May 2, 2011
During a speech in Queens, New York, William Dudley, the head of the New York Federal Reserve Bank and a former Goldman Sachs partner, was explaining why inflation is – supposedly – low, when the audience reminded him of food and gas prices.
Dudley dismissed the question. “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he said, “you have to look at the prices of all things.”
Stupid answer? Yes, but Dudley did exactly what the government has been doing for decades – ignore the prices of certain necessities in cost-of-living reports – in order to hide inflation and thus lower wages and Social Security pensions tied to COLA adjustments.
Except that, this time, there were real people in the room to challenge such obvious lies. Someone in the audience shot back: “I can’t eat an iPad.”