Note that I did not say that deflation did not happen. I said that the Fed aborted the "deflationary correction".
And s an Austrian, I reject the very concept that central planners have any such abilities. The deflation
is the correction.
About what you are saying, there has been monetary deflation for sure, specially in the longer term debt (M3) towards cash or shorter term debt (M2). But if the Fed had not monetized government debt (pushing new money directly into the market) it would had been far more intense.
Sure, it would have been more intense, but it would likely already be over. Which is worse; 18 months of an unabated natural correction, with high unemployment, bank failures and forclosures; or the same exact end results over 10 years?
I'd rather take rip off the band-aid fast.
As for prices, consumer goods prices, the CPI which is usually what is referred as "prices" when talking in macroeconomics, have not gone down. If you look at shadowstats statistics is even worse, and they have been increasing around 5%. Sure, homes have gone down, stocks have gone down, etc... but the articles that people buy everyday, like food, have not gone down, and have keep going up, slower than usually, but still up.
So markets vary, and different industries correct in different ways on different timelines. That does not alter the overall results.
I have checked the statistics in page 10 of that report, and yes its a big decline, but it seems to include all goods and only small business. Its interesting data, but it does not represent the whole thing.
Neither does the CPI, or even GPD for that matter. Human minds require looking a small slices of representative data at a time, which is why we depend upon statistics to begin with.
And I am not denying there are deflationary presures. I believe the deflationary correction is going to start showing again (its already showing) until the Fed starts printing again on what its being called Quantitive Easing 2. Then prices will start rising again and heavily. Note that I am saying that prices will rise, not that the economy will recover, therefore stagflation.
That may yet be, but it still looks like this is running more like 1932 than 1978 to me.