Looking at the bright side of deflation

Stella Dawson has looked real hard and found evidence of inflation in the American economy. She's got an article on Reuters website claiming that's not such a bad thing.

The evidence seems to be a little thin. She cites a couple of real estate markets where prices seem to be recovering. That's evidence of inflation only if you ignore the hundreds of places where they're not.

Hourly wages are going up too. By two percent in the past year. Your eight dollar an hour job is now paying eight dollars and sixteen cents! After tax you're up almost five bucks a week!

Don't spend it all in one place; spread it around.

Frankly I think that's a dubious statistic. A lot of employment related stats are designed to obscure reality and make politicians and policymakers look good.

Take the labor market participation rate and the phenomenon of the "discouraged worker" for example. We never count a huge swath of the unemployed in the unemployment statistics because they have supposedly taken themselves out of the job market.

They haven't taken themselves out of the job market. They're not looking for work because there aren't any jobs. There's a huge difference.

That imaginary "discouraged worker" does make a huge difference in the unemployment rate, however. If we counted them as unemployed the official unemployment rate would be in the range of 20 to 25%. That would be considered a catastrophe.

The commentariat would demand action. The political establishment would be tarred, feathered, and run out of town.

But as long as we can cling to the fiction of a single digit unemployment rate, the political class has somehow convinced us that this is the natural order of things and all's well.

So I'm not seeing the inflation that Stella sees from her cubicle in the Reuters office.

For most of you the place you call home is worth less than it used to be. Your paycheck is smaller than it used to be. If you're unemployed, the jobs you're applying for pay less than what you used to make. Employers are still off-shoring jobs or moving to right-to-work-for-less states.

That's not inflation. It's deflation.

But this too has a bright side.

The price of a full-size four-wheel-drive Dodge Ram is barely half of what it used to be.