I know…the faithful readers were wondering "where is our morning blog?" Well, it is the afternoon but your busy dude here has been…well, busy–panel in the morning and, then, there was lunch…but I digress…

   Yesterday, there was a fascinating column in The New York Times–fascinating in showing out truly out of touch the columnist is. David Leonhardt, a Times’ economic columnist, had a piece that basically said to you’all: you don’t know how good you have it when it comes to inflation. His basic argument was this:

There is also something particular to inflation that aggravates loss aversion. Price increases are obvious. But price declines are often hidden. The cost of an item stays about the same for years, while everything else gets more expensive and nominal incomes rise.

When you dig into the Consumer Price Index, you start to realize just how many things fall into this category. The price of major appliances has been flat over the last year. Furniture is 1 percent less expensive. A decade ago, a basic four-door Toyota Corolla LE cost $16,018, according to the company. The 2009 basic model costs $16,650, and it’s a safer, more powerful, more fuel-efficient car than its predecessor.

To top it all off, most people don’t buy any of these items very often. “People tend to remember things they do frequently,” says Stephen Cecchetti, an economist at Brandeis University who studies inflation. “And what do you buy more frequently than gas and food?”

But combine the less noticeable trends with some true price declines, like a 5 percent drop in women’s clothing over the last year, and an inflation rate of 4 percent starts to seem more reasonable. Inflation really has gotten worse recently — it was only 2 percent a year and a half ago — but it’s not as bad as it feels.

    I added the bold. Actually, it is pretty bad. Here is why government statistics mislead because they don’t sqaure with the reality that most people endure. The government statistics, taken as a whole, might show inflation is "not as bad as it feels" but that misses the human reality. People can’t do without food or gasoline (well, people who rely on their cars certainly can’t live without gasoline). They can postpone buying a new car or a major appliance or even a new garment (I know, for some people that seems impossible).

   So, it’s not simply overall price increases that make people feel the way they do. It’s WHAT HAS ACTUALLY GONE UP and what is a necessity that people must pull out their wallets for.