You're gonna be so proud. Proud? Proud.

From the make-Edward-Tufte-proud department, another stellar graphic in today's Sunday Times, this one visualizing the basket of goods making up the CPI and both the relative size of those goods within the consumption bundle and the year-on-year change in that size:

All of Inflation's Little Parts by Amanda Cox

You always glean points from a good visualization that you don't from the tabular data. For example, consumers spend the same amount (about 1% of total) on cable service as on doctor visits. The portion of consumer spending allotted to "computers" has declined 12% year-on-year. Rising import prices, particularly oil (which, although denominated in dollars, experiences the same exchange rate pressure as other world market goods), and growing food costs account for the bulk of inflationary pressures. I am happy to note if you rent your home, don't own a car, and spend most of your money on clothes and bacon, your purchasing power has actually increased year-over-year.

Note that, while a proxy, the change in spending on a category is not the same as inflation. For example, the share of spending on citrus dropped 9.5% year-over-year. That could be due to deflation, but the spending drop could also be caused by a decrease in demand—perhaps consumers are substituting oranges with apples, which grew 7.5% year-on-year. Alternatively, note that while the cost of most health-related expenses went up, so did the science advancing the field, ushering in new drugs and improved procedures. If you aren't comparing, say, apples to apples year-on-year, you are measuring more than monetary inflation. These are just two of a myriad of problems with computing inflation.

A page earlier, Alan Blinder argues for greater regulation of the financial industry. Unfortunately, Prof Blinder notes:

It will, for example, substantially reduce the profitability of investment houses and, therefore, reduce their scale. But that’s the price you pay for access to a publicly financed safety net.

No doubt increased regulation, particularly in the area of margin requirements curbing excess leverage, will lower short-term profits. But I don't see why the goal of any changes in regulation shouldn't include maintaining or even improving longer term profits. After all, you'd have to take substantial bites out of Goldman's earnings to equal the loss in a single implosion such as Bear's.