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Source link: http://archive.mises.org/13614/auntie-beeb-looks-at-the-bright-side/

Auntie Beeb Looks at the Bright Side

August 17, 2010 by

Two different headline spins on the same news datum (3.1 British CPI inflation in July):

The Telegraph

“Record jump in food prices keeps inflation high. A record increase food prices has kept inflation above 3 per cent and sparked warnings that the cost of living will keep rising.”

The BBC

“UK inflation rate slows again in July. UK inflation eased to 3.1% in July from 3.2% in June, the third month in a row that prices have risen more slowly.”

{ 14 comments }

Current August 17, 2010 at 9:02 pm
J. Grayson Lilburne August 17, 2010 at 9:12 pm

Eh? That didn’t really have to do with spins at all (or even mention either the Telegraph or the BBC).

Current August 18, 2010 at 8:04 am

Well no. But, the statements from the Bank of England have been as confused as those from news sources. That’s my only point, and I thought it was quite funny.

SoundMoney August 18, 2010 at 5:21 am

Dear all,

In Belgium there is a new website regarding economic news.
We will use some of Mises articles, sources are mentioned.

Visit our website:

http://www.soundmoney.be

Best regards

Fephisto August 18, 2010 at 1:47 pm

Best wishes.

Bogart August 17, 2010 at 9:15 pm

The true CPI is above 4% in the USA.

Seattle August 17, 2010 at 10:21 pm

I wonder if this isn’t a sign all the praise BBC gets from the “cyberlibertarian” crowd for being “independent journalism” is bull?

JC Hewitt August 17, 2010 at 10:48 pm

Cyberlibertarian means “whatever you can say on Slashdot without being flamed.”

Seattle August 18, 2010 at 1:31 am

Don’t even get me started on that place. Seriously. While the BBC worship there is excessive it’s not the only place it’s hailed as a Beacon Of Hope for the Future Of Free Societies.

J. Murray August 18, 2010 at 6:29 am

How anyone can praise a news organization that gets 100% of its funding from a govenrment as independent is hilarious.

Ohhh Henry August 17, 2010 at 11:56 pm

For anyone who has missed it in previous articles about inflation at mises.org, I highly recommend Shadow Stats which gives the scoop on official inflation figures. Basically they’re bunk, and to illustrate I will give a real-world example.

I was listening to WDW Today, a podcast for people planning visits to Disney World in Florida. A recent episode bemoaned the large ticket price increases that were just announced. The host complained that these increases, effectively around 10 percent, are far beyond the price increases that are “officially” happening in the USA. He argued that, “We’re on the cusp of deflation”, and “Disney’s cost of business is not going up,” apparently based on government CPI data.

While it isn’t completely straightforward (Disney is also angling to make money from hotels, restaurants and gift shops in Orlando), I think it’s pretty reasonable to assume that (a) Disney tries to make each business center pay for itself and not subsidize the other business centers (although in a couple of well-defined exceptions they offer some theme park freebies and free meals to hotel guests), (b) Disney loses some business every time it raises prices (the law of supply and demand not having been repealed), and (c) they consume a wide variety of goods and services from labor to fuel to finished goods in order to run their theme parks. So I would guess that around 10 percent is what is happening in the real world.

The podcaster also mentioned that Americans’ take-home pay is going “nowhere” but this doesn’t undercut Disney’s case for raising prices – if it costs them a certain amount to entertain each guest (after fixed costs are paid) then they must charge enough to cover this cost regardless of how many are coming.

Disney is cutting back in other ways that may be considered subtle – the nighttime spectacle “Fantasmic” which employs a handful of technicians and dozens of costumed actors is being cut back and a new show “World of Color” is being introduced which has a handful of technicians and zero actors (as I understand it). It’s the same kind of show – fountains and pyrotechnics – but instead of live actors they’re showing “reruns” in the form of old Disney movies projected on the fountains. That’s a good analogy – the world economy is on hiatus and will be showing reruns for the foreseeable future (until the projectors are worn out).

J. Murray August 18, 2010 at 6:33 am

It’s purely because of the fixed price aspect, as you noticed. Lower sales = larger portion of the fixed costs that must be absorbed by each ticket. If Disney expects a 10% drop in ticket sales that means the ticket price must increase by 11% to properly absorb the overhead.

Current August 18, 2010 at 2:54 pm

I’m going to say something else Grayson will probably consider off-topic :)

The BBC have a strong left wing bias when dealing with UK news. They aren’t necessarily friendly to government, they have strongly criticised spending “cuts” recently though there haven’t really being any. What marks their behaviour is strong self-interest in their own preservation as a state-owned company, and moderate interest in pushing left-wing policies.

BBC news is rather like the Agatha Christie book “The ABC Murders”. In that book a serial killer murders people according to the letter that their name begins with. Starting with Alice Ascher of Andover then Betty Barnard of Bexhill-on-Sea and then Sir Carmichael Clarke of Churston. The killer sends Hercule Poirot a letter saying when and where each murder will take place. The police suspect a psychopath. Poirot gets to the bottom of the case, the murderer was the brother of Sir Carmichael Clarke. There was not psychopath, he killed the others just to make it look like the work of a psychopath.

Towards the end Poirot says something like “you can hide a book in a library, in the same way you can hide one murder in a set of murders”. By hiding Carmichael Clarkes murder in with others the murderer distracted attention away from his self-interested reason for killing him, which was that he would inherit his money.

The BBC works in a similar way. It supplies international news coverage to those who live outside the UK through a well designed website. It doesn’t really need to do that. It does it because it provides a convenient way to cover up it’s bias. The BBC only has a self-interested reason to supply biased news to one countries home affairs. By supplying news in a much broader way it can cover up it’s self-interested behaviour. It can go further with it’s bias in UK news and make it look more like a small anomaly.

Al Jazzera do something similar.

(8?» August 18, 2010 at 4:53 pm

Always look on the bright side of life!

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