Author Topic: Inflation rate is worst since OleBush was President  (Read 506 times)

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hnumpah

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Inflation rate is worst since OleBush was President
« on: January 16, 2008, 04:09:33 PM »
Inflation rate is worst in 17 years
By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas. Meanwhile, industrial output was flat in December, more evidence of a significant slowdown in the economy.

Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, the Labor Department said Wednesday. Consumers felt the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.

In a second report, the Federal Reserve said that output at the nation's factories, mines and utilities showed no growth in December, adding to a string of weak economic reports showing that the economy was slowing at the end of last year.

That weakness has shown up in the biggest one-month jump in unemployment since the 2001 terrorist attacks and billions of dollars in losses at many of the country's biggest financial institutions. Citigroup Inc. reported Tuesday it had suffered a $10 billion loss for the last three months of 2007, reflecting bad bets on investments backed by subprime mortgages.

The Dow Jones industrial average plunged by 277 points on Tuesday and fell even further on Wednesday as Intel reported weak earnings for the fourth quarter. The Dow was down by 26 points in late morning trading.

The unchanged industrial output in December was the poorest showing since industrial output actually fell by 0.5 percent in October. Output had been up by 0.3 percent in November.

The December weakness reflected flat output at U.S. factories, a tiny 0.1 percent rise in the mining industry and a 0.2 percent drop at the nation's utilities.

The Consumer Price Index rose by 0.3 percent in December, slower than the 0.8 percent in November, as food costs were flat for the month and energy prices rose by 0.9 percent after an even bigger 5.7 percent jump in November.

Outside of food and energy, inflation rose a more moderate 0.2 percent in December. This measure of core inflation rose by 2.4 percent for all of 2007, down slightly from a 2.6 percent increase in 2006.

The Federal Reserve is closely watching to see whether the jump in food and energy becomes more widespread and starts pushing core inflation higher.

Analysts said that with core prices generally remaining well-behaved, it will give the central bank the leeway to cut interest rates further to battle a serious economic slowdown triggered by a steep slump in housing and a spreading credit crisis.

The expectation is that the Fed will cut a key rate by a half-point when officials meet at the end of this month. Federal Reserve Chairman Ben Bernanke raised hopes for further rate cuts in a speech last week when he said that economic risks had grown significantly in recent weeks.

The rising risk of a recession has prompted politicians to consider stimulus packages to give the economy a jump-start to either prevent a recession or at least mitigate its fallout. President Bush has said he may unveil a plan around his Jan. 28 State of the Union address. Democrats in Congress and presidential candidates in both parties are putting forward their own plans.

The CPI report showed that the 4.1 percent increase in overall prices was the biggest since a 6.1 percent jump in prices in 1990.

Energy costs rose by 17.4 percent this past year while food costs rose by 4.9 percent. Both were the biggest increases since 1990. Gasoline prices were up 29.6 percent, the biggest increase since they soared by 30.1 percent in 1999.

The 2.4 percent rise in prices outside of food and energy was the smallest since a 2.2 percent rise in 2005.

Clothing costs and the price of new cars actually fell for the year, both dropping by 0.3 percent, while airline fares, reflecting higher fuel costs, were up 10.6 percent and medical care, always one of the leading areas of price increases, rose by 5.2 percent for 2007.

Workers' wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the biggest setback since a 1.5 percent fall in 2005.

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_JS

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Re: Inflation rate is worst since OleBush was President
« Reply #1 on: January 16, 2008, 07:04:02 PM »
Energy costs rose by 17.4 percent this past year while food costs rose by 4.9 percent.

medical care, always one of the leading areas of price increases, rose by 5.2 percent

Workers' wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the biggest setback since a 1.5 percent fall in 2005

Wonderful, higher inflation coupled with a drop in real wages.

But we can all rest easy knowing that Halliburton has not suffered during this period.
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BT

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Re: Inflation rate is worst since OleBush was President
« Reply #2 on: January 16, 2008, 07:10:54 PM »
Quote
But we can all rest easy knowing that Halliburton has not suffered during this period.

Are you saying the wages of Halliburton employees kept up with the rate of inflation?

_JS

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Re: Inflation rate is worst since OleBush was President
« Reply #3 on: January 16, 2008, 07:18:31 PM »
Quote
But we can all rest easy knowing that Halliburton has not suffered during this period.

Are you saying the wages of Halliburton employees kept up with the rate of inflation?

Oh I doubt they did. Halliburton mostly subcontracts. I'm guessing that the top brass kept up with inflation - or likely much better.
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

hnumpah

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Re: Inflation rate is worst since OleBush was President
« Reply #4 on: January 16, 2008, 07:48:41 PM »
Quote
Energy costs rose by 17.4 percent this past year while food costs rose by 4.9 percent.

medical care, always one of the leading areas of price increases, rose by 5.2 percent

Workers' wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the biggest setback since a 1.5 percent fall in 2005

I'm sure it's all Bubba's fault; it just took it seven + years to show up.
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Xavier_Onassis

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Re: Inflation rate is worst since OleBush was President
« Reply #5 on: January 17, 2008, 12:14:03 PM »
If the leader of a small country screws up, the results are close to immediate.

The US has a huge economy, and when the government screws up (in this case by borrowing gi-normous amounts of money and pissing it away in Iraq) it takes a while for the consequences to catch up.

Would Reagan been able to stimulate the economy had he not been preceded by four years of Carter's zero based budgeting?
Could Juniorbush have borrowed money from the Chinese on such good terms had Clinton not managed to stabilize the mess he inherited from Olebush?

"Time flies like an arrow; fruit flies like a banana."

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Re: Inflation rate is worst since OleBush was President
« Reply #6 on: January 17, 2008, 02:43:40 PM »
They can always do like Maggie Thatcher and just say that it is actually a good thing that wages are falling in real terms as that reduces one of the great factors to inflation.

One thing about ol' Mags, she had a lot more grapes than the American right-wingers we have.
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

Xavier_Onassis

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Re: Inflation rate is worst since OleBush was President
« Reply #7 on: January 17, 2008, 03:35:08 PM »
I recall Olebush going to Saudi Arabia and begging the Saudis to lower production so the price of oil would go up.

I recall the Juniorbushies bitching about how China should raise the value of its money, therby raising prices at the Wal*Mart for their poorer American countrymen.

In the US we don't say that it is a good thing that you earn less. We say increasing your productivity is a good thing. You are now making 15 whatsits an hour instead of 10 whatsits an hour for the same money. Your boss is getting /13 more money from what he pays you. You should be proud of your productivity. Let's increase it to 20 whatsits an hour next year!

And if we raise taxes on your boss, Universe Price will be most distressed, because that would be 'class warfare'.
"Time flies like an arrow; fruit flies like a banana."

_JS

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Re: Inflation rate is worst since OleBush was President
« Reply #8 on: January 17, 2008, 05:13:17 PM »
But surely you have to give credit where it is due. Maggie didn't bother with bullshit. She just came out and told people it was good that they were making less. She even told them that Britain needed high unemployment as part of its required "medicine." She literally made other Tories cry. At the Brighton Conference in '85, before it was so rudely interrupted by an IRA bomber, she had two male Tory MP's leave her hotel room in tears!

I don't know what I'll do when she dies. It'll be difficult not to smile.

And in fairness XO, I don't think you give UP enough credit. He's typically one of the most sensible folks on here even if we disagree in ideology.
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

Xavier_Onassis

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Re: Inflation rate is worst since OleBush was President
« Reply #9 on: January 17, 2008, 05:58:11 PM »
I didn't like Maggie Thatcher and I still don't.

When someone tells a worker that it is good for the country that he is making less, this is basically saying that the society's progress should mean more to him than his own. I don't see the difference between Thatcher spouting such stuff and Stalin doing the same.

It is NOT good for moswt of us when oil prices go up, and it is not good for us when Chinese products sell for more at the Wal*Mart, either.

It probably IS good for me, personally, when petroleum prices go up, since I barely use the stuff: I run my two ancient Diesel Benzes on biodiesel made from palm oil, and I have several thousand dollars invested in natural resources funds.

But I still dislike Big Oil.

I agree that UP is logical: if one starts with his pres=mises, one will end up with his conclusions. I just disagree with his premises that we are more like solitary wolves than tribal apes. I even like wolves more as a symbol. Apes are ugly as sin to me.
"Time flies like an arrow; fruit flies like a banana."