If you have ever wondered just how detached Washington is, all you had to do was tune into Fed chief’s Janet Yellen’s semiannual trip to the Capitol Hill.
There they were — Yellen and members of Congress yucking it up, utterly blind to the real financial pressures ordinary regular Americans feel each and every day.
In recent years, Yellen has become a poster child for being out of touch with Main Street.
Let’s start with the basics, like her interpretation of inflation — which she bases on the opaque and completely outdated model used for 20 years: the consumer price index.
Look at it this way. In the real world, three of the largest expenses nowadays for average American families are housing, health care and their kids’ college education.
And yet Yellen claimed there was essentially no inflation with this unschooled statement: “Inflation has been below 2 percent for many years.”
Sure, the CPI figures support that claim, but isn’t the Fed supposed to do its own research? A bad ruler is going to give a bad measurement every time.
There are 20.5 million kids in college today, according to the National Center for Educational Statistics. And according to the College Board, from 1985 to 2012, the overall CPI rose 115 percent while the college inflation rate has risen nearly 500 percent.