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Look, if it's the BLS with their 70 year history vs yummyfajita's basket of goods he'll throw together to try and prove the point, I'll stick with the BLS. Not

by jbooth 16y ago

Look, if it's the BLS with their 70 year history vs yummyfajita's basket of goods he'll throw together to try and prove the point, I'll stick with the BLS. Nothing against Mr. fajitas, he's a smart guy. But I could throw together an index that was heavy on healthcare and gasoline costs, maybe factor in average debt level and show the opposite.

yummyfajitas 16y ago
I didn't throw together a basket of goods, because I think it's true for virtually any constant basket of goods. Feel free to construct your index which is heavy on healthcare and gasoline - I think you'll fail. Gasoline won't help you much, wages have kept up with gas prices [1]. I don't see much reason to believe a basket of 1980's health care goods would help you either. All the drugs would be out of patent (and vastly cheaper), among other things. Feel free to prove me wrong. The particular basket you pick just doesn't matter, because I don't think there is a single good we can afford less of today than we could in 1980. We drive more cars, live in bigger houses, we wat more food, consume more medicine, and we have more appliances. Feel free to cherrypick a basket and prove me wrong. Look, CPI is a fine measure for what it is aimed at. But it is not designed to calculate real wages in the manner you seem to want it to. No inflation measure with a variable basket of goods could possibly do that. If you think I'm wrong, please post a basket of goods which has inflated. Or feel free to go back to appealing to authorities who are misusing measures created by other authorities for a different purpose. [1] http://www.inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Oil/Gas... http://en.wikipedia.org/wiki/Personal_income_in_the_United_States http://en.wikipedia.org/wiki/Personal_income_in_the_United_S... [2] People do consume less of some things, e.g. land line telephone service and television. But that's only because they have become rich enough to afford more attractive alternatives, e.g. cell phones and video games.
lotharbot 16y ago
The question at hand is "how do we measure whether consumers have less purchasing power than before?" It doesn't matter how long the BLS or yummyfajitas have been taking measurements. The only thing that matters is whether the measurement is accurately capturing what we want it to capture, and whether it shows that real ability to purchase stuff has gone up or down. The BLS measurement doesn't accurately measure purchasing power; it's misleading to act as though it does. A measure that takes the same items in 1980 and 2010 and compares wages to total price would be far better, and I contend that you would have to work very hard to create such a measure that shows what you claim. My challenge to you: come up with the measure based on your actual spending habits. Compare your wage to that of someone in a comparable socioeconomic position 30 years ago, and calculate how much it would've cost to maintain an equivalent lifestyle 30 years ago. Unless you have very, very unusual spending habits, you'll find that your purchasing power is much higher now than someone in the same relative position in the 1980s.

by jbooth 16y ago

yummyfajitas 16y ago

I didn't throw together a basket of goods, because I think it's true for virtually any constant basket of goods. Feel free to construct your index which is heavy on healthcare and gasoline - I think you'll fail. Gasoline won't help you much, wages have kept up with gas prices [1]. I don't see much reason to believe a basket of 1980's health care goods would help you either. All the drugs would be out of patent (and vastly cheaper), among other things. Feel free to prove me wrong. The particular basket you pick just doesn't matter, because I don't think there is a single good we can afford less of today than we could in 1980. We drive more cars, live in bigger houses, we wat more food, consume more medicine, and we have more appliances. Feel free to cherrypick a basket and prove me wrong. Look, CPI is a fine measure for what it is aimed at. But it is not designed to calculate real wages in the manner you seem to want it to. No inflation measure with a variable basket of goods could possibly do that. If you think I'm wrong, please post a basket of goods which has inflated. Or feel free to go back to appealing to authorities who are misusing measures created by other authorities for a different purpose. [1] http://www.inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Oil/Gas... http://en.wikipedia.org/wiki/Personal_income_in_the_United_States http://en.wikipedia.org/wiki/Personal_income_in_the_United_S... [2] People do consume less of some things, e.g. land line telephone service and television. But that's only because they have become rich enough to afford more attractive alternatives, e.g. cell phones and video games.

lotharbot 16y ago

The question at hand is "how do we measure whether consumers have less purchasing power than before?" It doesn't matter how long the BLS or yummyfajitas have been taking measurements. The only thing that matters is whether the measurement is accurately capturing what we want it to capture, and whether it shows that real ability to purchase stuff has gone up or down. The BLS measurement doesn't accurately measure purchasing power; it's misleading to act as though it does. A measure that takes the same items in 1980 and 2010 and compares wages to total price would be far better, and I contend that you would have to work very hard to create such a measure that shows what you claim. My challenge to you: come up with the measure based on your actual spending habits. Compare your wage to that of someone in a comparable socioeconomic position 30 years ago, and calculate how much it would've cost to maintain an equivalent lifestyle 30 years ago. Unless you have very, very unusual spending habits, you'll find that your purchasing power is much higher now than someone in the same relative position in the 1980s.