Skip to comments.Why Reported Inflation Seems Different Than Reality
Posted on 12/23/2012 10:30:36 AM PST by arthurus
But the manipulation of the data did not stop there. Aside from the weighting changes the BLS instituted a system of hedonic adjustments. Hedonics adjusts the prices of goods for the increased pleasure the consumer derives from them.
That new washing machine you bought did not cost you 20% more than it would have cost you last year, because you got an offsetting 20% increase in the pleasure you derive from pushing its new electronic control buttons instead of turning that old noisy dial, according to the BLS.
When gasoline rises 10 cents per gallon because of a federally mandated gasoline additive, the increased gasoline cost does not contribute to inflation. Instead, the 10 cents is eliminated from the CPI because of the offsetting hedonic thrills the consumer gets from breathing cleaner air. The same principle applies to federally mandated safety features in automobiles. I have not attempted to quantify the effects of questionable quality adjustments to the CPI, but they are substantial.
(Excerpt) Read more at zerohedge.com ...
Is this satire? I can’t tell anymore.
When the GDP is adjusted for actual inflation, it is negative.
The unions have already begun the push for higher wages.
They will get them and then the inflation will be to big to ignore. The wage rise in the face of unemployment will spread to the whole economy
The same reason that reported unemployment seems different than reality?
Oh no. This is the Nobel Prize for Nothing Emperor for Life.
In the same way, our masters lie to us and tell us there "is no inflation!" And our obese, entitlement check collecting immoral masses nod their low information voting noggins, and surf for porn.
what kind of hedonic improvement can be done for Big Ears? i am so overjoyed at the idea of having to put up with 4 more years of lord haw haw.
This is an excellent article, but it can be boiled down, a lot, to: Your government lies to you - constantly.
They’ve been lying out their @sses, hiding, covering up, finagling, adjusting, manipulating, massaging, and doing whatever it takes to keep the lid on the country/economy until the election was over. Well, the election is over and all the mess they repressed is about to blow sky high. Personally, I’d rather have a calm, competent, Conservative (not talking Mitt here) who understands the economy and that big government has to be majorly downsized and spending must stop; however, we are stuck with Emperor Barry “I have no clothes” & Michelle “Antoinette Let Them Eat Vegetables” Obama at the helm and when all hell breaks loose and the country comes down around their ears, it couldn’t happen to a more deserving ‘couple’ of anti-American, anti-Christian, baby killing, pervert-loving,Constitution trampling, lawless Communists/Marxist/Muslims or whatever the heck they are.
Hopefully, there will be an American Phoenix to rise out of the ashes and the country will come back in some form other than a third world dictatorship, but ... that remains to be seen.
The Ministry of Truth is alive and well in Washedup, DC
Taking America out of the heart of Americans is a task too difficult even for Big Ears.
Got a new washing machine a few months ago - lots of gee whiz stuff - but truth be told the ‘pleasure’ of pushing new buttons faded quickly...
This is just a fancy of saying, "the need to fool the voter with smoke and mirrors"
My trips to the grocery store show a lot higher inflation than 1.7%. I think the gub’mint changed the rules on how they report inflation just like they did for unemployment.
Technological advances are also poorly accounted for. I can buy a more computer power now for a few hundred dollars now than I could have bought for a billion dollars a few decades ago. Intel and others have managed to print silicon faster than the government prints money, a remarkable fact in itself.
A new car costs X% more than it did ten years ago, and that price increase can be substantial. The reality, though, is that the new car you buy today is not the same as the new car you bought ten years ago. It's a much better car, which means a one-to-one comparison would not be an accurate measure of inflation.
The same holds true for almost any product or service that involves technology that has advanced considerably over time. Medical care is another good example. Your medical insurance plan costs a lot more than it did 20 years ago, but it also covers many medical treatments that didn't even exist 20 years ago.
Obama’s Ministry of Truth. Reality is what they tell you it is.
Now shut up and pay your taxes, you degenerate capitalist pig.
Right, and tuition is up because the quality of education has improved so dramatically. Same with milk, eggs, bacon... they now must come with magic marshmallow yellow moon, red hearts and green clovers.
Same with milk, eggs, bacon ..
Maybe you missed this part of my post:
The same holds true for almost any product or service that involves technology that has advanced considerably over time.
The government learned the lessons of the Carter years well. We will never again see inflation, unemployment, and other numbers that accurately tell us the state of the economy.
The labor stats are outright lies. The inflation numbers are outright lies. Money supply is incleasng at an exponential rate. Prices on most everything have doubled from 2000. yet, we have almost zero inflation.
And gold has also exploded in price from 2000 because there is no inflation./
That’s why the Baraqqi Coalition has been so successful.
Combine hard left ideology, the tactics of the Chicago political mob, and the full fledged support of the MSM and you have a formidable force.
Up is down, black is white, and there’s no inflation.
Yes as the old Hunkeys used to say in Cleveland:
Much better if you like "traction control" that brakes wheels randomly until it breaks. Or airbags that may injure seat belt wearers but otherwise do nothing except cost 1000's to replace after a minor accident. The 1000 miles of extra wiring that adds unreliability. Or the air pressure sensors in a tire (how hard is it to look at a tire?) which break and then cost $100+ a piece. Oh yeah, I should also point out almost all of this crap is required by federal law. Mini spare tire, much better, yeah right. Now cars come with a much better can of fix-a-flat and no spare at all. I won't even go into the much better pollution control so we can breath from the tailpipe.
Yes only on FR do we talk about the "Big Education" cycle
1) Govt makes unlimited loans to students
2) Schools raise prices to soak up available funds
3) Schools pay profs and administrators excessive salaries
4) Profs and admins donate heavily to Democrats
I have to say that's a pretty substantial snack for one afternoon.
If the government didn't increase the number of dollars in circulation, inflation wouldn't exist.
If the government didn't increase the number of dollars in circulation, inflation wouldn't exist.
The EBT crowd doesn't know, and doesn't care. Why should they?
Bottom line is this, while their may have been some improvements on things over the years the main reason prices are so high is because the dollar is worth a lot less due to inflation, and the constant wage increase with corresponding price increases to offset them haven't helped either.
That is what they have been up to for the last fifty years.
The transformation is complete - as the French say: "Ze joke, she is over."
First, despite the name, hedonic price indexes attempt to correct price changes for improved quality, not for pleasure. It's hard to do, and I've discussed this with folks from the government who try to do it. However, it's necessary. If prices weren't adjusted for quality changes, the resulting price index would be completely meaningless.
Second, the current CPI is a flat-out lie, which has nothing to do with hedonic indexing. They've eliminated the things people buy most, such as food and gasoline, on the grounds that these prices are "volatile," and by eliminating them they're getting at so-called "core inflation." This is simply an excuse for fudging the data.
Do tell. What milk , egg and bacon technology has advanced over the past four years to justify its increase? I thought tech was supposed to create greater efficiencies. Or did you go to some business school where they teach you to increase efficiency in order to increase costs?
It's because it is different from reality.
That formula is now being applied to our food market.
1) Govt gives EBT handouts to increasing portion of population
2) Grocers raise prices to soak up available funds
3) Government pays Food Stamp administrators excessive salaries
4) Food stamp administrators and recipients donate to and vote for Democrats.
We have passed the point of no return
We still fill two carts for a little over $250, at Winco Stores here in the PNW. Of course, the price isn’t based on weight or volume, but basic foods, store brands and avoiding processed and convenience foods helps keep the damage down.
If it were just candy that increased 26%, I could live with it but my health ins. premiums are sky rocketing and everything else one needs to survive, including all groceries and other absolute necessities, fuel, utilities etc. My water bill alone increased by 15% in 2012.
I'm pretty much on a "fixed income", I know we all are, in reality. My income is fixed at a pretty nice number but won't stay "nice" with rampant inflation year after year and I have the distinct impression that "we ain't seen nothin' yet". Bronco has 4 more years to really "f" up our economy.
It isn't a Mayan calender that will crash civilization, it's a-hole liberals and their moronic policies, both social and economic.
They systematically eliminate the things that rise in price sayint that they are “seasonal” or it is an unusual phenomenon or such. but when something like oil rises rapidly, if there is not inflation then other things must fall because there is not the money to pay the ole prices for the other things when oil is taking up more of the money. That doesn’t happen. of course, because inflation is actually pretty high and getting steadily higher. The official assumption is born of the official static analysis which posits that people do not alter their buying habits or their tax paying/avoiding habits because of decreasing assets. It is absurd on the face of it but it is Official Economics.