2 ms·

But no one is “selling” you anything here. CPI is just data with a very public methodology. Some things go up, others go down. The Fed uses it as one input in d

But no one is “selling” you anything here. CPI is just data with a very public methodology. Some things go up, others go down. The Fed uses it as one input in decision making to manage inflation over long time horizons. You can look at what is measured in CPI and how it’s measured. You can have a conversation about whether that’s the most precise way to measure inflation etc. but just waving your hands about your “lived experience” and making allusions to a conspiratorial “they” doesn’t pass for analysis. Show your work. What is the motive here for the “Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal”? How do they do it? What’s in it for them? I’m genuinely curious how you get there from looking at CPI.

henriquez 5y ago
CPI is the equivalent of the FBI investigating their own actions and finding no wrongdoing. You can wrap a turd up in gold foil and have it certified by a panel of experts, but it’s still shit.
dlubarov 5y ago
> What is the motive [...] What’s in it for them? There's a huge monetary incentive, since things like social security payments (the largest item in the federal budget) are inflation indexed. The Boskin Report [1], which argued that inflation was overstated by 1.1%, estimated that their proposed "corrections" would reduce the deficit by $202 billion by 2008. The whole thing was rather suspicious in my opinion. The report was based on some questionable interpretations of inflation, and it seemed like the Senate appointed particular members in order to get the outcome they wanted, as Thomas Palley argued [2]: > The commission is itself a delicious example of such bias: All its members were on record prior to the establishment of the commission as believing the CPI to be overstated. At the same time, the commission took no evidence from such well-known economists as Janet Norwood, a former head of the Bureau of Labor Statistics, and Dean Baker, of the Economic Policy Institute, who believe that the CPI provides a reasonable reading of inflation. In effect, the commission took account of all the evidence of overstatement of inflation by the CPI and downplayed the evidence of potential understatement. [1] https://www.ssa.gov/history/reports/boskinrpt.html https://www.ssa.gov/history/reports/boskinrpt.html [2] https://www.theatlantic.com/magazine/archive/1997/04/how-to-rewrite-economic-history/376830/ https://www.theatlantic.com/magazine/archive/1997/04/how-to-...

henriquez 5y ago

CPI is the equivalent of the FBI investigating their own actions and finding no wrongdoing. You can wrap a turd up in gold foil and have it certified by a panel of experts, but it’s still shit.

dlubarov 5y ago

> What is the motive [...] What’s in it for them? There's a huge monetary incentive, since things like social security payments (the largest item in the federal budget) are inflation indexed. The Boskin Report [1], which argued that inflation was overstated by 1.1%, estimated that their proposed "corrections" would reduce the deficit by $202 billion by 2008. The whole thing was rather suspicious in my opinion. The report was based on some questionable interpretations of inflation, and it seemed like the Senate appointed particular members in order to get the outcome they wanted, as Thomas Palley argued [2]: > The commission is itself a delicious example of such bias: All its members were on record prior to the establishment of the commission as believing the CPI to be overstated. At the same time, the commission took no evidence from such well-known economists as Janet Norwood, a former head of the Bureau of Labor Statistics, and Dean Baker, of the Economic Policy Institute, who believe that the CPI provides a reasonable reading of inflation. In effect, the commission took account of all the evidence of overstatement of inflation by the CPI and downplayed the evidence of potential understatement. [1] https://www.ssa.gov/history/reports/boskinrpt.html https://www.ssa.gov/history/reports/boskinrpt.html [2] https://www.theatlantic.com/magazine/archive/1997/04/how-to-rewrite-economic-history/376830/ https://www.theatlantic.com/magazine/archive/1997/04/how-to-...