When Harry Potter is troubled by dementors (a sensation horridly familiar to all of us in These Troubled Times, including people who have never opened a Potter book nor seen the movies--we just call it BSS) he waves his wand and yells the spell Expecto patronum and out from the end of his wand pops a stag. This is a Good Thing when it happens for Harry, because it chases the dementors away so they don't suck out his soul.
For the muggles amongst us who have no wands nor such wizardly powers, the appearance of a sort of inflatable stag is Not Such a Good Thing. At least in the economic sense. For all who live in the real world where gas just popped up another 20 cents or so at the pump today, and yet another year has gone by without a raise, and the health insurance premium and copay just went up again, et neverendingly cetera--this is why those cheery economic reports have been making less and less sense over the past few years:
(via a diary at dKos):
1. Real inflation paid by real people is moderately high.
2. Since wages are nowhere near keeping pace, real wages are dropping.
3. Real unemployment - that is the kind you and I feel, rather than the kind Greenspan feels - is also reasonably high historically. (Check out the graph).
4. Historically speaking an inflation rate of 5.8% and an unemployment rate of 7.2% is a crisis that calls for drastic government action.
5. That's why Bush is unpopular.
Applying the same logic to GDP, one finds something interesting - while CPI is raging, GDP inflation is far more subdued, asset inflation in the economy as a whole tamer. But it is still worse than we are being told. If GDP inflation is higher than we are told, then the GDP numbers being promoted as a sign of a "good" economy are not there.
Under normal circumstances, this would be called what it is: stagflation.
There are some people I'd rather be, economically speaking, these days--"somebody with money" is a concise way to put it--but there are a great many more people I'm happy I'm not:
We'll just list one of them now, lest this post run on excessively ("To make a long story short, she said belatedly")--:
I'm glad I'm not a person who bought a Humvee or Lincoln Navigator or similar tank about two years ago. I would still have three years left to pay on it, most likely, at a pretty sizeable clip per month. It probably doesn't get even the miserable mileage it managed when new, and I'd really like to trade it in on a Prius. Only I still owe probably $30 grand on the Hummer, and since nobody else wants them now either, it's only worth half that.
Sucks to be that person, eh?