Power & Market
Without the Federal Government, Who Will Regulate Dog Meat?
The federal government is running a massive deficit right now. American wages are stagnant. The US is involved in multiple costly wars with no apparent objective. And the president raises taxes on Americans at will through his tariff policy.
But fortunately the Congress is getting down to what is really important. Federalizing laws banning the sale of cat and dog meat.
The silliness of Congress's involvement in the matter is so obvious that even CBS news begins its article on the topic with a snide comment:
The government shuts down at the end of the month, and Democrats and Republicans seem unable to make a deal to keep it open. They are, however, united in trying to stop people from eating pets.
But the new bill does provide a chance for politicians to crow about "accomplishing" something in Congress. Bill sponsor and Florida Democrat Alice Hastings released a glowing statement:
"The House of Representatives has voted to unify animal cruelty laws across the country, which would prohibit the slaughter of dogs and cats for human consumption," Hastings said. "I am proud to have championed this effort in Congress to explicitly ban the killing and consumption dogs and cats across the United States, and am greatly appreciative of my friend and colleague Congressman Buchanan for taking the 'Dog and Cat Meat Trade Prohibition Act' across the finish line today."
Boy, without the federal government, who could possibly regulate such things? I mean, other than the county commissioners who could just as easily pass an ordinance on the matter? The sale and handling of dog meat is already illegal nearly everywhere in the US. The new federal law is being passed because it gives politicians a shiny object to distract the voters with on the campaign trail this fall.
Keep in mind also that if the feds plan to enforce the new regulations, it will require work from federal employees who will need to surveil, investigate, and prosecute any suspected lawbreakers. The people who do it will collect a federal salary and, eventually, a federal pension.
Needless to say, there's no section of the Federal Constitution that expresses the necessity of federal involvement in regulating cat meat. But such trifles don't concern Congress when there is good politicking to be had. After all, from the politician's standpoint, only a few odd eccentrics like yours truly are going to bother condemning the bill. Meanwhile, the bill's supporters will be able to make stump speeches to suburban moms and college activists about how "I am fighting for you" in Congress by making dog-meat boutiques illegal under federal law.
This leads us to ask the question of how widespread this black-market industry even is. If is is not widespread then why the need for federal legislation? And if consumption of dog meat is widespread, then this tells us that somewhere in America private citizens — presumably taxpayers — like to eat dog meat. So, the federal legislation is either pointless, or it's trampling on the property rights of someone somewhere.
In either case, the question must be answered: are we to believe that dog-meat lovers have no rights just because lots of people think dogs are cute? Yes, I get it, I have a dog too and she's swell. Barring a Venezuela-style apocalypse, I'm totally not going to eat her.
On the other hand, if some people somewhere like eating dog, why is it my place to sign off on threatening those people with fines imposed by federal agents for doing something I find distasteful.
At this point in the debate, of course, the opponents of dog meat will start repeating totally arbitrary reasons for why eating dog ought to be verboten. "They' cute, they're intelligent, they make good companions." And so on.
But as anyone who has worked with pigs knows, those animals are very intelligent, too. Some are even cute. Some people keep pigs as pets. And yet, many of the same people who sob over dog meat have few scruples about ordering a sausage pizza.
Hardliner animal rights people are, at least, consistent in this. They are against all animal slaughter. And that's a respectable position — although not one I agree with.1
Dog Meat vs. Horse Meat
Unfortunately, we've already been over this, and the federal government has already been blazing the trail for regulating meat slaughter and sales for quite some time. In fact, it was just late last year that the Congress was debating ending an existing federal ban on the processing of horse meat. And although I've been a personal fan of many horses I have met, I also came out against that federal ban.
[RELATED: "Do We Really Need a Federal Ban on Horse Meat?" by Ryan McMaken]
In that case, though, opponents of horse-meat bans had something more in their favor: Americans were still eating horse meat in the mid twentieth century. Even more recently, Americans were feeding horse meat — ironically, given the current debate — to their cats and dogs. Moreover, as I pointed out in the article, Western society has a long history of eating horse meat, although it was never especially popular in the United States. But in the case of horse meat, why ought the "rights" of horses trump those of private taxpaying citizens who happen to make their living from selling horse meat? Or who enjoy eating it?
With cats and dogs, of course, there is very little history of them being eaten in the US or in Europe.
Eating dogs, however, is apparently common in China, Indonesia, and Korea. Some immigrants from those places still eat dogs.
But, there aren't enough people in the US who like dog meat to make the pro-dog-meat lobby in the US politically significant. Congress simply doesn't have to worry about any of those people when campaigning for re-election this November. Those horrible foreigners and new arrivals who like dog meat? To hell with them. And if they get caught eating a dog or cat? Well then its a $5,000 fine. Xenophobia continues to be great politics, just not in the way you think. It's not the Trump voters in this case who are wanting to stick it to foreigners and immigrants. This time, banning dog meat is all about pandering to soccer moms and well-to-do twenty-somethings who refer to their dogs as their children. It's probably a winning strategy.
- 1. Unfortunately, with many hardcore animal rights activists, this admirable consistency often fails to extend to opposing the killing of human life pre-birth.
Price Gouging: A Life-Saving Market Mechanism
As Hurricane Florence prepares to ravage the Southeastern United States, social media warriors, and “news” outlets are exclaiming their outrage at the business owners who are raising prices on essential items such as water, food, gasoline, plywood, and even hotel rooms. This “price gouging,” however, is absolutely essential, for people’s lives are at risk due to this storm. When clouded by emotion, increasing the price of these commodities may come across as detrimental, and even malicious. But a sober mind must acknowledge the necessity of price flexibility.
Price Gouging and Basic Economics
We can look at the effects of price gouging from two perspectives: supply and demand.
On the demand side, increasing the price of these goods makes consumers more conscious of their purchases. In other words, this encourages people to live within their means. When a disaster is incoming, such as a hurricane or a blizzard, people will see others at grocery stores stocking up on water and other essentials. They will, however, purchase too much if the price stays the same. Whereas a storm and its immediate aftermath may last for a few days, people will purchase enough to last them for months, resulting in shortages.
By increasing the price of a good, customers are more likely to purchase only what they need to survive. Now, many will say that this just means that the rich will outbid the poor on necessary resources. But this is not the case when one thinks on the margin. In everyday life, the rich don’t outbid the poor on food because the rich do not need all the food in the world. They will only purchase food so long as the perceived benefit acquired is worth more than the money they will have lost if they make the purchase. In other words, price gouging stops the rich from buying all of the water and thus allows the poor to buy water that they may desperately need.
Keeping the Prices the Same Hurts Everyone
Suppose water stayed at the same price throughout a disaster. The receivers of the water will then be the first to show up. But what if the first comers take far more than they need for this disaster? Then there will be nothing left. By increasing prices, store managers are making sure that people only buy what they find to be necessary so that they do not run out of goods. This allows for a greater distribution of essential goods.
On the supply side, price gouging helps increase the quantity. The rich can only outbid the poor if there is a fixed amount of a given resource within the area in which a disaster has occurred. This is far from the case. By increasing prices, the market is signaling to businesses to reallocate resources to the area in need of resources. This has two effects.
First, entrepreneurs who live outside the disaster area see a willingness of consumers to purchase items at a higher price. That means that entrepreneurs will be far more likely to take the risk of traveling to the area to sell the items. This makes the number of goods to rise, allowing for more people to be able to access essential resources.
Second, charities see higher prices and begin initiatives to give resources to those in need. Governments cause shortages by implementing price controls. Charities and entrepreneurs save lives. There is not a fixed amount of goods. The price system readjusts incentive structures to ensure that enough people have what they need to survive a natural disaster.
Price gouging is no different from any other instance of price flexibility. Those who charge a higher price despite popular outrage deserve a medal, for they are saving lives by ensuring people only purchase what they need to survive a disaster. For all of you who will be affected by Hurricane Florence, stay safe and thank a price gouger!
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Great New Lew Rockwell Interview
I've been following Lew Rockwell's work pretty closely for more than 15 years, but there's a lot of good stuff I haven't heard before in this new interview between Tom Woods and Lew. He goes a little more deeply into some of his work with Ron Paul in Congress, and Lew apparently has a new book coming out soon, called Against the Left.
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Barack Obama's Return Just Reminds Us How He Fueled American Distrust
Former president Barack Obama is back. He kicked off a series of campaign appearances last week with a blistering attack on the Trump administration and said the Republican Party had “embraced a rising absolutism.” President Donald Trump deserves plenty of harsh criticism, but Obama’s indictment is akin to the kid who killed his parents and then sought mercy from the judge because he was an orphan.
Obama declared that“the biggest threat to our democracy is cynicism.” He also called for “a restoration of honesty and decency and lawfulness in our government.” But his eight years as president fueled the distrust of Washington that Obama now condemns.....
When Obama took office, the United States had the 20th-most-free press in the world, according to the Reporters Without Borders’ World Press Freedom Index. By 2016, it had fallen to 41st — worse than South Africa and barely ahead of Botswana. Obama appointees severely undermined the Freedom of Information Act.
“It should not be a partisan issue to say that we do not pressure the attorney general or the FBI to use the criminal justice system as a cudgel,” the former president said. Trump’s declarations about federal prosecutions are appalling. But while the FBI was investigating the legality of Hillary Clinton’s private email server, Obama repeatedly publicly declared that she had committed no crime.
The Inspector General report released in June revealed that, after a half-hearted probe, the FBI planned to absolve Clinton unless she openly confessed to wrongdoing when FBI agents finally talked to her. The stifled investigation of her email shenanigans helped assure her the Democratic Party presidential nomination and, indirectly, paved the way to a Trump presidency.
Read the full article at USA Today
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The Great Cryptocurrency Crash of 2018
It looks like we have an asset bust for the record books in the making. The cryptocurrency crash now under way today surpassed the dot-com bust that occurred at the beginning of the millennium,. While the NASDAQ Composite Index suffered a decline of 78% from its peak in March 2000 to its trough in October 2002, the MVIS CryptoCompare Digital Assets 10 Index, has tumbled 80% from January of this year to today. During this period, the price of bitcoin, which represents 55% of the value of all cryptocurrencies, has plunged from around $19,300 at its January peak to $6,300 as I write this. In the estimate of one commentator, the only "currency" in the world that is now faring worse than bitcoin is the Venezualan bolivar. Whether or not cryptocurrncies recover--and I doubt they will--it is clear that their volatility make them unfit to serve as a general medium of exchange. However this lesson will likely be lost on the promoters of cryptocurrency. As Tyler Winklevoss put it:
As you get older your brain loses its plasticity at some point and you get wedded to the frameworks that you have.
By the way, Mr. Winklevoss, one of the Winklevoss twins of Facebook lore and one of the first self-proclaimed bitcoin billionaires, was speaking about the critics of cryptocurrency.
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The EU Threatens the Existence of Memes
The European Union today voted in favor of Article 13, legislation that risks, in the words of some, “destroying the internet as we know it.”
It’s understandable to be skeptical of such a claim – after all similar claims were made about the FCC repealing “net neutrality.” While that campaign was largely guided by ignorance and corporate hypocrisy, the concerns here seem warranted.
The issue involves online copyright, sharpening the (fallacious) intellectual property rights for content creators in today’s digital world. At risk here is the ability to share any sort of content that includes copyrighted material – including memes.
Article 13 is [has earned] the reputation of a "meme killer."
It would require web giants to automatically filter copyrighted material — songs, images, videos — uploaded on their platforms, unless it has been specifically licensed. Despite its divisiveness, the piece of legislation passed by 438 votes to 226 with 39 abstentions in the European Parliament.
The most furious lobbying efforts focused on this article, with musicians, artists and authors coming out strongly in favour of the rule, and technology companies — such as YouTube — warning against its dangers.
Concerns included the filters' blocking of non-copyrighted material by accident, pretextual copyright claims by "copyright trolls", and the crowding out of smaller websites which cannot afford expensive filter software to keep their platforms compliant.
To enforce these new rules, tech companies will be forced to look to “improve” their algorithms to better detect and screen shared content for any copyright materials. Just yesterday it was reported that Facebook has already been designing similar tools in their crackdown against “offensive memes.”
Of course the application here goes well beyond memes. Youtube has an entire cottage industry of videos that rely upon repurposing copyrighted material in unique ways – from parodies to fan analysis to sappy music videos. All of this could be put at risk through Article 13.
This could also have consequences well beyond Europe as well. Just as California’s state emission standards end up impacting car manufacturing nationwide, there is a risk that rules adopted to placate the bureaucrats in Brussels could carry over to global operations.
Even if tech companies decide to limit these restrictions to only EU users, this could simply be start of trend by state powers around the world. Considering how memes have been used around the world to undermine authoritarian regimes my spreading ideas, such a move wouldn’t be at all surprising.
The good news is that today’s vote doesn’t make Article 13 law. The legislative process will continue behind the scenes in Brussels until a final vote takes place January of next year.
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Cop Amber Guyger Is One Reason We Need Private Gun Ownership
When advocates of gun confiscation complain about "guns" and say "no one needs a gun for x" all they are really saying — whether they understand it or not — is "I want only cops and soldiers to have guns."
While gun control advocates often claim to be suspicious of police power, logic dictates that the gun-confiscation position is simply the position that only government employees should have guns. Similarly, more mild gun-regulation positions are designed to increase the coercive power of government over the taxpaying citizenry, and to lessen access to private sources of self-defense — thus increasing private-sector dependence on government police for "protection." The gun-regulation position is premised on the idea that only the police can really be trusted with gun ownership.
And what a terrible position that is.
Richard Black could tell us more about this. Were he still alive today. After Black killed a home intruder in self-defense, he called the police. Sometime later, the police showed up and shot Black dead in his own home.
The dead victims of the school shooting in Parkland could tell us more also. When sheriff's deputy Scot Peterson — who was specifically supposed to provide security at the school — was faced with an armed intruder, he ran away and hid.
And now we hear about the case of Amber Guyger. Guyger is the police officer who confused another man's apartment for her own. She trespassed on the man's property, saw his "silhouette" and then open fired. Her victim, Botham Shem Jean, died.
A Double Standard
In cases like these, police could not be counted on to use firearms appropriately — or they failed to use them to defend the innocent.
Moreover, this latest case serves to illustrate, yet again, the enormous double standard that is employed when police behave in ways that any private citizen would be roundly and viciously denounced for. Were a private citizen to do what Guyger did, his actions would be provided as more evidence that private ownership of guns ought to be curtailed.
Guyger has claimed in her defense that she "gave verbal commands" to her victim before she shot him.
That this should even be considered any sort of "defense" requires a special kind of deference to government. But this is how police officers and their defenders think. If a normal person is woken or surprised in the middle of the night by an intruder with a badge, the victim is supposed to know — by magic, apparently — that the intruder is a police officer and then do what you're told. Never mind that the person might just be claiming to be a police officer.
For police of course, private citizens are always supposed to respond calmly and obediently when screamed at by multiple police officers. Often, the victims receive conflicting orders from police.
Similar rules do not apply to police. Police — we are told — "must make split-second decisions under extreme pressure. "In other words, if the police make a poor decision under pressure, they're heroes who did what had to be done. If a private-sector taxpayer like Richard Black makes the "wrong" decision? He deserved to die.
The law reinforces this view as well. It is extremely rare for a police officer to be prosecuted for gunning down unarmed victims. In the Black case, the police chief has already blamed the 73-year old war veteran for his own killing. The chief's reasoning? Black, who was hearing impaired, should have responded faster to verbal police commands. Case closed.
Even when a trigger-happy police officer is brought up on charges, the law is written in such a way as to make it extremely hard to thread that needle. Members of the jury are easily browbeaten into coming down on the police officer's side. We saw this in the case of Daniel Shaver, an unarmed man who was crawling and begging for his life when gunned down by police. Police officer Philip Brailsford was so fearful of this weeping, trembling man on the ground that Brailsford just couldn't keep himself from opening fire. The jury's verdict? Not guilty.
What If a Private Citizen Did the Same Thing?
But imagine if a private citizen did what Guyger did. If a private citizen trespassed into someone's house, screamed at the residents, and then opened fire — regardless of the details in the case — we all know what would happen.1 We'd all be told we need to have "a national conversation" about how there are "too many guns" in private hands. If the whole thing were shown to be an accident, pundits would endlessly be quoting statistics designed to make it look as if guns in private hands lead to countless accidental shootings. But since it was a police officer who did the shooting, we'll hear about none of this. Why? Because gun control does nothing to control the use of firearms by police. Although we're repeatedly told that guns in private hands lead to spades of accidents, mistaken shootings, and overly-aggressive gun owners, none of this applies when that gun is in government hands. Then it's all just unavoidable. It's never a problem with the guns themselves.
And the double standard doesn't stop with the media. Were the roles of Jean and Guyger reversed, the response by criminal-justice officials would be totally different. A person who trespassed into someone else's home and started shooting — even if totally accidental — would be arrested immediately. A plethora of charges would be aggressively applied to the defendant, ranging from illegally discharging a firearm to criminal trespass to second-degree murder.
In Guyger's case, she isn't even arrested at the scene, and so far she only faces manslaughter charges. The Texas Rangers have handled her with kid gloves, allowing her to turn herself in at her convenience. All her statements to the police have been treated as indisputable facts — and not as the claims of a person who breaks into people's homes and starts shooting. Attorneys who have read the arrest warrant are saying that, given the way it is written, law enforcement clearly thinks it's all just an accident and "the Texas Rangers were careful not to implicate Officer Guyger." It's the usual "professional courtesy" of the Thin Blue Line. There is one set of laws for government agents. And another set of laws for the taxpayers who pay all the bills.
Guyger's chain of mistakes in this case belies the pro-gun-control argument that police ought to have a monopoly or near-monopoly on firearms because private citizens can't be trusted with weapons. These ordinary people are too likely to be mentally unstable, too trigger-happy, or too lacking in training to be allowed to own firearms.
But who is to defend us from the mentally unstable or poorly-trained police officers? Or perhaps from the ones who are too distracted or unintelligent to figure out which apartment is theirs?
It is precisely this sort of thing that led to the infamous Indiana law which explicitly states that it is not a crime to defend ones self from an abusive police officer — even using deadly force if necessary. That law was a response to an Indiana Supreme Court decision which stated that “there is no right to reasonably resist unlawful entry by police officers.”
Amber Guyger will benefit form this sort of judicial thinking if her case ever goes to trial. The deck in stacked in favor of the government and its law enforcement arm. It's not a coincidence that government judges too often side with government police. They all work for the same organization — and they all live off the sweat of the taxpayers who have very little say in the matter. Moreover, courts have ruled that police have no obligation to protect the citizenry. Thus, "officer safety" is priority number one.
[RELATED: "Lack of Police Accountability Shows the "Social Contract" Isn't Working" by Ryan McMaken]
At this point, the details of Guyger's motivations and actions remain vague. But let's assume it was just an innocent mistake. There's not much comfort there since we've already seen the double-standard — even in cases of accidents — employed for police shootings and shootings by private citizens. The definition of "innocent mistake" varies widely between police officers and everyone else.
But could anything have been done to change the outcome in Jean's apartment? Even once we know the details, it will be impossible to say — and there's no way to assume that Jean would have successfully defended himself with a firearm in this case. But what if Guyger had missed at first? Botham Jean would have been perfectly rational to retreat, grab a gun, and then return fire. Then Jean might at least had a chance. After all, what reason had he to believe she was a police officer beyond her uniform? It's not as if imposters can't buy those. And even if Jean had believed she was a police officer, he still would have been within his rights — morally speaking — to shoot her dead.
Few who know the realities of real-life violence would see this is a "good" alternative — but it's hard to see how this is any worse than a reality in which police can shoot innocent bystanders without any fear of self-defense on the part of the citizenry. For gun-control advocates, however, this is all too messy. For them, it would all be much more neat and tidy to make sure that private citizens like Jean have no access to the tools of self-defense. "Why you just want the Wild West!" is the typical refrain. The implication is that in a "civilized" society, these sorts of "shoot-outs" should never happen. Apparently, being shot dead while defenseless by a government-employed home intruder is the preferred "civilized" alternative — and only when we all learn to embrace this sort of untrammeled police power will we all be "safe."
- 1. Guyger's defenders are already trying to claim she is innocent of any misdeed because Jean's door was unlocked. However, whether or not the door was locked is irrelevant to the question of whether or not Guyger was trespassing.
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Today's Average Hourly Wage Has about the Same Purchasing Power it Did in 1978
“The Labor Department reported Friday that worker payrolls expanded by 201,000 in August and private-sector hourly wages grew 2.9% from a year earlier,” last Friday's Wall Street Journal reported.
Meanwhile, Ryan McMaken reports that the Fed has a new inflation gauge that’s reflecting “the highest rate recorded in 158 months, or more than 13 years. The last time the UIG [underlying inflation gauge] measure was as high was in April 2005, when it was at 3.36 percent.”
The UIG comprises,
data from the following two broad categories: (1) consumer, producer, and import prices for goods and services and (2) nonprice variables such as labor market measures, money aggregates, producer surveys, and financial variables (short- and long-term government interest rates, corporate and high-yield bonds, consumer credit volumes and real estate loans, stocks, and commodity prices).
So prices are rising, and wages, as always, aren’t keeping up. According to Pew Research,
After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.
So how is everyone, seemingly, buying all those new gadgets? Consumer lending is setting records. That’s how. In the August 24th edition of the WSJ, AnnaMaria Andriotis and Peter Rudegeair write,
Lenders extended $81.9 billion in personal loans to U.S. consumers in the first half of the year, up about 13% from a year prior, according to credit-reporting firm Experian PLC. That compares with a 9% rise in auto loans and leases and a 5% boost in spending limits issued on new general-purpose credit cards over the same period.
Personal loans are unsecured, so are much riskier than lending on cars and homes. However, lenders want to get money out the door so they,
pitch the loans as a way for consumers to pay for projects or activities that might have otherwise taken months to save for. “Take a trip,” says an offer from Barclays PLC. “Add a new deck, patio or pool,” says one from Citizens Financial Group Inc.
All of this debt is on top of $1.04 trllion in credit card debt and $1.5 trillion in student loan debt.
U.S. Consumers and their lenders are seeing the world through Trump’s rose colored glasses. So much to buy and not enough time to save for it! Plus, the Fed’s inflation will chip away at their debts. For poor working stiffs who save, Ludwig von Mises wrote ,
These victims, by and large, are the same kind of people ”roughly, the middle classes” who are injured as creditors through the depreciation of their bank savings, insurance policies, pensions, etc. The salaries of teachers and ministers, the fees of doctors, go up only slowly as compared to the tempo with which prices of food, rent, clothing, and so on, go up. There is always a considerable time lag between the increase in the money income of the white-collar workers and professional people and the increase in costs of food, clothing, and other necessities.
One wonders what could go wrong as we near the 10th anniversary of the Lehman Brothers bankruptcy filing.
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The Kavanaugh Hearings Were a Missed Opportunity—For Both Sides
By now you’ve heard about the combative spectacle that was last week’s Senate Judiciary Committee hearing for President Trump’s nominee to the U.S. Supreme Court, Judge Brett Kavanaugh. This momentous event was characterized not by political acumen, wit, cunning, or prudence, but by partisan obstruction, lawlessness, tantrums, hysteria, ignorance, frenzy, and anger.
Protestors screamed vulgarities and trite slogans, proving they were not interested in Kavanaugh’s responses or in substantive intellectual debate. Seventy of them were arrested on Tuesday alone. If anything, their recurring interruptions and crude histrionics gave Kavanaugh time to pause and think about his responses rather than tire out and let down his guard.
Online left-wing rabble-rousers peddled an absurd conspiracy theory about Zina Bash, a former clerk for Kavanaugh—only shortly before right-wing conspiracy theorist Alex Jones was banned from Twitter. Senator Cory Booker, a Democrat from New Jersey, publicly released documents that were allegedly confidential, claiming full knowledge of the possible repercussions of his act—namely, expulsion from the Senate. “Bring it,” Booker taunted Senator John Cornyn, who warned about the consequences of the supposed confidentiality breach. With unintended levity, Booker announced his “I am Spartacus” moment. Only the documents weren’t confidential after all; they’d already been approved for public release. Thus, Booker’s Spartacus Moment was merely a political stunt of faux bravery.
Why this hostility? Why these shenanigans?
Read the full article at ISI.org.
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Fed: "Underlying Inflation" at a 13-Year High
According to the Federal Reserve's Underlying Inflation Gauge , the 12-month inflation growth in June was 3.33 percent. That's the highest rate recorded in 158 months, or more than 13 years. The last time the UIG measure was as high was in April 2005, when it was at 3.36 percent.
The Fed began publicly reporting on new measure in December of last year, and takes into account a broader measure of inflation than the more-often used CPI measure.
Not shockingly, the UIG has shown a higher rate of inflation than the CPI, most of the time in recent years.
In June, while the UIG was 3.33 percent, the CPI growth rate was 2.9 percent. This was a 76-month high for the CPI.
The use of only consumer prices in the CPI has long been a problem, in that the cost of living and planning for the future does not involve only the basket of goods used in the CPI calculations. A wide variety of assets affect the American economy as well.
As explained by the New York Fed's summary of the UIG measure:
We use data from the following two broad categories: (1) consumer, producer, and import prices for goods and services and (2) nonprice variables such as labor market measures, money aggregates, producer surveys, and financial variables (short- and long-term government interest rates, corporate and high-yield bonds, consumer credit volumes and real estate loans, stocks, and commodity prices).
But don't expect the Fed to abandon its fondness for the CPI and the arbitrary "2-percent inflation" goal any time soon. The fact that the broader measure of inflation is climbing to the highest level seen in more than a decade is apparently not a matter of concern.
In fact, there is now speculation that the Fed — recognizing that tariffs will harm economic growth — may back off its stated plans for continues small hikes in the key rate.
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