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Too Many Dollars, Too Few Dollars

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What is the real rate of inflation? The official Consumer Price Index (CPI) is calculated with a basket of goods that are supposed to reflect the economy as a whole. There are over 200 categories of consumer goods that make their way into the CPI, including health care, airline travel, clothes, education, and so on. The price of this basket of goods is checked from one month to the next and it’s all added up to produce the CPI.

There is one big problem with this, however – not everyone buys the same goods. On average, over the whole economy, it’s about right. But people who have very little money don’t fly, go to the doctor as often, pay for school, and so on. Charles Gave of GaveKal Dragonomics came up with his own measure of inflation, modeled for the poor, and found some surprising results – and a correlation that spells trouble for the nation’s poor for a long time to come.

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Yellen’s Dashboard

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How will we know when the economy is turning the corner towards real growth? Everyone has their own answer, but Fed Chair Janet Yellen told us last March what she has on  her “dashboard”. As the most powerful person in the financial world, and probably the whole world, her opinion counts more than most. With the arrival of another piece of data on where we stand right now in the second quarter of 2014 (2Q14), it’s time to check in on how we’re all doin’.

What we see is that we’re making some substantial progress, but we still have an awfully long way to go before we can say we’re close to the last time everyone felt remotely flush, which is before the arrival of what Barataria calls a “Managed Depression”  at the end of year 2000.

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Suspending Disbelief

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Everyone has the experience at some time.  You’ve read a book or seen a movie that you absolutely loved, and you want to tell the world about your new obsession.  You might even know someone that you’d love to share this new world with.  So you start telling them about the intricate details of the plot and characters and after rambling on and on … and then you see their eyes slowly glaze over. What went wrong?  Often it’s that you had suspended your disbelief in something that sounds too absurd to tell easily.  It makes sense to you, but the retelling leaves you sounding a bit crazy.

This doesn’t just happen with fiction.  A  disconnected world requires a lot of suspension of disbelief.

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To Fly the Flag

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For Independence Day, I can never do better than this old story I love to retell as often as I can.  Enjoy the holiday!

The misunderstandings and suspicions melted away, as they always do, after a few litres of liquid bread that the Germans call “Bier”. Harald was very honest in his German way, a kind of honesty that was spelled out in long, silent pauses as much as words. “With all of these different people and cultures, what is it that makes you Americans?”

I swallowed my beer to give me time, and the perfect answer came to me:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

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The Long Reach of Personhood

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Normally, Barataria takes up a hot news story after the mainstream press has released its authoritative take on the subject and social media has frothed over it for a while. Not the Burwell v. Hobby Lobby decision. I have to admit, I’m confused by this decision because it seems to be incredibly vast in its potential scope, a position echoed by Justice Ginsburg in her dissent. That dissent even became a song as people around the ‘net struggle to make sense of this.

If there has been a legal earthquake, it will do what upheaval and disaster always do – highlight how everything has changed and eventually demand systemic responses. This decision, if nothing else, shows how utterly ridiculous it is to have the cost of health care foisted onto businesses in the first place. Beyond that …. it’s hard to tell just what it means.

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