Politics & Policy

Captain Cooked

A doom-and-gloom financial pundit rebels against reality.


John Browne is a columnist and editor for the financial section of NewsMax.com, which pushes hard on the themes of doom, gloom, and depression (the economic kind). For a long time Browne has been warning readers about the destruction of the dollar and out-of-control inflation. This week, Larry Kudlow, on his CNBC show Kudlow & Co., called Browne on all this pessimism: Where’s the inflation? Larry asked. It’s not in the CPI, which is low. It’s not in interest rates, which also are low. Stocks certainly don’t seem to be worried about a coming financial Armageddon. So what gives?

Browne’s answer was that the numbers in the consumer price index are “cooked,” as in, they’re not reliable. The CPI says 2.6 percent price inflation, but John Browne says it just ain’t so.

Interesting approach: Formulate a theory. Use it to make a prediction. And when the prediction fails to come true, blame the numbers.

Most economists who’ve looked closely at the CPI say the measure actually overstates inflation. But be that as it may, what about all the other inflation stats? Is core CPI cooked? Are the producer price index (PPI), the personal consumption expenditure (PCE) deflator, the implicit price deflator, and the chain-weighted CPI all cooked? How about the massive, several-trillion-dollar bond market? Is it dead wrong, too?

Maybe the simpler explanation is this: Supply-side tax cuts, deregulation, and increased international trade have encouraged growth and competition, which together have kept prices down.

In other words, the Bernanke/Bush boom has a little steam left in it yet.


The Latest