I used to be bothered by core rate blather about inflation. I thought it preposterous. I believed it was merely designed to ease people’s worries about the true rate of inflation by pretending that food and energy, two absolute necessities of human life, could be excluded from a “core rate” measure because they’re “volatile” — as if most other factors that go into computing inflation are not also volatile from time to time.
But core rate thinking doesn’t bother me anymore. Indeed, I’ve come to feel that were a comparable methodology applied to a lot of other economic news, we’d all immediately see that this is the best of all possible worlds and become happy as chipmunks.
Consider the matter of employment. Its core rate (as the name makes obvious) is rightly viewed as the percentage of people who are employed. And by simply excluding those not employed from consideration, which is appropriate because unemployment numbers are so volatile from month to month, the core employment rate in this country today is quickly seen to be 90-plus percent. Nine out of ten people are working! Put that in your bong and smoke it you lefty nay-sayers.
What about the one in seven Americans who now receives food stamps? That number has been rising dramatically since the 2008 market crash, which certainly qualifies it as volatile. Those dependent on food stamps are therefore not part of the national eating core and can be safely ignored. Think of it. Six in seven Americans can still afford their own food! What’s bad about that?
There are approximately 80 million privately owned single family homes in America and no more than four million are in foreclosure at present. The core home ownership rate, excluding volatile foreclosures, thus stands at about 95 percent. Sound like a booming housing market? You betcha!
Now look at personal bankruptcies. Between fiscal years 2007 and 2010, they went from 801,000 to 1.04 million to 1.4 million to 1.6 million, a volatile increase of 13.8 percent in just the last fiscal year. With roughly 150 million Americans in the national work workforce during this four year period, the core rate of American non-bankrupts exceeds 99 percent. Talk about a solvent nation!
It’s time for people to stop focusing on their personal economic and financial troubles and look at the Big Picture that economists and folks at the Fed are seeing — a Big Picture focused on the economic core of things. Doing that one quickly sees that every day, in every way, things are getting better, and better, and…