3 ms·

> Rising costs of living are pricing people out of the system. Officially, inflation is only 2% a year https://data.bls.gov/timeseries/CUUR0000SA0L1E?output_v

> Rising costs of living are pricing people out of the system. Officially, inflation is only 2% a year https://data.bls.gov/timeseries/CUUR0000SA0L1E?output_view=pct_12mths https://data.bls.gov/timeseries/CUUR0000SA0L1E?output_view=p... I find CPI to be genuinely curious basket. Where are they finding housing, college, and health care that's only going up 2% a year? Certainly not the west coast where 10-20% annual increases are routine.

bufordsharkley 9y ago
Here's an interesting article speculating on reasons why policy-makers have an inherent incentive to deny that inflation is taking place (with special note on how it relates to housing costs): http://www.georgistjournal.org/2012/09/21/denying-inflation-who-why-and-how/ http://www.georgistjournal.org/2012/09/21/denying-inflation-...
vkou 9y ago
If you're living in a hot metro area, your CoL will rise much faster then 2% a year. Your wages will not. However, there are a lot more people living in Nowhereville, Middle America, where rents are not going through the roof. There aren't any jobs there, but that's not reflected in the CoL index.
- LMYahooTFY 9y ago
  This is actually very false... https://www.census.gov/newsroom/press-releases/2015/cb15-33.html https://www.census.gov/newsroom/press-releases/2015/cb15-33....
  - vkou 9y ago
    I said hot metro area. I'm talking about NYC and San Francisco, not Fresno.
Spooky23 9y ago
We're basically re-living 1880-1900. Consolidation and automation is driving the power of rentier class people. CPI is funny about certain things... it weighs rents highly which skews things as there's an effective price floor through the "prevailing rents" that drive housing subsidy.
YZF 9y ago
I live in the Vancouver area where house prices have shot through the roof. However, rent price for me has not gone up over the last 3+ years at all. Not even 2% (or whatever is the amount my landlord is legally allowed to raise). Measuring inflation is apparently quite hard and there are always some conspiracy theories. I think the intention is to try and somewhat filter out real estate bubbles from CPI which does make some sense if you assume a certain mix of home owners, long time renters, new renters. New renters may see a large % gain but they are only a small portion of a normal market. The problem is not really how we measure CPI. The problem is ZIRP that is skewing everything. Hopefully we can start moving away from that.

bufordsharkley 9y ago

Here's an interesting article speculating on reasons why policy-makers have an inherent incentive to deny that inflation is taking place (with special note on how it relates to housing costs): http://www.georgistjournal.org/2012/09/21/denying-inflation-who-why-and-how/ http://www.georgistjournal.org/2012/09/21/denying-inflation-...

vkou 9y ago

If you're living in a hot metro area, your CoL will rise much faster then 2% a year. Your wages will not. However, there are a lot more people living in Nowhereville, Middle America, where rents are not going through the roof. There aren't any jobs there, but that's not reflected in the CoL index.

LMYahooTFY 9y ago
This is actually very false... https://www.census.gov/newsroom/press-releases/2015/cb15-33.html https://www.census.gov/newsroom/press-releases/2015/cb15-33....
- vkou 9y ago
  I said hot metro area. I'm talking about NYC and San Francisco, not Fresno.

Spooky23 9y ago

We're basically re-living 1880-1900. Consolidation and automation is driving the power of rentier class people. CPI is funny about certain things... it weighs rents highly which skews things as there's an effective price floor through the "prevailing rents" that drive housing subsidy.

YZF 9y ago

I live in the Vancouver area where house prices have shot through the roof. However, rent price for me has not gone up over the last 3+ years at all. Not even 2% (or whatever is the amount my landlord is legally allowed to raise). Measuring inflation is apparently quite hard and there are always some conspiracy theories. I think the intention is to try and somewhat filter out real estate bubbles from CPI which does make some sense if you assume a certain mix of home owners, long time renters, new renters. New renters may see a large % gain but they are only a small portion of a normal market. The problem is not really how we measure CPI. The problem is ZIRP that is skewing everything. Hopefully we can start moving away from that.