## In Defense of (Some) Bubbles

There’s a lot of talk on the Internet right now about confirmation bias.

I’ve put a lot of effort into looking “outside my bubble,” or outside my circle of confirmation bias. I’m actually pretty good at talking with people from the “other side” of various issues. It isn’t that hard — at least, not after nearly forty years of (professionally) trying to suspend confirmation bias long enough to dig out what is really causing a piece of software to malfunction.

But when it comes to the so-called conservative/liberal divide, while I can go through all the same steps, when I get to the bottom — well, it’s more work, because people are evasive in ways that hardware and software are not, and in the end, it’s always a bitter disappointment.

One example in particular stands out in my mind. I wrote something, and a reasonably articulate fellow called me a fool and a lot of other things, including a “typical liberal.” I engaged him in conversation: real conversation. I asked questions. Lots of questions. I did not challenge the truth of anything he said. I asked him to clarify things I didn’t understand. I repeated back what I thought he had said, in my own words, and allowed him to correct me. I really tried to gain a coherent understanding of his point of view.

In the end, I succeeded.

He offered the key by volunteering that, really, the basis for what he was saying was that he believed in Satan as a literal manifestation of pure evil, and that Satan was in control of the President of the United States.

If what he believed about Satan was true, then his conclusions were not entirely unreasonable. I understood his point of view.

Of course, if what he believed about Satan was not true, then his conclusions were bat-shit crazy.

I write a little fiction, mostly sci-fi and urban fantasy, and a big part of world-building is starting from bizarre premises — say, telepathic dragons at the top of a food chain that includes humans — and working your way through to what human society would look like under those conditions. Would we even bother to build cities? Would we live underground? Would we sacrifice virgins and worship the Great Worms, or would we fight against them, or would we just shrug and say, “Well, at least he didn’t eat me,” and go on about our business?

So yes, I can absolutely go there: a world where Satan really exists and controls whoever gets into the Office of the President. It’s actually kind of an interesting premise.

But is it real?

No.

Seriously. It’s not real.

Satan does not control the President of the United States, though the next-best-thing, Monsanto, has inordinate influence. But Monsanto is not actually Satan. They have chemists working for them, not imps, for God’s sake. And no pentacle or hexagram or binding spell or prayer of any sort will limit the destruction that neonicotinoids wreak on honey bee populations.

“But how do you know it’s not true?” the true believer asks. The answer is that, if it were true, it wouldn’t work out the way it has.

I’ve just read Fred Clark’s The Anti-Christ Handbook. Fred is a devout Evangelical, and he has deemed the book, Left Behind, by Tim LaHaye and Jerry Jenkins, the worst book ever written. I haven’t read Left Behind — I got over my interest in Rapture porn back in the 1970’s, and really don’t want to go there again, ever. But after reading Fred’s passage-quotes from the book and his hilarious chapter-by-chapter analysis — call it Mystery Apocalypse Theater 3000 — I have to concur with him. Left Behind has to be the worst book ever written.

I don’t know how Left Behind ever got published, much less go on to become one of the biggest best-sellers of all time. The writing itself is … well, “putrid” is entirely too timid a word, and “horrific” conjures images of something far more interesting than the writing deserves. It’s just bad writing. Really bad writing. But in the end, as Fred points out, the single thing that Left Behind accomplishes, and does quite well, is to establish, beyond any shadow of doubt, that the Premillennial Dispensationalist Rapture and the events supposedly prophesied to follow could never, ever happen. The Rapture might — the fantasy-writer in me allows for that — but it would set into motion a chain of events that would render every subsequent “prophecy” completely impossible.

It’s like writing a story where you say, “On Thursday, aliens blew the planet Earth to smithereens. <new paragraph> The next morning, John was irritated that his bus, the 14th-Street crosstown, was a full ten minutes late, and he had a very important presentation for a prospective new client.”

We can suspend our disbelief in aliens long enough to accept the premise that they might blow the Earth to smithereens on a Thursday morning. But if they do, John is not going to be “irritated” that his usual bus is late, much less ten minutes late — implying that it’s still running its route, despite the fact that the East end of 14th Street now sticks out about ten feet into the vacuum of outer space. Assuming John has survived at all, the last thing on his mind will be impressing a potential client who is most likely a charred corpse floating, frozen, in an independent orbit around the sun. If a bus ever shows up, it will be something like ten billion years late and driven by something with six arms, and John won’t be around for that.

This story about Satan controlling the President isn’t true, because it doesn’t make any sense. What’s Satan doing up there? Biding his time, setting the stage for his Big Get-Down Evil Plan by — bwa-ha-ha — providing federal medical insurance exchanges for families? Right.

Even applied to Dick Cheney, one of my favorite candidates for an avatar of pure evil in US politics, it doesn’t make any sense.

I’ve grown tired of trying to make any sense of the modern conservative point of view, because every time I’ve tried, I’ve eventually hit a point where I hear that Satan controls the President, or something even more bizarre. I’m tired of venturing into those waters, and trying to understand the crazy.

I no longer think there’s anything out there but the crazy.

So I’m going to stay in a bubble of not-crazy, and call it good.

## Sourdough and wine

Marta made her own sourdough late last week.

One of the best parts of homemade bread is cutting a slice while the loaf is still warm. Today, I made a sandwich with it.

Now I’ve had sourdough before, but what I’ve gotten from the grocery store and even high-end bakeries is tough. The crust — especially from bakeries — is hard enough to cut your gums if you chew too fast, and the insides are so … resilient … that by the time I’ve finished chewing, my jaw is tired. Gods help you if you have something squishy inside a sandwich made with commercial sourdough — like tuna salad, for instance. It’s like putting tuna salad between two boards. By the time you’ve gnawed through the boards, all of the tuna salad is on the plate, or all over your hands. On top of that, the bread is usually so sour that it really doesn’t taste very good — like it’s been sprayed with vinegar.

Marta’s sourdough has a crisp crust, which comes from putting water on it while it bakes (same trick, different recipe, produces bagels and pretzels). But it isn’t dangerous to bite into. And the chewy part is, indeed, chewier than her normal bread, but only a bit more — you could actually make a tuna salad sandwich with it, and not need a fork and chainsaw. There’s a touch of vinegar in the taste, as there should be, but the prevalent flavor is dough, not sour.

It got me to thinking.

Because, you see, exactly the same thing happened with beer in the Colorado microbreweries I used to frequent, before I moved to northern California. In the beginning, the microbreweries made good beer. No, they made damn fine beer. Better than anything I could make, so I stopped brewing beer. But then something happened. I think all the breweries started trying to differentiate their products, and somehow, this turned into a race to produce the hoppiest beers, meaning (in practice) the bitterest beers, as measured in IBUs, or International Bitterness Units. So the early signature microbrews, with an IBU of maybe 20 on the 100-point scale, started to give way to brews with an IBU of 90. This could be qualified subjectively as, “So bitter, it will give you lockjaw.”

I remember that wines went the same way, for a while. Merlots — which are named after the variety of grape they are made from — normally have a pretty high tannin content compared to other red wine grapes, which gives something called “oak” to the wine. This is doubtless because oak wood is also very high in tannins, so much so that (as I recall from the novel My Side of the Mountain, which I read when I was very young), you can soak a rabbit hide in water pooled in an old oak stump to tan the hide into leather. When you drink an oaky wine, it manifests as a “dry” sensation in your mouth, like your mouth is turning to leather. Shortly after Merlots became popular as a gateway wine for newcomers to the red wine scene, it seemed to turn into a free-for-all about who could produce the oakiest Merlot. There are now some Merlots out there that are so oaky, your tongue will cleave to the roof of your mouth and you will be unable to speak for a week. It’s almost a practical joke.

Which then takes me back to graduate school. One of the popular dining-out places — as a graduate student, we ate out all the time, because (basically) no one’s living arrangement allowed for cooking — was a little Chinese restaurant in a strip-mall next to the big Huntington Mall near Stony Brook. They did have excellent food, but the students and professors got into a kind of informal competition regarding the capsaicin content of the food. Or, in other words, how “hot” can you take it? Of course, like any good competition, there has to be a scale, which turns out to be the Scoville Scale. The Jalapeño pepper, the mainstay of “hot” when I was growing up, has a Scoville score of a mere 1000-4000. There’s a pepper called a “Carolina Reaper” with a score of 2.2 million, according to Wikipedia. Much higher than that, and they start comparing it to chemicals with the letters “toxin” in the name. I don’t know where some of those meals came in on the Scoville Scale, but I’d guess well north of 100,000. They say of such meals that you should eat the food with marbles — that way, when you are sitting on the toilet the next day, the marbles will splash the water and cool the afterburn.

I’m declaring the “snarf rule.” If it’s a good (or great) wine, or beer, or food, you should be able to snarf it. Guzzle the wine. Chug the beer. Stuff your face with the food after working all day in the yard and skipping lunch, and then give forth an appreciative belch.

I’m not saying you should actually do this, or even that you should want to. But you should be able to.

If the thought fills you with a kind of horror, and the sense that maybe you need to check the fine print on your medical insurance policy, then the wine, or the beer, or the food is perhaps not nearly as good as you are trying to pretend it is.

Come to think of it, this is probably not a bad rule for a lot of life….

## Symphony is Finished

All four movements are up on the music page, now, in the correct order.

The fourth movement is a short night, and a glorious dawn. The opening clarinet harkens back to the child falling asleep at the end of the second movement. Night has fallen, and deep in the woods, the drums begin their fitful call as the night drummers find their places. They drum through the night until the first birdcalls of the false dawn. And then, finally, the sun rises.

Composing this, then performing and recording it with Themon’s Electrophilharmonic Orchestra II, has been quite a trip for me.

I remember my first composer’s competition: the 1972 Wyoming Music Teachers’ Association held one, which solicited compositions from junior high school students around the state. I’m not sure I placed that year, but I placed in the 1973 competition and got to perform the work, a little two- or three-minute piano piece.

By the time college came around, I was just too busy to do any composing, and in those days, of course, there was no Themon’s Electrophilharmonic Orchestra or anything like it. The closest then would have been the old MOOG synthesizer (introduced in 1967, and used by Wendy Carlos to create the album, Switched-On Bach.) A synth was no more affordable than renting out an orchestra in those days. So composing meant you either wrote solo works for an instrument you could play, or you gathered musicians, just to find out what it really sounded like. The more ambitious the work, the more the investment required for (and by) the musicians.

A full symphony was pretty much out-of-reach. It was a kind of catch-22. You could not attract the musicians for a performance unless you had a good reputation. But you could not get a good reputation without successful performances.

It had always been that way. Beethoven had no trouble pulling together his ninth symphony, a technical monstrosity with a large orchestra, a full choir, and four soloists — but his first symphony, which was performed when he was just thirty years old, was his “break” into the composing business, and I suspect it was rather more difficult to get that one performed.

It’s different, now. Someone with more experience than I have could do a much better job of performing this, and a good sound engineer could make it sound like honey and roses. But all by myself, I can — after struggling through the manuals and a bunch of trial and error — pull off a creditable symphonic performance and share it with people.

And that is simply amazing.

I hope you all enjoy the result.

## An Open Letter to Old White Conservatives

I get it.

You remember growing up in a world where your father had a stable job, Mom stayed home to raise the kids, you had a house and a car and a television and walked to school, and no one thought twice about you rocketing out the door on a Saturday morning with a “Going to Ronnie’s back for lunch love you!” shouted over your shoulder.

You see all the bad news today, the school shootings, the beheadings in Syria, the constant rise in grocery prices while the official “inflation” remains zero and “cost of living” increases  never happen; you see the disappearing middle class, the hardworking class, your class, and the declining hopes for a better world for your children. You’re scared, you’re angry, and you want someone to do something for God’s sake!

I feel the same way. Exactly the same way.

Here’s the problem. We’ve been lied to. All of us. Wholesale.

We’ve been told all our lives that capitalism is what brought us our idyllic childhoods.

The truth is, capitalism is what came before our childhoods. In fact, for most of us, it came before our parents’ childhoods.

Capitalism is also what came after we entered the workforce, right about the time everything started going downhill.

What we had during our childhood — what we all grew up with — was democratic socialism.

It’s especially interesting to read what our grandparents and great-grandparents had to say about capitalism and capitalists. Unless your family name is Astor or Rockefeller, what your great-grandparents had to say about capitalists was not fit for children’s ears. They said that the rich robbed the poor; they said that wealth corrupted politics, and made a mockery of justice; they said that prosperity for the common man was a bad joke or an impossible dream, or both.

They had more than idle complaints. They walked off their jobs. They had sit-ins to prevent other workers from using their tools and machinery. They sabotaged the machinery so that no one could use it. They armed themselves.

They also got beaten, shot, and killed. By private cops, like the well-known Pinkerton Agency. By city cops. By the US Army. But conditions under the capitalists were so bad, so frankly unlivable, that they kept striking, rebelling, organizing, and raising Hell, to the point that Franklin Roosevelt, in the 1930’s, in the midst of an unparalleled economic catastrophe brought about by the capitalists, was advised by the capitalist class — from which he came, and which he represented — to suspend the Constitution and establish a fascist dictatorship in the US, as was already happening in Italy, Germany, Spain, and Portugal.

Instead, Franklin Roosevelt pushed through a limited form of democratic socialism.

That is what all of us old white folk grew up with. Democratic socialism. Not capitalism.

In the 1950’s, the political class and the capitalists decided to simply appropriate our American form of democratic socialism and call it “capitalism,” and then compare it (loudly) to the totalitarian socialism over in the Soviet Union. Totalitarian socialism in the USSR was a disaster: it was as big a disaster as the democratic socialism in the US was a success.

In the 1980’s, the capitalists — with the help of government — started to dismantle democratic socialism in the US, to try to bring back capitalism of exactly the same sort that existed in the 1880’s. The US has grown more capitalistic every decade since 1980.

And everything has gradually gone to shit.

This is not a coincidence.

So when you look to someone like Donald Trump as your Great White Hope because he is a capitalist, you should understand that he is not going to bring back the America of your childhood. He is going to bring you — if he can — the America of your great-grandparents’ childhoods: the kind of place your great-grandparents fought and died to end, because they frankly had nothing left to lose: the capitalists had taken it all from them, and wanted more.

By looking to capitalism to save us, you are throwing gasoline on a burning house. You are putting a fox in the henhouse to guard the hens. You are hiring a pedophile as a babysitter.

You will not be pleased with the outcome.

If you want your great-grandparents’ capitalism back — the thing they fought to end — vote for Trump.

If you want to continue the decline of the past few decades, vote for Hillary or any of the other Republicans.

If you want to return to the America of your childhood, an America with a future for our children, vote for Bernie.

## The Bubble People

I wish I could preserve for posterity the article, and especially the conversation that follows, because when future historians scratch their heads and wonder how a national superpower like the United States suddenly flipped over and sank to the bottom of an ocean of red ink with no warning and no corrective actions taken, they could read this article, and all would become clear.

Here’s the graphic the article was built around:

The graph doesn’t make much sense, and the longer you stare at it, the less sense it makes.

The article is a long one that attempts to tease meaning out of this chart. But the chart has a glaring flaw. Does anyone else see it?

It’s right up at the top: “in 2014 dollars.”

Of course, in 1971, people weren’t earning or spending 2014 dollars, they were using 1971 dollars, which — due to inflation eroding the value of the dollar over the intervening four decades — were worth a lot more in terms of what you could buy. When people publish these “adjusted for inflation” numbers, they use the official “inflation rate” figures published by the Department of Labor Statistics to determine how much value the dollar lost over the course of four decades, and cite an income people would have been making in 1971, had they been using the less-valuable 2014 dollars.

This calculation is critically dependent on the inflation rates used. Let me demonstrate just how critical this is.

Inflation, like compound interest, is exponential in nature. You take your original value, multiply by one plus the interest or inflation rate, and repeat forty times to get from 1971 to 2011 (forty years). It looks like this:

$(1&space;+&space;\frac{rate_{nom}}{100})^{40}&space;=&space;p_{nom}^{40}$

The “nom” subscript stands for “nominal,” meaning “named” or “official.” So if you have a nominal 3% inflation rate, it looks like:

$(1&space;+&space;\frac{3}{100})^{40}&space;=&space;1.03^{40}&space;=&space;3.26$

That means overall prices will more than triple over the course of forty years. We all know how this works: we’ve been living with it our entire lives.

Now, let’s say that this official inflation number is too low by a tenth of a percent: that the actual inflation rate is 3.1%, while the official value is 3.0%. Since inflation figures are generally only cited to one decimal place, a consistent rounding error could make the number wrong by this amount.

It’s convenient in what follows to consider the fractional error:

$f&space;=&space;\frac{p_{act}}{p_{nom}}$

If we look at the actual inflation, we get:

$(p_{act})^{40}&space;=&space;(\frac{p_{act}}{p_{nom}}&space;\cdot&space;p_{nom})^{40}&space;=&space;(f&space;\cdot&space;p_{nom})^{40}&space;=&space;f^{40}&space;\cdot&space;p_{nom}^{40}$

In our example,

$f^{40}&space;=&space;(\frac{1.031}{1.030})^{40}&space;=&space;(1.00097)^{40}&space;=&space;1.0396&space;=&space;(1&space;+&space;\frac{3.96}{100})&space;=&space;3.96\%$

It’s a little shocking, when you turn this into wages. If the economists consistently rounded down when reporting the general inflation rate, your inflation-adjusted salary in 2011 should be four percent higher than they say it should be, based on your 1971 salary. That’s more than most of us have seen in a cost-of-living adjustment in years.

Just for fun, let’s see what would happen if the economists were off by a full percentage point.

$f^{40}&space;=&space;(\frac{1.04}{1.03})^{40}&space;=&space;(1.00971)^{40}&space;=&space;1.472&space;=&space;(1&space;+&space;\frac{47.2}{100})&space;=&space;47.2\%$

An error of a single percentage point on a three percent nominal inflation rate means that their comparison would be off by 47%. It means that a 1971 salary was worth half-again as much as the official inflation-adjusted numbers indicate. Which means that the peak of the blue curve above, sitting at around $50k, would need to be stretched to the right to$75k.

And that, my friends, tells an entirely different story about the economy.

So just how accurate are these nominal inflation values?

One thing we always had to do in my physics studies years ago was to come at a problem from multiple directions, calculate results with different simplifying assumptions, and see if the numbers all kind of fell in the same ballpark. If something was way out of whack, we’d have to go back and try to figure out the mistake. I still do this kind of thing every few months with software development issues, especially when making performance measurements.

So I started with annual nominal inflation rates published at the US Inflation Calculator. These are Consumer Price Index values from the Bureau of Labor Statistics, and are presumably the same numbers Financial Times used. I made a little spreadsheet, plugged in the numbers, and computed cumulative inflation rates from 1960 to 2015, then checked it against their inflation calculator on the website, and my spreadsheet matched their calculator. So I got that much right.

I then took the period from 1960 to 2006 (I’ll tell you why in a moment), and computed an “averaged” inflation rate over those 46 years: meaning, I computed the inflation rate that, if it were exactly the same, year after year, would result in the same endpoint of 6.814, which is the overall inflation in prices between 1960 and 2006, according to the government economists. For the geeks out there, this is:

$p_{avg}&space;=&space;e^{\frac{\ln&space;6.814}{46}}&space;=&space;1.0426&space;=&space;(1&space;+&space;\frac{4.26}{100})&space;=&space;4.26\%$

So the government says that from 1960 to 2006, there was an “average” inflation rate of 4.26%, resulting in a nearly seven-fold increase in prices.

Now the problem is that in 2006, I sold my father’s house to pay for his nursing care, after restoring the original wood floors and generally bringing it back to its original 1960 condition, and it struck me that the house sold for almost exactly ten times what he’d paid for it (new) in 1960. This intrigued me, so I went back and did a little research, and found that prices across the board — cars, food, dinner out, children’s clothing — were all about ten times higher in 2006, compared to 1960. Even gasoline was about ten times higher: $0.35/gallon compared to the (wildly-fluctuating)$3.50/gallon in the mid-2000’s.

There’s more than a bit of a difference between a seven-fold increase, and a ten-fold increase. In a physics or engineering problem, this is a clear sign of a severe mistake in the calculations, somewhere. (Except in astrophysics, of course. Sorry, it’s an inside joke.)

If I compute an average inflation rate for the observed ten-fold increase, I get:

$p_{avg}&space;=&space;e^{\frac{\ln&space;10}{46}}&space;=&space;1.0513&space;=&space;(1&space;+&space;\frac{5.13}{100})&space;=&space;5.13\%$

This seems to indicate that the economists working for the Bureau of Labor Statistics were off by, on average, about a full percentage point for the forty-six years from 1960 to 2006. Over this period, their error fraction would be:

$f^{40}&space;=&space;(\frac{1.0513}{1.0426})^{46}&space;=&space;1.465&space;=&space;(1&space;+&space;\frac{46.5.4}{100})&space;=&space;46.5\%$

So that means if this Financial Times chart had “inflation-adjusted” a 1960 salary into 2006 dollars, the adjustment would make the 1960 salaries too low. You’d have to boost them by almost half again to correctly compare with 2006 salaries.

I haven’t done the research on 1971 prices compared to 2015 prices, but I see no reason to think economists have gotten any better at their jobs in the last nine years. So I went ahead and drew this (I don’t have FT’s actual numbers, so I had to eyeball it from their chart — it should be pretty close):

The orange line is what happens when you apply the correction for underreported inflation rates. [For you wonks, I simply multiplied the x-axis values of the blue curve by the error factor of 1.465, and divided the y-axis values by 1.465 to normalize the area under the curve.]

I also found their cutoff at $200k extremely peculiar. According to most sources I’ve seen (e.g. CNNMoney), the top 2% of income starts at around$300k. But their 2015 data (the red bars) stops at $200k and only totals to about 92.5% of the population, leaving that last 7.5% or so unaccounted for — they lump it all into the$200k+ category, which accounts for the huge spike at the end of the chart. I went ahead and fudged in 5.5%, spread out in a tail between $200k and$300k, which then leaves 2% making above $300k. Interestingly, the blue and orange curves, representing inflation-adjusted 1971 values, also account for about 99% of the population, giving a 1% spike at the end. As I said, this now tells a very different story. The blue curve still makes no sense at all, and it takes a long article of econobabble to ultimately fail at explaining it. The orange curve clearly shows the decline in income for most people since 1971, and the collapse of the middle class. It looks exactly like what most of us have experienced: hiring freezes, capital budget trimming, layoffs of skilled workers, people picking up what low-paid work they can just to keep body and soul together. All I had to do to correct this was to look at actual price increases over the period from 1960 to 2006, determine that the Bureau of Labor Statistics apparently underreports inflation by about one percent on a consistent basis, and then apply that one percent correction to the article data. This is more than just a little disturbing. If the Bureau of Labor Statistics is systematically low-balling the inflation figures, it has profound repercussions throughout every measure of the US economy. Among other things, it means that the US economy isn’t growing as fast as reported, and may not be growing at all. If you look into the methodology the Bureau of Labor Statistics uses, and read some of the critiques, there is clearly game-playing going on. Which makes sense: governments don’t like to see high inflation numbers, and it is pretty easy for them to lean on people to figure out ways to misreport the numbers, year after year. Let me give just one amusing example. Hedonics. It works like this (and I choose exaggerated examples, for effect, but I believe this is essentially accurate): Let’s say you want to compute inflation between 1927 and 2015, based on car prices. So you look up the cost of a new Ford Model T in 1927 ($360), and the cost of a popular low-end car in 2014, say a Ford Fiesta ($14,500). “But wait!” cries the professor of Hedonics. “That’s not a fair comparison. The Fiesta is a much better car. It has windshield wipers! And a radio! And electric locks! And the paint lasts longer!” So they start discounting the “improvements” to the Fiesta, using estimates of the desirability of those features in an open market (how much you’d pay for those windshield wipers if they weren’t included), and end up with an imaginary car that is equivalent to a Model T, and would sell for$5000. So the Hedonics-adjusted inflation is based on the change from $360 to$5000, not $360 to$14,500. That additional $9500 is paid for actual value, and doesn’t count as inflation. The obvious fallacy, here, is that you cannot buy the Model T equivalent car for$5000, or for any price, because it doesn’t exist. If you want a new, low-end car, you have to pay $14,500, and you get the “improvements” whether you want them or not. Another Hedonics trick is to make substitutions of “equivalent value.” If you can’t afford beef because the price of beef is going through the roof, you can just switch to mayonnaise and Soylent Green, which is (according to someone) nutritionally equivalent, and costs exactly what beef used to cost. So, you see, there is really no inflation at all. The key is to understand that all of these various “fine tuning” methods somehow always lower the consumer price index. They never raise it. Especially compared to the commonsense meaning of inflation, which has to do with how far your paycheck will stretch in buying the necessities that are actually available for purchase. Over time, this game-playing means that both government and private enterprises are flying blind, and are merely telling themselves comforting bedtime stories about the economy, believing their own propaganda. Which brings me back to the Financial Times article. I don’t read Financial Times, and after this exposure, never will: it appears to be the Fox News of the financial industry. But the comments on this article were priceless. I have decided to call the Financial Times readers The Bubble People: they live in little bubbles of illusion that float free of the Earth and all its troubles and cares, and the messy reality of it all. I imagine they have personal assistants who actually pay the bills. For instance, The Bubble People here complain quite a bit about how “ungrateful” Liberals are, since the graph (the original FT chart) clearly shows that things are much better for the common people: see how many fewer are making less than$50k, and how many more are making over $100k/year, compared to what people were making in 1971? People should be grateful they aren’t living in that icky lower-income bulge any more, and have been pushed into making more money. But no, they aren’t grateful, they just complain — that’s just what those Ungrateful Liberals do. The Bubble People also gush about how cars and computers (and yachts?) are ever-so-much better these days, and how they think Hedonics makes perfect sense. It’s a better car, dammit, of course it should cost more. Has nothing to do with inflation. Nothing at all. The real irony, however, is that these are the people who don’t trust the government. You see them telling each other that corporations produce all the good things in life, and the government just gets in their way and screws things up. Yet it never seems to occur to even one of them to question the inflation figures that come directly from the government they so completely distrust. Maybe they’re just ignorant: perhaps they don’t realize that “inflation-adjusted wages” are adjusted based on inflation rates that are generated and published by the government. More likely, of course, is that they think with their appetites, rather than their minds. When a chart tells them something they want to believe (like things are getting better for those “common people” who make less than$200k, or Liberals are all stupid whiners), then the chart must reflect reality.

I don’t know if the Bureau of Labor Statistics is underreporting inflation rates. Maybe Mr. Alan Smith of Financial Times made some other error in posting that blue curve, and simply needs a dope slap. My little mathematical exercise above is nothing more than suggestive. But were I in charge of the Bureau of Labor Statistics, I would be asking some deadly serious questions, with a number of economists’ jobs on the line.

Because this isn’t just an academic matter. If the CPI is chronically understated by one percent, then no one — not one, single working economist or financial expert in the country — has any idea what the economy is actually doing. If the orange curve above is anything like correct, it tells a story of economic pain on a vast scale. Pain becomes anger, and widespread anger is dangerous. People who become convinced that a game is rigged — whether rightly or wrongly — tend to kick the board over and start throwing rocks. Ask the ghost of Marie Antoinette: I used to think the “let them eat cake” story was apocryphal, but after reading the comments of The Bubble People in the Financial Times, I’m no longer sure.

N.B. Some minor corrections have been made to the calculations since the original version.