4 ms·

I thought it was pretty common knowledge that inflation numbers are deceptive and easily manipulated. It's [controversial]. It's the decline of purchasing powe

I thought it was pretty common knowledge that inflation numbers are deceptive and easily manipulated. It's [controversial]. It's the decline of purchasing power over time based on a basket of goods / services. So it all depends on how you fill that basket. [controversial]: https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex....

panick21_ 4y ago
That might work for some measures of inflation, but it doesn't work for the 'GDP Deflator' for example. That is a different way to measure inflation (and a more exact one) and it not so easy to fake. And even if we go with CPI stuff, the agencies that do these things try to stay consistent. At least in western countries they don't just do whatever they want. The idea that all departments of all western governments are secretly changing the data inputs to achieve some sort of grand conspiracy about inflation number is pretty much delusional thinking.
- tejohnso 4y ago
  > The idea that all departments of all western governments are secretly changing the data I don't think they have to do it secretly. They do it in the open, otherwise there wouldn't be an Investopedia article on CPI controversy that clearly indicates a few problems. There's no internal whistle blowing going on. It's in the open. > And even if we go with CPI stuff, the agencies that do these things try to stay consistent. Sure, perhaps they "try", but: "Over the years, the methodology used to calculate the CPI has undergone numerous revisions". "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI." My personal problem with CPI is that it doesn't include the cost of purchasing a home. I get it...it's not a "consumer good" or whatever. But if you're talking about inflation, and everyone jumps to CPI for that, then CPI should include it, or maybe the media should stop quoting it so much. It's not representative of what people want it to be. People want a way to quantify how much harder it is to establish a good life with their earnings. And I don't think the government is being honest about that. Maybe it's too much to ask.
  - panick21_ 4y ago
    > They do it in the open Then please point me at the methodological changes done by these government in the last 1-2 years that were specifically designed to hide higher inflation. > "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI." Can this pattern be shown to always lower CPI and can they show that all western governments have enacted the same changes? And such a methodology would maybe work over a long time-span, it could not be used to hide 1 years high inflation. CPI is just a dumb and useless measure all together. It really should have no relevance to economic discussion. For macro economic analysis of any kind, the GDP deflator is to be preferred. > People want a way to quantify how much harder it is to establish a good life with their earnings. That is a wrong way of thinking about any inflation measure. > And I don't think the government is being honest about that. Maybe it's too much to ask. Not sure what honest means here. I don't think the government states anywhere that CPI is some magical measure of 'how easy it is to establishing a good life'.
- pessimizer 4y ago
  No, the idea that administrations game the numbers to support their previous actions and future proposals is a given. Diagnosing people as mentally ill because they understand this is scary. The real problem is this class of claim: There are secret statistics that support my reaction, which would without those statistics be obviously irrational. I do not have access to these statistics, because their existence is being intentionally hidden from me, but from my trips to the grocery store and discussions in the breakroom, I know what they are intuitively, with a fairly high precision. I have been confirmed correct by some people I've met on the internet who are saying the same thing. If you felt this way, and could find enough people who also think this is true, you should be able to do a survey on your own, more representative basket of goods, and come up with a number that you find more meaningful. If you couldn't, you could at least attack the current basket of goods and methodology with specific criticisms, rather than vaguely plausible FUD. Instead, vaguely plausible FUD rules, because statistics that are not being offered are unfalsifiable.
  - panick21_ 4y ago
    A basket of goods is only relevant if you can compare it to historical data, otherwise its pointless. And if you start now you can't select your basket of goods and project it back.

panick21_ 4y ago

That might work for some measures of inflation, but it doesn't work for the 'GDP Deflator' for example. That is a different way to measure inflation (and a more exact one) and it not so easy to fake. And even if we go with CPI stuff, the agencies that do these things try to stay consistent. At least in western countries they don't just do whatever they want. The idea that all departments of all western governments are secretly changing the data inputs to achieve some sort of grand conspiracy about inflation number is pretty much delusional thinking.

tejohnso 4y ago
> The idea that all departments of all western governments are secretly changing the data I don't think they have to do it secretly. They do it in the open, otherwise there wouldn't be an Investopedia article on CPI controversy that clearly indicates a few problems. There's no internal whistle blowing going on. It's in the open. > And even if we go with CPI stuff, the agencies that do these things try to stay consistent. Sure, perhaps they "try", but: "Over the years, the methodology used to calculate the CPI has undergone numerous revisions". "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI." My personal problem with CPI is that it doesn't include the cost of purchasing a home. I get it...it's not a "consumer good" or whatever. But if you're talking about inflation, and everyone jumps to CPI for that, then CPI should include it, or maybe the media should stop quoting it so much. It's not representative of what people want it to be. People want a way to quantify how much harder it is to establish a good life with their earnings. And I don't think the government is being honest about that. Maybe it's too much to ask.
- panick21_ 4y ago
  > They do it in the open Then please point me at the methodological changes done by these government in the last 1-2 years that were specifically designed to hide higher inflation. > "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI." Can this pattern be shown to always lower CPI and can they show that all western governments have enacted the same changes? And such a methodology would maybe work over a long time-span, it could not be used to hide 1 years high inflation. CPI is just a dumb and useless measure all together. It really should have no relevance to economic discussion. For macro economic analysis of any kind, the GDP deflator is to be preferred. > People want a way to quantify how much harder it is to establish a good life with their earnings. That is a wrong way of thinking about any inflation measure. > And I don't think the government is being honest about that. Maybe it's too much to ask. Not sure what honest means here. I don't think the government states anywhere that CPI is some magical measure of 'how easy it is to establishing a good life'.
pessimizer 4y ago
No, the idea that administrations game the numbers to support their previous actions and future proposals is a given. Diagnosing people as mentally ill because they understand this is scary. The real problem is this class of claim: There are secret statistics that support my reaction, which would without those statistics be obviously irrational. I do not have access to these statistics, because their existence is being intentionally hidden from me, but from my trips to the grocery store and discussions in the breakroom, I know what they are intuitively, with a fairly high precision. I have been confirmed correct by some people I've met on the internet who are saying the same thing. If you felt this way, and could find enough people who also think this is true, you should be able to do a survey on your own, more representative basket of goods, and come up with a number that you find more meaningful. If you couldn't, you could at least attack the current basket of goods and methodology with specific criticisms, rather than vaguely plausible FUD. Instead, vaguely plausible FUD rules, because statistics that are not being offered are unfalsifiable.
- panick21_ 4y ago
  A basket of goods is only relevant if you can compare it to historical data, otherwise its pointless. And if you start now you can't select your basket of goods and project it back.