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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (87038)	12/16/2000 10:35:01 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 132070

mis, hedonic pricing. eg, as prices rise on a product, its relative "basket" weight is reduced. sound like a joke? it does to me, but it is true. another inflation reducing technique is to disregard anything that is "volatile" (read, goes up). still a third inflation reducing technique is to all but ignore asset inflation. The value of my home is up nearly 50% in 2.5 years. it was up big the year before i bought it. of course, we all know a 24 pack of eggs impacts our lives more than a 50% increase in housing... NOT! i'm sure there are some i've missed.

To: mishedlo who wrote (87038)	12/17/2000 10:25:00 AM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Mis, here is a nice overview of the hedonic pricing hoax and how it overstates GDP & productivity growth . Scroll further down and you will read about how inflation is understated. One of the methods is the use of geometric weighting which presumes consumers will substitute lower priced alternatives as prices rise. It is difficult to substitute for energy though I suppose sweaters and bicycles help -g- Mike mwhodges.home.att.net

To: mishedlo who wrote (87038)	12/17/2000 11:24:07 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Mike, The govt. has been tinkering with the CPI, PPI, and GDP deflator for decades now. Every time something looks to be inflationary, they either take it out of the index or underweight it. For example, now the key is the "core rate," without food and energy. Guess what is increasing the most in price: food and energy. Clinton certainly didn't invent this sort of crap, but his administration has done heroic work in making a sow's ear look like a silk purse. They have jiggered inflation readings, credit stats, trade stats, GDP stats, etc. until they are totally incomparable with other nations in the world and even with the US stats of 10 years ago. The worst crapola has been "hedonistic values" added to economic stats. This is the great deal that allowed computer sales to be counted at 10 to 12 times their actual value in GDP because newer computers were more powerful and cheaper than older computers. If you can count a $700 sale as a $4500 sale for GDP purposes, and computer sales in numbers are growing rapidly, it greatly overstates GDP. Again, no other nation in the world uses this phony accounting, which is why they can't keep up with our "growth" rates. It is very difficult for reality to keep up with fantasies. The GDP is the most obviously distorted economic stat, but the Clinton/Greenspan scamsters have worked their magic to lesser or greater extent on nearly every stat published. Guess how many make things look worse than they looked before the change in method? NUN!