[Note: Updated on 2.16.2011]

What is biflation?

Biflation occurs when there is inflation in one part of the economy, usually on commodities, while at the same time there is deflation in a different part of the economy, such as domestically-produced items and those bought with credit. Economists don't necessarily agree on the causes of biflation. But in a tight economy, demand for essentials has risen and pushed up prices, while demand for more luxury items has fallen and pushed prices down. Commodities also trade in global markets, where there is more buying appetite, while domestically-produced items like cars have to contend with consumers unwilling to make large purchases.

What's the significance?

Biflation means a rise in prices for everyday purchases like food and energy, but a fall in larger items such as cars and houses. Some fear that we are heading to biflation, and signs point in the direction of general deflation but rising commodity prices. With dismal unemployment numbers, that would mean an even heavier burden on much of the population. Stretched budgets would have to stretch even further to buy the necessities.

Who's talking about it?

Nick Summers at Newsweek explains the term and what signs say we're heading there...dillbeans at The Motley Fool thinks the Bush Tax cuts, which put more money into the hands of the rich, have brought us to biflation...Dian L. Chu on Zero Hedge makes the case that we're not just experiencing deflation, but biflation...Al Lewis criticizes Ben Bernanke for dismissing inflation concerns while the cost of education, health care, and other necessities is soaring.

[Note: updated on 8.6.2010]

What is a boondoggle?

Originally, the word meant a hand-made household or otherwise practical item, such as a key chain.  But during the New Deal, the meaning of the word changed: When a teacher with the Federal Emergency Relief Administration (a predecessor to the WPA) testified that he taught people how to make boondoggles, the media pounced on the word, and the meaning changed to what we know today: a project, often of government, that wastes time and resources.

What’s the significance?

Since the New Deal, boondoggle has been a populist criticism leveled by conservatives at everything from wasteful spending to blatant errors, usually by the local, state or national government.  The online mega-dictionary Wordnik statistical analyses word usage; it found that boondoggle was popular in the 1930s and 1940s, faded out completely, and has only recently made a  comeback.

Who’s Talking About It?

Rush Limbaugh has decided that Chevy's new all-electric vehicle, the Volt, is boondoogle...Ed Lasky at American Thinker thinks the GOP was bribed to support "Dem boondoggle" that prevents teacher layoffs...Phil Levy of the American Enterprise Institute, writing in his Foreign Policy blog, refers to "the GM boondoggle" when raising concerns about the Obama administration's plans for the auto sector....Indiana Tribune Star columnist Arthur Foulkes says government can't create wealth and workers should beware "the 'green jobs' boondoggle"....Pacific Press's Tom Burghardt denounces the administration's cyber security plan as "a corporatist boondoggle"....And, over at Golf Digest, "the myth of the elitist boondoggle has been exposed as exactly that."  Which myth?  The one about golf being too elitist for the President to be associated with it.  (For those keeping score, that means Obama can be honorary chair of the PGA President's Cup in October.  Phew.)

What is the broken windows theory?

The broken windows theory refers to an idea set forth by James Q. Wilson and George L. Kelling in a 1982 Atlantic Monthly article that keeping urban environments orderly and fixing small discretions will prevent further vandalism and escalation into more serious crimes. The theory advises the police force to fix problems when they are minor and claims that further low-level offenses will be avoided and major crime will therefore be prevented.

What's the significance?

The theory has led to many reforms in criminal policy and been implemented in a some cities, including New York City. But critics say that it confuses correlation with causality. Some social scientists have revisited the studies that support the theory and found that there is a low relationship between disorder and serious crime. Some fear that giving police broad discretion in low-level intervention would be harmful in minority communities and people could be arrested simply for being undesirable. It also turns minor offenses into harmful acts and leads some to think that serious crime is always preceded by small offenses. This leads to the idea that by policing the minor acts, a city can prevent the more serious ones. The theory also relies on separating people into "law abiders" and "disorderly people" and delineating "order" and "disorder", but these distinctions may not be easy to make or have an intrinsic reality.

Who's talking about it?

Mike Konczal points out that the theory is behind an increase in the US prison population...Bernard E. Harcourt has written about the theory's false promise and challenges the data behind it...The high number of vacant houses due to the foreclosure crisis has led to a resurgence of the theory for a Milwaukee lawmaker and other officials in other cities...Conservative Daniel Henninger says, "Earmarks, pork, corporate carve-outs and all that are Congress's broken windows."

What is the CARD Act?

The Credit Card Accountability and Responsibility and Disclosure Act of 2009 (or the Credit CARD Act) was passed by Congress and signed into law by President Obama on May 22, 2009.

Its provisions include:

• Protections against unfair interest rate increases, including a ban on retroactive increases done at any time for any reason, protection against hikes in the first year of an account, and the requirement of 45 days notice before any increases are put into place.
• Banning fee traps by giving cardholders at least 21 days to pay their bills, forcing companies to apply excess payments to the highest interest balance first, and requiring that consumers opt in to over-limit fees.
• Putting contracts and statements into plain language that consumers can understand and disclosure of the consequences of their account decisions.
• Increased accountability from card issues in complying with regulations and from regulators enforcing them.

What's the significance?

Over the last 30 years, credit card companies have been very loosely regulated and they developed abusive and predatory practices, which this bill attempts to curb. It also aims to empower consumers to make informed choices about credit products by bringing transparency to contracts and practices. However, it may not have gone far enough, as banks are already finding ways around it. Upfront interest rates are soaring, for example, as companies anticipate lost revenue from no longer being able to jack them up at will.

Who's talking about it?

Bryce Covert notes all the loopholes banks were already finding in the Act by the time the last phase was implemented, including interest rates that are getting as high as 59%...Banks could lose up to $25 billion in revenue a year due to the new regulations...Thirty-seven percent of consumers surveyed by Business Insider reported seeing negative changes in their credit card accounts since it passed...But James B. Kelleher reports that the new rules haven't restricted consumers' access to credit.