculation would have shown. from 1992 to 2006 the series actually diverged in direction with traditional CPI trending up for those 15 years and new CPI trending down.
when a data series changes shape radically around a data splice, any remotely competent scientist or statistician will look for data integrity/comparability issues.
this seems such a rudimentary statistical error that it can only have been deliberate. the parallels with the mann "hockey stick" used so duplicitously in global warming that likewise has such splice issues are quite strong.
both make claims about the current period being different from the past and use as evidence the change in data resulting from a change in collection/calculation methodology. mann has been ripped to shreds by every impartial group of statisticians that has looked at the data. what is it going to take to do the same to CPI? it is already widely disbelieved around wall st, but is still being sold to a credulous public to support ruinous monetary policy.
v-
also, fwiw - i was agreeing with you. the "you" in the second part of my post was intended to mean "one" not you in particular.
sorry if you thought i was trying to attribute that argument about squares weighting to you. i wasn't, but see how the way it was written may have been confusing.
"Update: There is also some statistical support for a negative relationship between inflation variability and output growth, which could help explain why the economic recovery has been weak."
Professor, i don't understand that statement. Is it possible to elucidate somewhat.
buddy-
first let me enter the caveat that correlation is not causality, and that just because 2 things tend to occur together does not mean that one causes the other, but i'll take a stab at how increased volatility in price levels could impede output.
producers of goods and services invest in their businesses and produce goods and services based on their estimates of the future. if future prices of both inputs and finished goods are difficult to predict, then they become less certain about the future and therefore less likely to invest heavily and increase output. that would tend to slow growth or even cause contraction if the uncertainty were severe enough.
Morganivich-
Okay, let's buy your argument.
Then, are you saying that real US wages have fallen 20-30 percent since the 1980s?
Whiel real living standards have been rising in Europe?
And in Europe they get 6 weeks off a year?
morganovich, thanks for your explanation.
benny-
where are you getting a 20-30% number and are you including benefits like pension, 401k, health, etc in real compensation?
the story of the last 20 years has been a shift from cash payments to tax advantaged benefits.
claims that real wages are not up much fall flat when you look at total comp as opposed to just cash.
that said, i don't think they are up a ton using real inflation. our growth has been less impressive as well. but i have no idea how you are getting to your numbers.
for clarification:
when i made reference to real wages claims, i meant those calculated with the BLS numbers.
using the pre 1990 BLS methodology, yes, real wages have been much more stagnant just as real GDP growth has.
we bought a great deal of "standard of living" by running up massive debts. 1992 to 2000 saw a 300-400% increase in consumer credit (up around $2tn) and after the 2000 crash, the ludicrously loose money drove double digit annual increases in mortgage debt through 2006. 13% annual increases in debt drives lots of consumption, but it's not real or sustainable.
http://www.gpoaccess.gov/eop/2010/B47.xls
Morgan-
According to the chart above, average weekly earnings are well down from 1960s levels--and you suggest they are actually even farther down.
Additionally, more and more employers are wiping out the health care benefit.
It seems like workers in America are taking a stiff one in the spanker, if what you say abut the CPI is true.
benny-
that's just cash, not all in. leaving out stock options, benefits, etc that have been a bigger part of comp misses an awful lot of where income increases come from.
you are completely missing the argument.
consider the last decade. you think we are earning more and are better off now than in 2000?
fat chance.
If inflation has been understated, then real GDP has been overstated, perhaps to the level where real GDP has been negative.
I doubt anyone really believes we've been in recession from 1982-07. It's more likely 1982-07 was one of the greatest economic booms in U.S. history.
Morganovich says: "we bought a great deal of "standard of living" by running up massive debts."
That's called spending, which actually raises living standards. Falling or low prices induce demand.
You're more likely to spend when there's a bargain, and if there isn't one, you're more likely to save (like the Japanese). I stated before:
Just like the volume of output in itself will cause declining prices and induce demand, the volume of capital will in itself cause interest rates to fall and induce demand. The gains of U.S. assets increased faster than the gains of U.S. liabilities. Similarly, the increases in U.S. output exceeded the rises in U.S. inflation, which induced demand and raised living standards.
Peak Trader is right, 1982 through 1999 was a great boom, and incomes rose.
Using the dunce John Williams measure of inflation, it was period of great reversals in living standards.
Antique CPI measurement norms are not valid today.
Sheesh, I just bought an LED flashlight with lithium batteries. It is amazing! And cheap! And bright!
I can remember not being allowed to use the family flashlight as a youth. If you left it on for a moment too long, you were chided. Big batteries were loaded into the shiny metal cylinder with great solemnity. It was to be used only in emergenecies, or if my afther wanted to investigate mysterious noises in the dark.
Now I can wear an LED on my forehead, and it costs $3 at Home Depot.
benji-
as ever, your comments are uninformed. as i've already had this conversation with you several times and you lost those arguments just as thoroughly, i give up on you.
peak-
i think it's worth breaking the 82-07 period into 2 segments. first, it wasn't until clinton that CPI changed it's calculation, so we can leave 82-92ish alone.
then from 92-2000, we likely saw some real growth in all in comp, though perhaps not so much in cash comp. from 2000 on, no.
that was never a real recovery. the "bargains" you cite were all on cost of capital, not goods.
if you spend more than you earn (and produce) you ought to get inflation. you can borrow, but that's not "real" growth. it's temporally displaced growth and has to be paid back with interest.
are you going to argue that wages and overall wealth are better than a decade ago?
no matter what you think, no one can argue that pre and post 1992 CPI (and therefore real GDP) are not comparable. it's apples and oranges. change the methodology, change the result.
comparisons across data splices are treacherous at best and more often flat out misleading.
the simple fact is that 3% real gdp growth does not mean what it used to because neither does 3% inflation.
they refer to different underlying changes. alternatively, the same changes now would yield different numbers then.
this is rudimentary statistics. if you recalibrate a thermometer and what was 70 degrees now reads 60, you cannot compare the raw data from before with what you get now.
this is precisely what was done with CPI.
Morganovich, the short answer is 2002-07 was the steepest rise in U.S. living standards since 1982, and it was mostly paid for by export-led economies. The U.S. not only had great efficiencies in consumption, but also in production.
To use your analogy, when a thermometer is wrong and gets worse, then it's broken and either needs to be fixed or replaced.
how do you figure that 2000-7 was the steepest rise in us living standards?
and what effect do several trillion in debt have on that?
are we better off now than in 2000?
in 2000, money supply was growing as rapidly as in the peak years of the 70's inflation, yet you claim we had an decline in CPI? that doesn't strike you are implausible?
no matter what, CPI simply does not mean what it used to. therefore, we need to treat the output differently or learn different lessons from past relationships.
isn't it interesting how money supply growth has decoupled from reported CPI? why do you think that is?
Here is the Average Weekly Wages from 1947 to 2000 in 1982 dollars. I am not seeing any significant increase after 1973.
Year Real weekly wages
1947 $196.47
1948 196.00
1949 202.58
1950 212.52
1951 215.09
1952 219.75
1953 229.35
1954 231.25
1955 243.6
1956 250.85
1957 251.13
1958 250.27
1959 260.86
1960 261.92
1961 265.59
1962 273.6
1963 278.18
1964 283.63
1965 291.9
1966 294.11
1967 293.49
1968 298.42
1969 300.81
1970 298.08
1971 303.12
1972 315.44
1973 315.38
1974 302.27
1975 293.06
1976 297.37
1977 300.96
1978 300.89
1979 291.66
1980 274.65
1981 270.63
1982 267.26
1983 272.52
1984 274.73
1985 271.16
1986 271.94
1987 269.16
1988 266.79
1989 264.22
1990 259.47
1991 255.4
1992 254.99
1993 254.87
1994 256.73
1995 255.07
1996 255.73
1997 261.31
1998 268.32
1999 271.25
2000 271.96
Morganovich, the country is better off when there's 6% nominal annual growth (or 3 1/2% real growth and 2 1/2% inflation), and there's 6% annual trade deficits (where the U.S. captured increasingly greater gains-in-trade, e.g. because of diminishing U.S. marginal utility).
If there was enough liquidity, the steep rise in U.S. living standards over much of the 2000s, that was generated on both the production and consumption sides, would've continued, although we would've shifted more into production than consumption through faster export growth than import growth or through export-led economies slowing.
Global imbalances would've corrected through inflation, interest rates, and currency exchange rates (and even foreigners in export-led economies moving to the U.S.), while the U.S. continued to consume more than produce and produce near full employment.
both make claims about the current period being different from the past and use as evidence the change in data resulting from a change in collection/calculation methodology. mann has been ripped to shreds by every impartial group of statisticians that has looked at the data. what is it going to take to do the same to CPI? it is already widely disbelieved around wall st, but is still being sold to a credulous public to support ruinous monetary policy.
On that note, I hope that you have seen the latest paper on the Hockey Stick issue in the Annals of Applied Statistics. McShane and Wyne show that that the MBH98/MBH99 proxies are producing worse predictions than the random data the authors used.
In this paper, we assess the reliability of such reconstructions and
their statistical significance against various null models. We find that
the proxies do not predict temperature significantly better than random
series generated independently of temperature. Furthermore, various
model specifications that perform similarly at predicting temperature
produce extremely different historical backcasts. Finally, the
proxies seem unable to forecast the high levels of and sharp run-up in
temperature in the 1990s either in-sample or from contiguous holdout
blocks, thus casting doubt on their ability to predict such phenomena
if in fact they occurred several hundred years ago.
http://tinyurl.com/2vqd9er
Sadly, manipulating data to promote a political view is quite common these days.
"producers of goods and services invest in their businesses and produce goods and services based on their estimates of the future. if future prices of both inputs and finished goods are difficult to predict, then they become less certain about the future and therefore less likely to invest heavily and increase output. that would tend to slow growth or even cause contraction if the uncertainty were severe enough."
The explanation is a good one but you may want to consider the Mises house builder analogy as well.
Imagine a master builder who has at his disposal the labor of many workers, as well as an inventory of a fixed amount of raw materials. Imagine that the individual in charge of keeping track of the available supply of material inflates the number of bricks by 15%. Our master builder creates the blueprints for the house, assuming that the inflated number is correct. The error means that the master planner does not understand that his building plan is not sustainable.
When the Fed keeps injecting liquidity in the system it sends a false signal to producers, who assume that the low rates are due to savings. Like out master builder, they assume that there are more materials available than they really are. Prices for inputs into the production process explode and make their way into the CPI readings. When a contraction occurs the excess supply of produced goods leads to a rapid decline in prices, that also shows up. But given the impossibility of sustaining the planned activity, producers are quick to cancel projects and reductions of output are very common. That causes prices to go up again and some of it shows up in the CPI reports.
james-
you are leaving out increases in benefits and a shift of compensation to stock options etc.
peak-
why do you believe that living standards are currently higher than in 1999-2000?
vangel-
i did see that. amazing that such a fraud has been so successful. what it really comes down to is that very, very few people actually understand statistics.
mann's intital team did not have a single statistician on it.
this is another good discussion:
http://wattsupwiththat.com/2009/03/18/steve-mcintyres-iccc09-presentation-with-notes/#more-6315
the really interesting fact is that the individual proxies do not exhibit a hockey stick shape, but when they are combined, they do implying that the jump is predominantly an artifact of data handling.
the analogy to CPI is quite precise. overweight that data you want, underweight the data you don't, and you get the shape you want. the issue comes when it goes on too long and now we are seeing "deflation risk" that would have been called 4%+ inflation in the 80's.
from this morning's PPI release:
"On an unadjusted basis, prices for finished goods advanced 4.2 percent for the 12 months ended July 2010, their ninth consecutive 12-month increase."
that doesn't sound like deflation to me...
Morganovich said...
"i did see that. amazing that such a fraud has been so successful. what it really comes down to is that very, very few people actually understand statistics."
That and the fact that we used to believe "experts" and self proclaimed "smart people" to be honest, and expected them to tell us the truth. That has changed; a GOOD thing, IMHO.
ron-
i suspect that the IPCC and others (giss, hadley) are a simple demonstration of the fact that if you create agencies whose budgets depend on their being a crisis, they will tell you there is a crisis every time.
when's the last time you saw this press release?
"the working group empaneled to study the crisis has determined that, in fact, there is no crisis. as such, we are returning the unused portion of the funds allotted and will go find something useful to do with ourselves."
"the working group empaneled to study the crisis has determined that, in fact, there is no crisis. as such, we are returning the unused portion of the funds allotted and will go find something useful to do with ourselves."
I have to admit, right here in your comment is the first time I've ever seen anything remotely like this. :-)
VangelV, thanks for the link to the McShane and Wyne paper as I hadn't seen it.
In truth, I haven't been following this subject as closely lately as in the past, as the hoax seems so thoroughly discredited. Mann's hockey stick has been so completely and repeatedly debunked, I wasn't aware anyone was still doing so.
Morganovich,
Increase in benefits??? Companies are taking away benefits and passing the cost of those they keep to the employee. The only increase in benefits are inflation. There is no net extra benefit to the worker.
Stock options came as a no cost to the firm compensation for deleting defined benefit retirement plans and change them into a defined contribution plans.
In 1992 I put $2000 in the stock market for my grandson to go to college with. At one time it was worth $9000. He is going to college this fall so I gave him the balance of the account $1400. Three stock market crashes took a toll.
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