9 ms·

In particular: education, insurance, and housing really is accurately reflected in the CPI, but the true price of non-shit consumer goods are consistently under

by 23iofj 6y ago

In particular: education, insurance, and housing really is accurately reflected in the CPI, but the true price of non-shit consumer goods are consistently under-estimated in the CPI.

adam_arthur 6y ago
Housing is not included in CPI, only "rents". If home prices go up 10% this year, but interest rates drop such that the carrying cost is the same, the effect on CPI is net 0% inflation. Obviously the purchase price matters, because the higher prices are, the more money you need to even get in the door with homeownership.
- 23iofj 6y ago
  > Housing is not included in CPI, only "rents". This reads like an oxymoron to anyone who's not a property owner, which is about half the country -- all of whom are in the bottom 90% referred to in the headline.
  - adam_arthur 6y ago
    Exactly. Inflation in home prices is great for property owners, bad for everybody else. Should renters not have the opportunity to buy a home?
    - chii 6y ago
      > Should renters not have the opportunity to buy a home? there should not be societal subsidies for people wanting to buy their home. If rents are not growing at a rate that's higher than wage growth, then it is stable and thus acceptable. Owning a home is a privilege, not a right. Thus, the CPI calculations correctly only includes rental costs, and not ownership.
      - Rury 6y ago
        >If rents are not growing at a rate that's higher than wage growth, then it is stable and thus acceptable Nonsense. Theoretically if wages and rents grew 5% in step together yoy, but most other goods increased at >100% (say houses), your statement implies things would always remain stable. I'd think not... The real reason CPI is garbage (for measuring total inflation) is because it doesn't track everything, and hence misses the inflation in things that the CPI doesn't track (such as houses). More specifically, it's a measure that only tracks what urban people CAN & typically spend money on. It doesn't track the things which some people have been entirely priced out of and hence don't spend money on (such as home ownership, as well as other assets).
cameldrv 6y ago
Yes. When Apple comes out with a new iPhone, and last year's model is discounted by $100, that is counted as deflation in the CPI. When an appliance costs the same as it did 20 years ago, but lasts 5 years instead of 20 because it's made more cheaply, that's generally not factored in.

by 23iofj 6y ago

In particular: education, insurance, and housing really is accurately reflected in the CPI, but the true price of non-shit consumer goods are consistently under-estimated in the CPI.

adam_arthur 6y ago

Housing is not included in CPI, only "rents". If home prices go up 10% this year, but interest rates drop such that the carrying cost is the same, the effect on CPI is net 0% inflation. Obviously the purchase price matters, because the higher prices are, the more money you need to even get in the door with homeownership.

23iofj 6y ago
> Housing is not included in CPI, only "rents". This reads like an oxymoron to anyone who's not a property owner, which is about half the country -- all of whom are in the bottom 90% referred to in the headline.
- adam_arthur 6y ago
  Exactly. Inflation in home prices is great for property owners, bad for everybody else. Should renters not have the opportunity to buy a home?
  - chii 6y ago
    > Should renters not have the opportunity to buy a home? there should not be societal subsidies for people wanting to buy their home. If rents are not growing at a rate that's higher than wage growth, then it is stable and thus acceptable. Owning a home is a privilege, not a right. Thus, the CPI calculations correctly only includes rental costs, and not ownership.
    - Rury 6y ago
      >If rents are not growing at a rate that's higher than wage growth, then it is stable and thus acceptable Nonsense. Theoretically if wages and rents grew 5% in step together yoy, but most other goods increased at >100% (say houses), your statement implies things would always remain stable. I'd think not... The real reason CPI is garbage (for measuring total inflation) is because it doesn't track everything, and hence misses the inflation in things that the CPI doesn't track (such as houses). More specifically, it's a measure that only tracks what urban people CAN & typically spend money on. It doesn't track the things which some people have been entirely priced out of and hence don't spend money on (such as home ownership, as well as other assets).

cameldrv 6y ago

Yes. When Apple comes out with a new iPhone, and last year's model is discounted by $100, that is counted as deflation in the CPI. When an appliance costs the same as it did 20 years ago, but lasts 5 years instead of 20 because it's made more cheaply, that's generally not factored in.