Things Don't Go Well When New York Fed's Dudley Compares Food to iPads
This comment goes a long way to show how disconnected central bankers are from reality. Surely they've seen their wingtips and filet mignon get a bit pricier lately but if it doesn't fit neatly between the lines of their sweet ass models, it just doesn't make sense to them. The funny part is I guarantee you Dudley was shocked when the audience practically booed him.
Via WSJ's Real Time Economics:
The iPad 2 may prove golden for computer maker Apple Inc., but, for one Federal Reserve official, its invocation was a lead balloon.
Consumers didn’t want to hear about the iPad 2′s value when they were complaining about grocery inflation.
New York Fed President William Dudley on Friday cited the new improved tablet as an example of the economy’s dearth of upward inflation pressures. But for a Queens, N.Y., audience more worried about the price of food, that didn’t go down so well.
The central banker hit the iceberg when he was trying to defend his belief–one shared by many private-sector economists–that underlying inflation in the U.S. economy is low despite a worrisome surge in commodity prices which Dudley said the Fed would be “unwise” to overreact to. The grief Dudley got indicates the Fed is facing a growing gulf between how it and the public at large perceives inflation. If this disconnect widens, it could risk undoing the public’s confidence that the Fed will be able to keep price pressures at bay.
Dudley’s day went south when he was pressed by several audience members about how he can view inflation as low when things such as grocery prices are marching higher. One participant asked “when was the last time, sir, you went grocery shopping?”
The central banker told the audience “I certainly acknowledge food prices have gone up.” But he added some prices are lower and noted “Today you can buy an iPad 2 that costs the same as an iPad 1, that’s twice as powerful,” as an example of favorable price dynamics. His example was greeted with widespread grumbling in the audience, in a display of conspicuous discontent unusual for a Fed speaking event.
The funny part is for those of us seduced by technology, we might splurge on a pricey piece of technology like the iPad once every couple of years (if we can afford it). Meanwhile, energy and food are daily requirements and those of us less fortunate than Dudley who actually have to get out there and scrape together our paltry pennies for a meal and some gas are certainly feeling the pain.
To be dismissed in public by the president of the New York Fed as if they are all fools is offensive and just goes to prove that these guys are so horribly disconnected from reality they don't even see how stupid their thoughts are when verbalized in front of audience of poor shlubs sans PhDs. Surely Bill Dudley realizes that the Fed should be doing all the ass-kissing they can lest the sheep revolt and burn down the marble temple a la Libya, do?
People will only let you push them around so much, you know. I know that. You, dear reader, know that. What's it going to take for these assholes to get it?