Economic Misery Index - Govt Stats understated?

Ok. Well, I don't buy that. For a couple of reasons.

I believe inflation is.... MONETARY INFLATION.

Monetary inflation is arbitrary, and totally unrelated to whether workers are producing more or not. Many times, it is politically motivated.

Now, there is another fallacy at work here. That all workers become more productive over time. But we'll assume that is true.

Now in a single business, if my employee wages rise faster than my selling price, my margin shrinks, then I begin losing money. It is inevitable that I will go bankrupt.

Let's say that we carry this over to a larger economy. Despite the increase in the number of businesses and products, workers etc., the constants are wages increasing faster than inflation, productivity is responsible for the wage growth (meaning it is independent of the rate of inflation).

You still have the same problem. Wages will outpace prices, and every business will go bankrupt.

So problem #1 is inflation and wages are not connected to each other.

Problem #2, if workers can't pass off their productive gains, then the system resets. If they can pass on their productive gains, then there is zero upper limit on productive gain.

There are a lot more problems.

Unfortunately, your theory doesn't work.

 

It can't be all bad. Local sheriffs in Alabama can still feed inmates for $1.75 a day and still make a small profit. The Sheriff gets to keep whatever is left over.

The menu on a recent day in the Limestone County Jail was two pancakes and syrup, sausage and milk for breakfast; peanut butter sandwiches, chips and Kool-Aid for lunch; and white beans, turnip greens, fried squash, cornbread and sweet tea for dinner.

http://www.startribune.com/nation/19012874.html?location_refer=Nation

 

Plenty of fresh air and excercise on the chain gangs at the E. Limestone Correctional Facility