Prosperity is just . . . around here somewhere

So I went to a tax-freeze talk last night. More about that later this week when I have time to write it up well.

But, briefly, one thing the speaker (Andrew Reschovsky from the LaFollette school) pointed out is that tying state spending to the Consumer Price Index (CPI) is kind of stupid (my words, not his), since what consumers buy has very little to do with what governments buy. Both J-Dizzle's tax freeze and the Lasee-Wood TABOR use the CPI, a measure of inflation, as a marker.

Today comes word that, for the first time since the previous Bush administration, the CPI has outpaced real wage growth. This should not come as much of a surprise to those of you tracking the meteoric rise of gas prices, milk prices, basic cable subscription fees, and electricity rates. It's even less surprising to those of you paying the jacked-up prices on last year's salary.

We have known for some time job growth has been anemic, and real wage growth has stayed flat or fallen. But it has taken this long for inflation to catch up, at least in part because Alan Greenspan has kept interest rates so low.

Well, now interest rates are rising. While the rates were low, people got their adjustable rate mortgages. That mortgage debt--not to mention credit debt--has kept purchasing going strong. At some point, those ARMs are going to come due, the housing prices are going to collapse (your high Wisconsin property taxes are due, at least in part, to the housing bubble), and then we're all screwed.

Sorry to be a downer, but it's hard to be very happy about this kind of news.