The American Hallucination

The real election issues

The Big Picture has a very good post this AM that shows what is REALLY going on in our economy. As a former broker I can only attest to the fact that CPI, Consumer Confidence, and GDP figures have been cooked for decades, we have all known it but you can't trade on what people do not know.

• Since 2001, health premiums have risen 78%; Wages have gained 19% over the same period. CPI inflation measure? 17%.

• Housing is the single-largest expense for most Americans -- as much as a third of total cash outlays. The Labor Department's Bureau of Labor Statistics only tracks "owner's equivalent rent" (OER). Housing costs/Owners’ Equivalent Rent is 23.158% of CPI.

• During the housing boom, OFHEO had housing prices increasing 13% per year; Non-government foundations had real estate taxes increasing about 6%; Over the same period, BLS measured ‘housing cost increases’ at 4% -- about half of its actual price increases.

• Median real-estate taxes on owner-occupied housing went from $1,614 in 2005 to $1,742 in 2006, an increase of 7.93%. (That's more than double CPI inflation rate).Oh, and ‘Owners’ Equivalent Rent’ doesn’t account for real estate taxes.

A real CPI would’ve eradicated most it not all of GDP during that period. And the more realistic GDP figure would be more in line with the lack of growth in real income and ‘real’ jobs.

Go there and read it. The post is halfway down the page, titled: Bloomberg: CPI Inflation Data is a "Lie". He's hardly a Left Wing bomb thrower. The American Dream? It ain't. It's more like the American Hallucination.