Inflation Actually Near 10% Using Older Measure

Welcome Back, Carter!

John Melloy in CNBC's Fast Money:

After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things.

Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse...

If the Misery Index = Unemployment rate + Inflation rate, then, with 10% inflation and unemployment over 9% (17 if you figure in those who have quit working, are underemployed or ran out of benefits) , then Obama's is close to, if not higher than Jimmy Carter's 19.72!

H/T Memeorandum

Cross posted at LCR, Say Anything.