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Page added on May 9, 2014
Americans live on a statistical reservation
America’s Bureau of Labor Statistics reports inflation in the US running at 1.5 percent.
This is dangerous nonsense. The 1.5 percent number depends on a misrepresentation of a key component: food. And it is this statistical hocus-pocus that is at the heart of wealth and income gaps (and revolutionary tendencies) in the US and around the world.
What percentage of your discretionary income is spent on food? If the answer is 40 percent or more then you are living on one of America’s new statistically engineered reservations (i.e. open air prisons) or thinking about revolution, as we saw in Egypt and now Ukraine.
How does this statistical inflation mirage work?
Inflation numbers are presented by the government and the MSM in a way that implies homogeneity across all income and wealth brackets, but this is an illusion designed to mask pernicious financial engineering implemented to channel vast sums of money away from the many and into the pockets of a few financial engineers and bankers at the remaining TBTF (Too Big To Fail) banks on Wall St. and the City of London. “Financial engineering” is a highfalutin’ term, like calling garbage men “waste disposal engineers.” It is a term meant to deflect attention away from what are essentially government-sanctioned lies. Instead of reporting on the actual price movements of food in a representational way that indicate the true costs for the average person, the government’s inflation “index” is rigged so that – and this is key – any accurate reading of food prices is excluded and therefore economic policies are conveniently flawed in ways that favor one class of Americans over another.
AFP Photo / Getty Images / Spencer Platt
Since food is the one essentially component in any household budget – by rigging the food price number in the index, by understating food’s true costs, or simply omitting food costs from the index – government statisticians can claim that the overall trend in inflation is 1.5 percent, even though food prices are rising by close to 10 percent, and the overall inflation experienced by the average consumer is near 8 percent.
Misstating food inflation numbers helps the top 1 percent, since their monthly cost for food, as a percentage of their overall household budget, is less than 2 percent, so the true 10 percent rise in food cost inflation to them is negligible; whereas for the bottom 99 percent (and it gets worse the further down the socio-economic ladder you go), the same 10 percent food cost increase means a substantial loss in purchasing power and loss of wealth. And when you get down to the poorest of the poor, loss of life.
Rigging food prices by not including them in the official inflation index is a subtle form of gerrymandering at best. A closer examination of this government-backed charade looks more like statistical apartheid. The middle class and the poor are being squeezed out by rising rood costs that are not included in the government’s calculations and since the government can’t figure out where to put all these newly poor they create they imprison them (while the US represents about 5 percent of the world’s population, it houses around 25 percent of the world’s prisoners), or keep them in trailer park ghettos (the fastest growing real estate segment by private equity investors in America).
The added benefit for the 1 percent top-tier class of rigging inflation is to give them rhetorical (read: propaganda) cover to claim the economy is at risk of “deflation” and therefore interest rates should stay at record low rates (recently hitting 300-year lows in the UK and 240-year lows in America).
Low interest rates (controlled by central banks) lower the cost of borrowing for the purpose of making speculation cheaper and driving up the prices of so-called “assets” that comprise the bulk of the 1 percent’s wealth. (And when speculative bets go wrong, the same government that misstates the inflation number and controls the central banks, bail out the speculators too.)
Pretending food price inflation doesn’t exist keeps the 99 percent poor and the 1 percent rich. But be careful. As we’ve seen recently, and throughout history (with the most famous example being France in 1889), when food prices eat into 40 percent of household budgets, the population revolts.Americans live on a statistical reservation
15 Comments on "Americans live on a statistical reservation"
Mike999 on Fri, 9th May 2014 10:32 am
RT, you can do better then that.
– Of course food is more expensive in different income classes. But, if food is 40% of your budget, you don’t have a mortgage, or a car, or car insurance, …
You need a slightly more sophisticated analysis then this.
Love the channel but this is garbage.
GregT on Fri, 9th May 2014 10:59 am
“But, if food is 40% of your budget, you don’t have a mortgage, or a car, or car insurance, …”
At least if you DID have a mortgage, or a car, or car insurance, you probably don’t have them anymore. Food costs are not discretionary expenditures, much of what keeps the economy growing are. The higher the percentage of people that can no longer afford to be good ‘consumers’, the further the economy tanks. The same is true for investment capital.
Food insecurity has been a key cause for revolt throughout history. It won’t be any different this time.
Boat on Fri, 9th May 2014 11:38 am
This is why I was surprised that the US now uses 45% of the corn crop on biofuels. It makes the farm industry happy but not so good for the global supply for food. Was this a planned move to decrease global population?
Davey on Fri, 9th May 2014 11:39 am
True Greg it all comes back to food even more so than oil
Davey on Fri, 9th May 2014 11:55 am
Boat, I farmed 1000 acres of corn and beans at one point prices were so bad for small corporate farms biofuels saved the day but now that prices are better a whole industry is there and can’t just be shed away without consequences and unintended consequences. Another example of predicaments of overshoot and limits of growth
J-Gav on Fri, 9th May 2014 12:29 pm
Davey – Thanks for the reminder, which should be useful to many. I.E. as bad as a system may be, chucking it out the window from one day to the next isn’t likely to lead to a positive outcome.
Trouble is, who can be sure we have the time to move from certain heavy investments which are probably untenable over the short or middle term to more reasonable scales of resource use in local/regional implementation?
Boat on Fri, 9th May 2014 1:23 pm
I am not negative on biofuels. In fact I hope desalination becomes cheap enough to grow crops for fuel in areas that is now unused space. Thats my idea of a win win. The program gets the money it needs for R&D and better potential down the road.
basil_hayden on Fri, 9th May 2014 1:31 pm
Recent experiences have left me to believe there are many many americans that belong on the reservation, because they think they’re entitled and are not willing to work, at all. I used to think everyone was willing to work to eat, how wrong I was.
Boat on Fri, 9th May 2014 1:54 pm
If we had a huge lack of workers and employers had to compete with wages and benefits and training to get workers I think you might change your mind.
GregT on Fri, 9th May 2014 3:20 pm
According to the world’s scientific community, we cannot burn known fossil fuel reserves, let alone add more fuels to the mix, if we hope to avert a runaway greenhouse event. As it stands right now, climate instability is expected to increase dramatically over the next 40 years, even if we were to stop burning all fuels today, which we are not.
Within the next decade, in all likelihood, wages, benefits, training, and employers will be a thing of the past for the vast majority of people. Many people studying our economic situation believe that we have less than 5 years, some even think less than two.
Our way of life, especially in western societies, is coming to an end. The days of economic recession/depression are already here. They are being hidden from view through manipulation of statistics, and monetary easing.
Chucking our current system out of the window will surely not lead to positive outcomes, but continuing to prop it up with no alternate plans in effect, will only make the collapse that much worse down the road.
Northwest Resident on Fri, 9th May 2014 3:56 pm
GregT — Great summarization of just how screwed we are. Every direction we look these days, we’re damned if we and damned if we don’t. My philosophy is that if you see the ship is sinking, then top priority is to save the women and children — to save whatever can be saved to preserve the security of future generations. I would be that members of TPTB club are thinking along those lines too, however, their idea of preserving the security of future generations may not include YOUR or MY future generations — just theirs. Sure seems that way sometimes.
J-Gav on Fri, 9th May 2014 4:22 pm
Northwest – “Their idea …may not include YOUR or MY future generations.”
That is most assuredly the case. Those people live in a different world and couldn’t care less about the hoi-polloi, as long as they’re properly law-and-ordered into submission.
GregT – Agreed. Which means we’re stuck … except, to a degree no-one can ascertain, for those groups of people who build something else up from the bottom without waiting for permission from the top.
Northwest Resident on Fri, 9th May 2014 4:49 pm
“hoi-polloi” — had to look that one up. It sounds so juicy, but ends up just being Greek for “the masses” or “the commoners”. sigh…
But you are so right, J-Gav. Think Titanic. “They” know we’re taking on water fast, they know that there is no help coming, they know that there aren’t enough life boats for anybody except the upper crust, and they are most definitely going to keep what they know quiet until the last moment when it is time to board those life boats and save themselves.
Malcolm on Sat, 10th May 2014 1:20 pm
I think you mean 1789, not 1889. Only a century out…..
Davy, Hermann, MO on Sun, 11th May 2014 6:58 am
Greg T said – Chucking our current system out of the window will surely not lead to positive outcomes, but continuing to prop it up with no alternate plans in effect, will only make the collapse that much worse down the road.
Damn the choices!!! Yea Greg, ending now would benefit the ecosystem immensely for the future “whoevers wherevers”. Yet, damn, I need 3 years please for my transition. This transition has been going on for 10 already but really gained spread in the last 3. I have the short term collapse event prep work done and now I am working on the longer term (if there is one). In this selfish point of view I am including the coalescing of global bottom up ideas, efforts, and trends. Greg, I think we need a bare minimum of these “seeds planted” to have some elements of what will be needed to survive. I am relating to the fall of Rome and how the isolated monasteries and the like played a role in preserving knowledge. I would also like a crisis to hit TPTB so they do their risk management due diligence. In this due diligence I am hoping they realize the grave danger to even them in a collapse. You know TPTB, military, 1%’ers have golden parachutes for collapse but what kind of life is an irradiated world or one with loose NUKs. In any case I personally feel this is a systematic process that is self-organizing so it is beyond management except around the fringes but also global suicide through MAD WMD’s. So unfortunately the only choice is what unfolds through nature and or global MAD WMD suicide. I have read that to make a dent in AGW we have to eliminate “ALL” human activity except agriculture. In my view there is little we can due AGW for 7BIL and BAU. Knowledge was truly Pandora’s box for humans and an evolutionary dead end. We are destine to follow all other species into a bottleneck or extinction when carrying capacity has been breached. It has now been breached globally and across all species. Some species will thrive but it is those that will thrive in a low complexity sterilized global ecosystem. This will set the stage for the evolution of a new set of global species I imagine. So there you have it “choices” are few. We do have hope and luck something positive will unfold among the bad. It is beyond us to know what is ahead because there is no precedence in scientific history nor human history for anthropogenic human events in such a short time frame. It has really been since the advent of ag and human civilization that these global human changes began. Greg, I am at a loss on my spiritual opinion of a BAU death now or in a few years. But you are very correct the damage is accelerating and soon the chances of avoiding a completely sterilized world will have passed.