Well Duh
15 May, 2008 — RickBThere comes a point when you can no longer afford to ignore it. You may, if you are lucky, have found it hard to get worked up about the fact that the average loaf of sliced bread now costs £1.15, compared with less than £1 last year. You may have shrugged on learning that a pint of semi-skimmed milk will currently set you back approximately 20% more than it did in May 2007. But you would have to be really very relaxed - or very flush - indeed not to be moved by the realisation that when a dozen medium free-range eggs are also up 47%, salted butter 62%, Basmati rice 60%, cheddar 25%, pork 7% and beef nearly 5%, you are paying an awful lot more for your groceries than you were a year ago.
According to the Office of National Statistics, food prices have climbed 6.6% over the past 12 months (and April’s hike equalled the fastest increase recorded since the consumer price index was invented 11 years ago). The big supermarkets, which constantly juggle prices across the whole of their range, dispute this figure. But a survey of 24 staple products this week by the mysupermarket.co.uk website, which compares prices at Tesco, Asda, Sainsbury’s and online supermarket Ocado, found that the average family is now spending around 20% more on its weekly food shopping than it was 12 months ago
Yeah the 6.6% figure is not at all reflective of the reality but of course figures like that and fiddled inflation figures will be how various pay & benefits is indexed so even statutory increases are in fact not keeping pace with reality and represent defacto reductions. So does the govt. and the other neoliberal parties think the poor will keep taking this crap as the rich continue to accelerate their wealth acquisition? Certainly informal barter economies and exchequer invisible cash transactions are on the increase, that’s part of how people not blessed with that wonderful term ‘disposable income’ survive. If the state no longer is interested in the welfare of the people then the people are going to get on without it, when government is just the middle management for the ruling class (trans-Atlantic at that) people know which side their increasingly expensive bread is (increasingly expensive) buttered. And it ain’t Nu-fucking-Labour. Sadly the media pretends there are only three parties (price of admission to this clique appears to be uncritical acceptance of neoliberal tenets), the left is fractured and censored out of mass market information but the need for it is greater than ever. The leftists who are still Labour members and the left outside (and that includes disaffected LibDems) of Labour need to find what they agree on and the millions betrayed by the big parties need to be reached via all kinds of media new and old, in the meantime enjoy a paramilitary police force armed with Tasers and look forward to BlairXtreme! Awesome Dude!- Prime Minister David ‘the toff you can trust’ Cameron. Jeebus.
15 May, 2008 at 11:49 pm
i definitely noticed with the eggs!
16 May, 2008 at 12:00 am
Here it is everything especially rice and milk.
16 May, 2008 at 8:54 pm
I’d love to know how they are fiddling the figures everyone knows shit just got way more pricey but our ‘leaders’ pretend it’s a few percent- let them eat (slightly more expensive) cake.
16 May, 2008 at 9:34 pm
Yeah, but 14% or 5% adds up, two cartons of milk, thats 28%, three bags of rice 15% and so on.
17 May, 2008 at 12:06 am
There’s a big problem in the way the indexes are weighted: “plutocratically” rather than “democratically”.
In other words, when working out how much cheese and how many diamond earrings to include, they look at the consumption of the “average” family, taking the mean from everyone’s consumption. This means that the weight given to each family’s consumption depends on their expenditure, as opposed to a “democratic” index where everyone would have the same weighting.
There’s a paper from an economist at the IMF of all places in which he does a bit more of the maths and concludes that the (plutocratic) CPI represents inflation as experienced by higher income consumers.
http://oep.oxfordjournals.org/cgi/content/full/57/4/634#SEC2
In the current context, most of the inflation is in the things essential to being alive: food and energy/fuel. The rich, obviously, spend proportionately a lot less on these things than the rest of us, and so they are underrepresented in the CPI.
17 May, 2008 at 12:07 am
i think it just moderated a stellar comment from yours truly. it had a link in it. when will i learn?
17 May, 2008 at 12:13 am
Who, what, where, when???
17 May, 2008 at 12:39 am
aw seriously it’s not in the spam queue or mod queue or anything?
Okay, I was saying why price indices are so detached from most people’s reality.
A price index is calculated from a weighted basket of goods - ie the price of bread times a certain “weight”, the price of diamond jewellry times a certain weight etc. These weights are supposed to represent the proportion of income the average family spends on each commodity. The word average is almost never unproblematic though.
Almost all price indices, including the RPI and CPI in Britain, just take a brutal mean, adding up the total amount spent on a given commodity by all the families and then looking at the proportion of total expenditure that has gone towards it. This means that the weight given to each family in determining the average depends on that family’s expenditure. The more you spend, the more your spending patterns will determine the spending patterns of the average.
Research from an economist at the IMF of all places confirms the obvious: this “plutocratic” index represents the consumption of families considerably above the average expenditure level, and suggests that a “democratic” index, where everyone’s consumption is weighted equally, would be more representative. link: http://oep.oxfordjournals.org/cgi/content/full/57/4/634#SEC2
In the current context, it’s the prices of life’s essentials - food, energy/fuel - that are going up. Most of us spend a very large proportion of our income on these things, but the well-off “average” consumer does not. Hence even the RPI is an underestimate of inflation when basic essentials rise in price faster than luxury goods.
17 May, 2008 at 12:39 am
moderated again man. check your queue.
17 May, 2008 at 12:42 am
nope, nothing, I’ll check spam.
17 May, 2008 at 12:45 am
Aha, akismet wot dunnit! Now despammed.
17 May, 2008 at 12:51 am
Brilliant! That explains it, I suspected as much, thanks for the info. Yep I seem to remember extreme poverty was once defined as spending 2/3 of income on food and this bullshit average family of course has a disposable income and will not hurt like most people (average not being as indicative as median income).
So shock horror a fiddled stat that hides poverty and related hardship, Dammit!
17 May, 2008 at 12:57 am
Fuckers, that link wants a sign in/money!! Are you accessing through a library/uni account?
17 May, 2008 at 1:07 am
really? huh! i must be able to read it for free because it’s through the university’s own ISP. guess it does have it’s advantages. Yeah basically it’s not quite the same as mean/median - more do you add up before you normalise (plutocratic) or do you normalise first (democratic) - but very similar in effect.
The reason a plutocratic measure is used is because it’s much more intuitive when you’ve got your macroeconomics hat on - because the aggregate measure of inflation isn’t supposed to be the cost of living for real people, it’s about working out national debt and growth and such, and the plutocratic measure fits into that framework whereas the democratic does not.
I had started typing that almost in the spirit of making excuses for the govt, but now that I see it written down it actually sounds even worse. They aren’t trying to hide cost of living increases, they aren’t even bothered about them.
17 May, 2008 at 1:14 am
well have you seen the expenses for MP’s? And the wage for that matter, it’s all gravy. Couldn’t copy and paste and email the article could you??? Pretty please?
17 May, 2008 at 1:18 am
yeah no worries. but be warned, it’s longish and mathsy.
17 May, 2008 at 1:23 am
Wasn’t that the rejected tagline for ‘A Beautiful Mind’!
17 May, 2008 at 1:23 am
ok there’s a beautiful pdf wingin its way to you across cyberspace
17 May, 2008 at 1:28 am
ta, got it already, them zeroes ‘n’ ones are fast! Much obliged.
Holy shit it’s very mathsy, now just remind me what comes after 11?
17 May, 2008 at 1:48 am
Wasn’t that the rejected tagline for ‘A Beautiful Mind’!
They missed a trick there. I’d have paid good money to watch that. By the way, have you been down to the Tomb today? Your Friday! spots have started a trend.
The mathsy bits can be skimmed over really, it’s far simpler than it looks. Put let’s take an example. Say I spend £2 on food and £1 on jewelry, you spend £3 on food and £3 on jewelry, and Rafael spends £4 on food and £8 on jewelry.
With a plutocratic index, we would look at the amount we all spent on food (2 + 3 + 4 = £9) and jewelry (1 + 3 + 8 = £11), and give a 55% weight to jewelry and a 45% weight to food.
With a democratic index, we’d look at the proportion of our respective expenditures we all spend on food (2/3,1/2,1/3) and jewelry (1/3,1/2,2/3) and take the averages, thus giving food a weighting of 50% a jewelry also of 50%.
If food prices were going up more quickly than jewelry prices, then the plutocratic index would underrepresent inflation compared to the democratic index. Of course the numbers I chose were for convenience only, in the real world incomes are distributed more unevenly. The greater the levels of inequality within a society, the greater the difference between the democratic and plutocratic measures. Given that the richest third of the population surely have a lot more than 4 times the spending power of the poorest food, the discrepency will be far greater in reality than in my example.
17 May, 2008 at 2:26 am
You lost me on ‘£2 on food’! (Rafael, £8 on jewellery? He must have a secret bling stash! Although for my £3 I got some silver earrings from Argos!)
No, that simplifies it usefully I get the idea, even with the democratic measure it still isn’t a great expression for how the lower income people get by. I mean as economist maths it works but as representing the real life experience it is pretty cold and y’know I just want to shout -Hey until everyone has an ok deal fuck the jewellery buying poshclogs that money goes to the poor!
I suppose really separate indexes for essentials would be more telling of the experience for the poorest third, ultimately it is no great tragedy if you can’t afford a third home or a second Ferrari, but when you are making a decision on food or rent that really matters (and until people don’t have to do that I have zero concern for rich wankers moaning about their investments, and don’t get me started on all those property TV shows- Gideon & Martha want to get a flat in the city and a farmhouse for the weekends- grrr).
Ah yes the Tomb, I think he’s done it a few times, so can’t claim much trend starting except to say I think we shouldn’t be afraid of kicking off our boots and getting down and being fun. We need to win hearts, minds & groove thangs!
(of course A Beautiful Mind is about Nash who while having severe paranoid schizophrenic episodes did the work detailed in The Trap, theories that would shape society to suit paranoid selfish repressed consumers… otherwise known as Milton Friedman!)
17 May, 2008 at 5:53 pm
Even the author of that paper suggests seperate measurements for seperate income groups, and points and places that have implemented that. The demo index is usually more representative, but absolutely agree the economaths is only a tiny narrow part of the story.
17 May, 2008 at 7:43 pm
Yes, I’m sure many arrogant and brilliant economathematicians believe they can model the human condition mathematically, (maybe Friedman had an expression for testicles+ electrodes=economic reform) but they should confer with the artists and philosophers, we are not lonely selfish robots!
17 May, 2008 at 8:34 pm
Oh and let us not forget regressive sales taxes. They eat up at the margins of those with limited (or in the case of retirees, fixed) incomes.
17 May, 2008 at 8:34 pm
As for bling, don’t want it, don’t need it. Its so 14th Century.
17 May, 2008 at 9:15 pm
Yes, sales tax (here called VAT) is a very sneaky way of screwing the less well off.
Are you telling me Dave overestimated your appetite for jewellery? Or maybe it was a gift????Hmmm
Or maybe you are covering up your secret bling addiction, ok look at this-
http://usversusthem.files.wordpress.com/2007/11/bling-bling.jpg
Tempting eh?
17 May, 2008 at 9:41 pm
The next Pope?
17 May, 2008 at 9:52 pm
Consider yourself excommunicated young man!