You simply can not screw "hedonic adjustments".
Not unless you are willing to drive a model T ford today on today's highways.
That is the fallacy of your argument as well as those that claim the dollar has lost 99% of its value or whatever.
Why not use the same basket of goods as was used in the 1940s, 1950s and 1960s? Isn't it really about comparing the prices for the same goods over time? Screw hedonic adjustments, let's just have a basket who contents can be compared across periods while keeping the value of the currency also at a constant.
I have double pane low energy argon gas filled windows.
Did those exist 30 years ago? If so at what price? What about air conditioning in cars, am/fm cd players standard, better brakes, etc etc etc all standard. You want to compare that to a car from 1964 and conclude cars are more expensive? Get real.
The problem is that quality improvement are hugely subjective. How much better are my windows than windows 20 years ago? How much better are cars? What about cell phones? How many people had them 25 years ago? How does one figure in the cost or lifestyle value of that? What about medical advances? How much is a life worth?
As for this....
You may choose to believe that real inflation exists only for those whose spending habits you can scoff at, but that doesn't make it so. Denigrating the lifestyles of those whose inflation experience is different than yours may have some kind of personal reward for you, but it is akin to someone holding their fingers in their ears and loudly singing: "LA LA LA LA" when something they don't want to hear is being said.....it may be effective in keeping one from hearing the unpleasant news, but it does not make the news any less real.
I am not denigrating anyone's lifestyle except if they are attempting to live beyond their means. Then I do not want a taxpayer bailout. If someone lives in a hurricane zone and can not afford insurance that is their problem it should not be mine. If someone wants to live on a flood plain in New Orleans then god bless em. I do not care, as long as I do not have to subsidize their insurance. If someone wants to buy a Hummer then god bless em as long as I do not have to give them a tax break (as Bush did) to buy the damn thing.
Weather pattern changes ARE NOT inflation.
Nor is Peak Oil.
Read those last two sentences over and over and over and over and over until it sinks in.
Inflation is about measuring the difference in prices from one period to another, be those differences the result of monetary policy or some other forces.
I disagree and so does any Austrian and so does dictionary.com.
dictionary.reference.com
A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
IMO people are brainwashed to believe inflation is a measures of prices rather than a measure of money. This is by design as it conviently lets the government and the FED off the hook.
Regardless, you and I and Grace and damn near EVERYONE else sees "CPI inflation" differently. Grace will tell you (I think) that inflation is generally OVERSTATED (if not I am sure she will tell you it is not wildly overstated).
I will tell you that Price inflation is most assuredly understated but by an amount that is impossible to measure because of hedonics, new products, and the impossibility of picking a "representative basket" of goods, services and EQUITIES to measure. Your simple "measure of prices" fails MISERABLY to account for runups in asset prices like equities. My model has no such problem.
This is not "La La Land" other than people's failure to understand cause and effect. The factors affecting prices are very complex and that is in the currency crank's favor. Ask Elroy. The distinction between money and credit is so warped now that even reasonable people can not tell up from down.
Everyone picks on Grace. Not me. She has SOME valid points. Do I disagree with her more often than not? Probably but I bet she can make a reasonable case that the CPI is overstated. I will disagree on the basis of energy, property taxes (which are not accounted for at all), and other things, most notably medical expenses and medical insurance.
So... If you average you and Grace and I, what happens?
I think you will find that I am in the middle. |
