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And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
Then I guess in all fairness we should tie Social Security cost of living increases to the higher, 'real', rate.
Right after we add means testing, raise the retirement age, and completely fund the trust fund.
I like the way you think.Then I guess in all fairness we should tie Social Security cost of living increases to the higher, 'real', rate.
Right after we add means testing, raise the retirement age, and completely fund the trust fund.
Or better yet, just get rid of it altogether for people who haven't yet retired since it's unconstitutional anyway.
And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
The 'average basket' is about half full of food and gasoline, yet they don't bother to count that at all.
What is out there that we can 'substitute' for those 2 products?
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
The 'average basket' is about half full of food and gasoline, yet they don't bother to count that at all.
Huh? Both food and energy costs are counted in the CPI. The CPI-core doesn't include those because it serves a different purpose.
What is out there that we can 'substitute' for those 2 products?
You don't understand the CPI. There's no single line item for "Food" or "energy".
Your intellectual dishonesty is only exceeded by your abject ignorance.
The 'average basket' is about half full of food and gasoline, yet they don't bother to count that at all.
Huh? Both food and energy costs are counted in the CPI. The CPI-core doesn't include those because it serves a different purpose.
What is out there that we can 'substitute' for those 2 products?
You don't understand the CPI. There's no single line item for "Food" or "energy".
Your intellectual dishonesty is only exceeded by your abject ignorance.
What BULLSHIT! Any time you watch the news or read the paper, the only thing they tell you is the 'core' inflation rate.
If by "hiding" you mean "publishing on the front page of their website each month", you might have a point.They've been hiding the 'true' rate of inflation with their doubletalk, knowing that 90% of the people don't follow it close enough to know the difference between the Consumer Price and the Core Price.
Have you ever noticed that they have the same initials? They say CPI making you THINK Consumer Price while they REPORT the Core Price.
It's the same shit they do with the fucking UI numbers...
Huh? Both food and energy costs are counted in the CPI. The CPI-core doesn't include those because it serves a different purpose.
You don't understand the CPI. There's no single line item for "Food" or "energy".
Your intellectual dishonesty is only exceeded by your abject ignorance.
What BULLSHIT! Any time you watch the news or read the paper, the only thing they tell you is the 'core' inflation rate.
I can't be held accountable for where you choose to get your news. The horses mouth reports the broader measure every month.
If by "hiding" you mean "publishing on the front page of their website each month", you might have a point.
Have you ever noticed that they have the same initials? They say CPI making you THINK Consumer Price while they REPORT the Core Price.
No, they don't have the same initials. That's your own ignorance speaking.
They serve two different roles.
It's the same shit they do with the fucking UI numbers...
Who is "they?" and what are UI Numbers?
What BULLSHIT! Any time you watch the news or read the paper, the only thing they tell you is the 'core' inflation rate.
I can't be held accountable for where you choose to get your news. The horses mouth reports the broader measure every month.
If by "hiding" you mean "publishing on the front page of their website each month", you might have a point.
No, they don't have the same initials. That's your own ignorance speaking.
They serve two different roles.
It's the same shit they do with the fucking UI numbers...
Who is "they?" and what are UI Numbers?
Dude, 90% of Americans get their news from the fucking television.
They're the ones getting fed the bullshit so the 'status quo' is maintained. It's not about where I get MY news, it's about what the sheeple are told to think.
Unemployment = UE.'They' are the motherfuckers running the scam. Unemployment.
Then I guess in all fairness we should tie Social Security cost of living increases to the higher, 'real', rate.
Right after we add means testing, raise the retirement age, and completely fund the trust fund.
Or better yet, just get rid of it altogether for people who haven't yet retired since it's unconstitutional anyway.
I like the way you think.Right after we add means testing, raise the retirement age, and completely fund the trust fund.
Or better yet, just get rid of it altogether for people who haven't yet retired since it's unconstitutional anyway.
And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
Is steak the sname thing as hamburger?
No?
Then substitution in that kind of decision is sheer nonsense.
The issue of computer chips is entirely another kind of issue-- one where consumers aren't really substituting, the market is simply changing the product disign.
The CPI sustiution system for computing the CPI is economic bullshit by DESIGN.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
Is steak the sname thing as hamburger?
No?
Then substitution in that kind of decision is sheer nonsense.
The issue of computer chips is entirely another kind of issue-- one where consumers aren't really substituting, the market is simply changing the product disign.
The CPI sustiution system for computing the CPI is economic bullshit by DESIGN.
I don't understand what the problem is. The CPI is supposed to measure a price index for goods people actually buy. If a relative price change occurs which makes steak more expensive, and people stop buying steak and switch to hamburgers, we should be measuring the price of hamburgers now because that's what people are buying.
The CPI isn't an index of the standard of living. It's an index of the price of goods consumers buy.
Is steak the sname thing as hamburger?
No?
Then substitution in that kind of decision is sheer nonsense.
The issue of computer chips is entirely another kind of issue-- one where consumers aren't really substituting, the market is simply changing the product disign.
The CPI sustiution system for computing the CPI is economic bullshit by DESIGN.
I don't understand what the problem is. The CPI is supposed to measure a price index for goods people actually buy. If a relative price change occurs which makes steak more expensive, and people stop buying steak and switch to hamburgers, we should be measuring the price of hamburgers now because that's what people are buying.
The CPI isn't an index of the standard of living. It's an index of the price of goods consumers buy.
It is used to track inflation by the Fed.
I don't understand what the problem is. The CPI is supposed to measure a price index for goods people actually buy. If a relative price change occurs which makes steak more expensive, and people stop buying steak and switch to hamburgers, we should be measuring the price of hamburgers now because that's what people are buying.
The CPI isn't an index of the standard of living. It's an index of the price of goods consumers buy.
It is used to track inflation by the Fed.
Actually they use PCE. But it doesn't matter since that corrects for substitution as well. Monetary policy creates inflation in the general level of prices. Monetary policy basically controls aggregate demand. Changes in relative prices, the kind that'd make consumers substitute steak for hamburgers, is the result of supply shocks. And monetary policy shouldn't be responding to supply shocks with demand management.
It is used to track inflation by the Fed.
Actually they use PCE. But it doesn't matter since that corrects for substitution as well. Monetary policy creates inflation in the general level of prices. Monetary policy basically controls aggregate demand. Changes in relative prices, the kind that'd make consumers substitute steak for hamburgers, is the result of supply shocks. And monetary policy shouldn't be responding to supply shocks with demand management.
But that wouldn't be politically expedient.
And the inflation figures most quoted on the news exempts energy and food.
the Price Deflator for Personal Consumption Expenditures (the "C" in GDP = C+I+G+NX) accounts for substitution:they [the Fed] use PCE... that corrects for substitution as well. Monetary policy creates inflation in the general level of prices... Changes in relative prices, the kind that'd make consumers substitute steak for hamburgers, is the result of supply shocks.
The CPI has average +(1-2)% per year since 1992; via substitution, Consumers blunt 10-20% of Price inflation effects. Fear for Consumer substitution may motivate constant cost-cutting in e.g. fast food.This price index method assumes that the consumer has made allowances for changes in relative prices... they have substituted from goods whose prices are rising to goods whose prices are stable or falling. The PCE rises about one-third percent less than the CPI, a trend that dates back to 1992. This may be due to the failure of CPI to take into account substitution.
You had bad econ profs if they couldn't explain why the headline CPI figure excludes energy.And the inflation figures most quoted on the news exempts energy and food.
Economist initially started taking inflation measurements excluding energy and food costs because they were so volatile. i.e. OPEC spiking the price of gas.
But the idea of not including the cost of energy in inflation is dumb. I asked all of my economics professors about this and they all kind of raised their collective liberal Keynesian shoulders when I pointed out the fact that energy is one of the most important elements of the economy.
Come to think of it. Most of my econ professors sucked. Every time I asked something that was against their dogma they would laugh at me...When the economy crashed in 08' i put almost everything I had in gold because of QE...I asked my professors what they thought, they all thought that I was crazy....lol....I guess i'm glad that I didn't follow their advice.
Its not easy evaluating the economy. Its shrouded in BS, and underlying false premises.
