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Core Inflation is needed so that they can apply the right monetary policy. If you want your 'personal' inflation, they have data for that too. Fed releases all

Core Inflation is needed so that they can apply the right monetary policy. If you want your 'personal' inflation, they have data for that too. Fed releases all kinds of data (unemployment and monetary) and is pretty transparent. It is disingenuous of you (and contributing to the erosion of institutional trust of Federal institution) by falsely accusing them. Federal agencies aren't perfect, but at least educated people in HN should take the responsibility of giving constructive criticism based on facts rather than being brainwashed by random YouTuber/Blogger who is generally clueless about economics

d4mi3n 5y ago
Still waking up and it's possible I misread GP, but their comments didn't seem disingenuous on my reading. It's healthy to be skeptical of something that varies that much from one's personal experience. Your reply about data available for personal inflation was exactly the kind of information they needed to verify if the underlying data matches their personal experience. I understand the sensitivity to folks spouting "fake news", but let's not discourage critical thinking in a time where there is precious little to go around.
- RC_ITR 5y ago
  It's NOT healthy to assume you're the 'average' when you are not. Almost no one on HN is reflective of the 'average' American and that lack of understanding is part of the reason the poor suffer so much in policy decisioning.
  - d4mi3n 5y ago
    I don't know enough to comment on "healthiness" of assumptions about ones' self and where they fit into analysis like in the OP's link. My commentary is purely on how we communicate with each other in a time where divisiveness, misinformation, and polarization are common and pervasive. It's hard, but if we want to have productive discussions we need to treat each other with empathy and talk to the best possible interpretation of each other's arguments. This assumes people are coming to a dialog in good faith, but everything needs to start with a little trust somewhere. Trolls are also not too hard to spot.
    - RC_ITR 5y ago
      Questioning the BLS data without being able to explain how the data is collected and analyzed is not a way to fight misinformation, it's a way to encourage it. If OP had made some more detailed arguments, like 'the methods for imputing homeowners rent seem biased' or 'it seems disingenuous to keep a static weighting during COVID, despite the major observed shift away from services and to goods' then I would love to engage on that. But randomly saying 'this EXTREMELY transparent dataset seems fishy' is just encouraging people to 'do their own research' on things they have no expertise in.
    - mcguire 5y ago
      For example... The median salary for software developers in 2019 in the US was $107,000, with 50% between $82,000 and $136,000. The mean salary in California was $134,000 and the mean in San Francisco was $145,000. (https://money.usnews.com/careers/best-jobs/software-developer/salary https://money.usnews.com/careers/best-jobs/software-develope...) The median household income in the US in 2019 was $69,560 with a 90% confidence interval of <$1000. The "median earnings of all workers aged 15 and over with earnings" in 2019 was $42,065. (FWIW, the median household income for black people in 2020 was $46,000, and for Asian people was $95,000.) The median household income of those with no college education was $47,000, some college was $64,000, and at least a bachelors degree was $107,000. (https://www.census.gov/library/publications/2021/demo/p60-273.html https://www.census.gov/library/publications/2021/demo/p60-27...) (The median household income in California in 2019 was $78,000.) The median salary for software developers individually in 2019 therefore puts them in the highest 40% of households. (In 2019, 1/5th of households made less than $28,000, 2/5 made less than $54,000, 3/5 made less than $86,000, and 4/5 made less than $143,000. 95% made less than $270,000.) For many of the people frequenting HN, this is your mileage in the act of varying.
    - deeviant 5y ago
      If you want productive discussions that you need to enter them in a good faith. Building an argument based on personal anecdotes and applying it to national policy not good faith. Science literally exists to limit subjective bias and to separate actual trends in reality from notions in your head, subjective experience basically worthless for understanding large-scale trends.
orhmeh09 5y ago
None of us posting here has any responsibility to upholding the trust of federal institutions, which have already been eroded far more than one could do on HN by both parties to hold power.
bko 5y ago
> It is disingenuous of you (and contributing to the erosion of institutional trust of Federal institution) by falsely accusing them. There are trillions of dollars tied to these inflation numbers. Many social services are tied to these values. So if an agency could get reported inflation down just a few basis points based on their subjective decisions on what to include and what to substitute, that could save the government billions. That's not saying that they are necessarily doing that, but its wise to be suspicious when there are such large stakes
- cheriot 5y ago
  That suspicion should motivate people to educate themselves before pushing conspiracies. Public debate needs a core set of facts to reason about the world so politicizing BLS numbers is... really bad.
  - bko 5y ago
    That suspicion should motivate people to think about the incentives they're setting for government agencies and try to create clear objective measures that cannot be gamed. > Public debate needs a core set of facts to reason about the world so politicizing BLS numbers is... really bad When it becomes tied to trillions and the agencies are selected by politicians then its by definition political.
    - cheriot 5y ago
      > create clear objective measures that cannot be gamed There is no perfect world where nothing can be gamed. We have a respected institution in the BLS and setting an impossible bar only promotes misinformation by discrediting what's credible. > the agencies are selected by politicians This is why there are specific roles for political appointees and others for career civil servants. In this specific case, we're talking about the usual noise of someone not understanding the point of core inflation, not knowing that there are other measures of inflation, and jumping to a conclusion that the numbers must be bogus. Regardless of what you think about inflation numbers, the reasoning was bad.
heurisko 5y ago
> Core Inflation is needed so that they can apply the right monetary policy. If you want your 'personal' inflation, they have data for that too. Why does applying the right monetary policy depend on excluding inflation in food and energy? Edit: answered by dragontamer
- deltree7 5y ago
  There are two kinds of inflation 1) Increase in prices because of increase in money supply 2) Increase in prices because of supply shocks (weather, strikes, supply chain, disruption) or unusual spiky demand. Core CPI is an attempt to measure (1) to ensure the money supply, which the fed controls is at balance (with their other mandate of full employment). It's a hard problem because there are lot of nuances and still we want to measure the same thing for a fair MoM or YoY comparison.
sdsaga12 5y ago
"In 1996, five economists, known as the Boskin Commission, were tasked with saving the government $1 trillion. They observed that if the CPI were lowered by 1.1 percent, then a $1 trillion could indeed be saved over the coming decade. So what did they do? They proposed a way to alter the formula that would lower the CPI by exactly that amount! This raises a question: Is economics being used as science or as after-the-fact justification, much like economic statistics were manipulated in the Soviet Union? More importantly, is anyone paying attention? Are we willing to give government agents a free hand to keep changing this all-important formula whenever it suits their political needs, simply because they think we won’t get the math?" This was written by Edward Frenkel, a math professor at UC Berkeley who was born in the USSR in 1968 and so, we can assume, had some familiarity with statistical games played by regimes trying to hold onto power. I invite you consider that you might extend too much faith toward federal institutions that have presided over a ceaseless rise in inequality and erosion of rights in recent decades. https://slate.com/technology/2013/02/should-algebra-be-in-curriculum-why-math-protects-us-from-the-unscrupulous.html https://slate.com/technology/2013/02/should-algebra-be-in-cu...
- serverholic 5y ago
  This is why cryptocurrency was invented. Satoshi even signed a statement about government bailouts in the first bitcoin transaction. The truth is that the game is rigged. Like entropy, government power always increases over a long enough timeframe. Anytime the spotlight is shined on government they manipulate the game or blame corporations. Then they introduce regulation to "protect" citizens but these regulations add up to just keeping big business entrenched.
  - stjohnswarts 5y ago
    Satoshi doesn't get any credit for stating what people have been stating literally for decades before "he" came along. Let's not give him credit for anything other than the bitcoin algorithm.
    - serverholic 5y ago
SilasX 5y ago
Really? They don't want to track the inflation that results from the new money just being buried in stocks and real estate for safekeeping? Isn't that an indicator they're printing too much?
stjohnswarts 5y ago
All I know is my favorite Taco Bell meal is up 20% year-over-year

d4mi3n 5y ago

Still waking up and it's possible I misread GP, but their comments didn't seem disingenuous on my reading. It's healthy to be skeptical of something that varies that much from one's personal experience. Your reply about data available for personal inflation was exactly the kind of information they needed to verify if the underlying data matches their personal experience. I understand the sensitivity to folks spouting "fake news", but let's not discourage critical thinking in a time where there is precious little to go around.

RC_ITR 5y ago
It's NOT healthy to assume you're the 'average' when you are not. Almost no one on HN is reflective of the 'average' American and that lack of understanding is part of the reason the poor suffer so much in policy decisioning.
- d4mi3n 5y ago
  I don't know enough to comment on "healthiness" of assumptions about ones' self and where they fit into analysis like in the OP's link. My commentary is purely on how we communicate with each other in a time where divisiveness, misinformation, and polarization are common and pervasive. It's hard, but if we want to have productive discussions we need to treat each other with empathy and talk to the best possible interpretation of each other's arguments. This assumes people are coming to a dialog in good faith, but everything needs to start with a little trust somewhere. Trolls are also not too hard to spot.
  - RC_ITR 5y ago
    Questioning the BLS data without being able to explain how the data is collected and analyzed is not a way to fight misinformation, it's a way to encourage it. If OP had made some more detailed arguments, like 'the methods for imputing homeowners rent seem biased' or 'it seems disingenuous to keep a static weighting during COVID, despite the major observed shift away from services and to goods' then I would love to engage on that. But randomly saying 'this EXTREMELY transparent dataset seems fishy' is just encouraging people to 'do their own research' on things they have no expertise in.
  - mcguire 5y ago
    For example... The median salary for software developers in 2019 in the US was $107,000, with 50% between $82,000 and $136,000. The mean salary in California was $134,000 and the mean in San Francisco was $145,000. (https://money.usnews.com/careers/best-jobs/software-developer/salary https://money.usnews.com/careers/best-jobs/software-develope...) The median household income in the US in 2019 was $69,560 with a 90% confidence interval of <$1000. The "median earnings of all workers aged 15 and over with earnings" in 2019 was $42,065. (FWIW, the median household income for black people in 2020 was $46,000, and for Asian people was $95,000.) The median household income of those with no college education was $47,000, some college was $64,000, and at least a bachelors degree was $107,000. (https://www.census.gov/library/publications/2021/demo/p60-273.html https://www.census.gov/library/publications/2021/demo/p60-27...) (The median household income in California in 2019 was $78,000.) The median salary for software developers individually in 2019 therefore puts them in the highest 40% of households. (In 2019, 1/5th of households made less than $28,000, 2/5 made less than $54,000, 3/5 made less than $86,000, and 4/5 made less than $143,000. 95% made less than $270,000.) For many of the people frequenting HN, this is your mileage in the act of varying.
  - deeviant 5y ago
    If you want productive discussions that you need to enter them in a good faith. Building an argument based on personal anecdotes and applying it to national policy not good faith. Science literally exists to limit subjective bias and to separate actual trends in reality from notions in your head, subjective experience basically worthless for understanding large-scale trends.

orhmeh09 5y ago

None of us posting here has any responsibility to upholding the trust of federal institutions, which have already been eroded far more than one could do on HN by both parties to hold power.

bko 5y ago

> It is disingenuous of you (and contributing to the erosion of institutional trust of Federal institution) by falsely accusing them. There are trillions of dollars tied to these inflation numbers. Many social services are tied to these values. So if an agency could get reported inflation down just a few basis points based on their subjective decisions on what to include and what to substitute, that could save the government billions. That's not saying that they are necessarily doing that, but its wise to be suspicious when there are such large stakes

cheriot 5y ago
That suspicion should motivate people to educate themselves before pushing conspiracies. Public debate needs a core set of facts to reason about the world so politicizing BLS numbers is... really bad.
- bko 5y ago
  That suspicion should motivate people to think about the incentives they're setting for government agencies and try to create clear objective measures that cannot be gamed. > Public debate needs a core set of facts to reason about the world so politicizing BLS numbers is... really bad When it becomes tied to trillions and the agencies are selected by politicians then its by definition political.
  - cheriot 5y ago
    > create clear objective measures that cannot be gamed There is no perfect world where nothing can be gamed. We have a respected institution in the BLS and setting an impossible bar only promotes misinformation by discrediting what's credible. > the agencies are selected by politicians This is why there are specific roles for political appointees and others for career civil servants. In this specific case, we're talking about the usual noise of someone not understanding the point of core inflation, not knowing that there are other measures of inflation, and jumping to a conclusion that the numbers must be bogus. Regardless of what you think about inflation numbers, the reasoning was bad.

heurisko 5y ago

> Core Inflation is needed so that they can apply the right monetary policy. If you want your 'personal' inflation, they have data for that too. Why does applying the right monetary policy depend on excluding inflation in food and energy? Edit: answered by dragontamer

deltree7 5y ago
There are two kinds of inflation 1) Increase in prices because of increase in money supply 2) Increase in prices because of supply shocks (weather, strikes, supply chain, disruption) or unusual spiky demand. Core CPI is an attempt to measure (1) to ensure the money supply, which the fed controls is at balance (with their other mandate of full employment). It's a hard problem because there are lot of nuances and still we want to measure the same thing for a fair MoM or YoY comparison.

sdsaga12 5y ago

"In 1996, five economists, known as the Boskin Commission, were tasked with saving the government $1 trillion. They observed that if the CPI were lowered by 1.1 percent, then a $1 trillion could indeed be saved over the coming decade. So what did they do? They proposed a way to alter the formula that would lower the CPI by exactly that amount! This raises a question: Is economics being used as science or as after-the-fact justification, much like economic statistics were manipulated in the Soviet Union? More importantly, is anyone paying attention? Are we willing to give government agents a free hand to keep changing this all-important formula whenever it suits their political needs, simply because they think we won’t get the math?" This was written by Edward Frenkel, a math professor at UC Berkeley who was born in the USSR in 1968 and so, we can assume, had some familiarity with statistical games played by regimes trying to hold onto power. I invite you consider that you might extend too much faith toward federal institutions that have presided over a ceaseless rise in inequality and erosion of rights in recent decades. https://slate.com/technology/2013/02/should-algebra-be-in-curriculum-why-math-protects-us-from-the-unscrupulous.html https://slate.com/technology/2013/02/should-algebra-be-in-cu...

serverholic 5y ago
This is why cryptocurrency was invented. Satoshi even signed a statement about government bailouts in the first bitcoin transaction. The truth is that the game is rigged. Like entropy, government power always increases over a long enough timeframe. Anytime the spotlight is shined on government they manipulate the game or blame corporations. Then they introduce regulation to "protect" citizens but these regulations add up to just keeping big business entrenched.
- stjohnswarts 5y ago
  Satoshi doesn't get any credit for stating what people have been stating literally for decades before "he" came along. Let's not give him credit for anything other than the bitcoin algorithm.
  - serverholic 5y ago

SilasX 5y ago

Really? They don't want to track the inflation that results from the new money just being buried in stocks and real estate for safekeeping? Isn't that an indicator they're printing too much?

stjohnswarts 5y ago

All I know is my favorite Taco Bell meal is up 20% year-over-year