5 ms·

I'm not sure what you mean by "honest". http://delong.typepad.com/sdj/2011/12/james-hamilton-on-shadowstats-and-niall-fergusons-claim-that-true-inflation-is-mo

by jshen 15y ago

I'm not sure what you mean by "honest". http://delong.typepad.com/sdj/2011/12/james-hamilton-on-shadowstats-and-niall-fergusons-claim-that-true-inflation-is-more-than-10-per-year.html http://delong.typepad.com/sdj/2011/12/james-hamilton-on-shad...

beagle3 15y ago
I will look into brad delong's blog later when I have time, but I did factcheck some of shadowstats numbers four years ago for work, and they were right on the money. E.g., the modern definition of unemployment is indeed very different from the definition of 40 years ago, which would yield something like 20%-25% today (compared to 12% or so today). And yet, everyone assumes it is the same statistic. Same with inflation. Personally, my 3 biggest expenses (rent, food, energy, in that order) have been going up at almost 10%/year over the last 3-4 years. I don't see a reason to doubt the shadowstats CPI metric. You're welcome to trust BLS data. Just be aware that you can't trust them when they are published [ http://www.zerohedge.com/article/visualizing-propaganda-error-term-behind-bureau-labor-statistics http://www.zerohedge.com/article/visualizing-propaganda-erro... ] and given that 90% of the values are revised to be worse within a month, their methodology cannot be considered statistically sound. edit: added "almost" to 10%. Just checked, and rent was "only" 8%/year.
- jshen 15y ago
  Implying that most other economists in the US are dishonest is a bold claim that needs some significant evidence. Implying that something is dishonest because it is different than it was in the past is a non sequitur. "Personally, my 3 biggest expenses (rent, food, energy, in that order) have been going up at almost 10%/year over the last 3-4 years. I don't see a reason to doubt the shadowstats CPI metric." What was that you were saying about sound statistics ;)
  - beagle3 15y ago
    > Implying that most other economists in the US are dishonest is a bold claim that needs some significant evidence. I do not think that, and I do not think that I implied that anywhere. Rather, almost no one outside the BLS collects this information in the US on a scale that allows you to contest official numbers - so that BLS gets to claim whatever they want, and most economists in the US take that as gospel (and are wrong because they are misled, not because they are dishonest). > Implying that something is dishonest because it is different than it was in the past is a non sequitur. Appeal to authority ("obviously, the BLS/Fed had their legitimate reasons to revise the calculations") is a fallacy. And I did give the reasoning, so let me repeat amd expand that in case you missed: Government gets income indexed to real inflation (by virtue of being a percentage of wages/profits/transactions) - so it is not affected by accuracy of inflation numbers. Government expenditure (salaries, social security) is indexed to a computation controlled by the government. Furthermore, if this computation results in a number 0%-3%, everyone is happy, even if this is not supported by the underlying facts. Said computation has been revised several times in the last 40 years, where new computation always and consistently results in a number lower than it would have been had you used earlier formulas. Now, what do you find more plausible: Everyone in government (and extended government - the Fed) was trying their best to understand the economy, and it just happens that all revisions make government look better - or that these revisions were made because they make government look better, despite underlying facts? Oh, and take into account that government and the fed is actually full of career politicians (bernanke campaigned to become fed chief). At some point I factchecked government stats and actions for a living. My conclusion is that it is all fudged, nothing can be trusted, mistakes get made to make the government look better 90% of the time. Law enforcement (especially in case of the SEC) is very selectively applied. I can cite numerous examples, but I'm tired. Do your own research (karl deninger, zerohedge, michael shedlock are good starting points), or keep watching the CNN / CNBC government mouthpieces and believe all is well.
    - jshen 15y ago
      http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-inflation/ http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-... Is the BPP index faked as well? Is krugman dishonest or mislead, or maybe incompetent? This can also be a difference of opinion, that we can settle with lot's time. But I still dislike your original implication that people asserting a different number for inflation are dishonest.
      - beagle3 15y ago
        I cannot decide whether Krugman is dishonest or incompetent, but way too many of his assertions and op-eds can be factually contradicted; deninger used to do that weekly until he got tired of it. Did you notice that between 1-Jul-2010 and 31-dec-2010 the BPP was >=2.3 (closer to 3% most of the time) while the official CPI was at <1.3% (closer to 1% most of the time)? The BPP was constructed to be similar to the CPI. If you constructed it to be close to the CPI of 30 years ago, it would have been higher. > But I still dislike your original implication that people asserting a different number for inflation are dishonest. It's not arbitrary people. The number of people who decide the CPI formula is ridiculously small - there might be 20 economists working on it, but ultimately it is a political decision by a handful of politically motivated people at the BLS to switch to a new computation, and the entire economic profession just accepts it as gospel. And I stand by my assertion that these politically motivated decisions do not have any "scientific purity" (whatever that might mean) or the people's well being in mind -- it has specific goals in mind, which end up harmful (through no direct malice)
        jshen 15y ago
        so the BPP people are part of this conspiracy too?
        beagle3 15y ago
        >> The BPP was constructed to be similar to the CPI. If you constructed it to be close to the CPI of 30 years ago, it would have been higher. > so the BPP people are part of this conspiracy too? You insist on not reading what you are replying to. I see no point in this discussion.

by jshen 15y ago

beagle3 15y ago

I will look into brad delong's blog later when I have time, but I did factcheck some of shadowstats numbers four years ago for work, and they were right on the money. E.g., the modern definition of unemployment is indeed very different from the definition of 40 years ago, which would yield something like 20%-25% today (compared to 12% or so today). And yet, everyone assumes it is the same statistic. Same with inflation. Personally, my 3 biggest expenses (rent, food, energy, in that order) have been going up at almost 10%/year over the last 3-4 years. I don't see a reason to doubt the shadowstats CPI metric. You're welcome to trust BLS data. Just be aware that you can't trust them when they are published [ http://www.zerohedge.com/article/visualizing-propaganda-error-term-behind-bureau-labor-statistics http://www.zerohedge.com/article/visualizing-propaganda-erro... ] and given that 90% of the values are revised to be worse within a month, their methodology cannot be considered statistically sound. edit: added "almost" to 10%. Just checked, and rent was "only" 8%/year.

jshen 15y ago
Implying that most other economists in the US are dishonest is a bold claim that needs some significant evidence. Implying that something is dishonest because it is different than it was in the past is a non sequitur. "Personally, my 3 biggest expenses (rent, food, energy, in that order) have been going up at almost 10%/year over the last 3-4 years. I don't see a reason to doubt the shadowstats CPI metric." What was that you were saying about sound statistics ;)
- beagle3 15y ago
  > Implying that most other economists in the US are dishonest is a bold claim that needs some significant evidence. I do not think that, and I do not think that I implied that anywhere. Rather, almost no one outside the BLS collects this information in the US on a scale that allows you to contest official numbers - so that BLS gets to claim whatever they want, and most economists in the US take that as gospel (and are wrong because they are misled, not because they are dishonest). > Implying that something is dishonest because it is different than it was in the past is a non sequitur. Appeal to authority ("obviously, the BLS/Fed had their legitimate reasons to revise the calculations") is a fallacy. And I did give the reasoning, so let me repeat amd expand that in case you missed: Government gets income indexed to real inflation (by virtue of being a percentage of wages/profits/transactions) - so it is not affected by accuracy of inflation numbers. Government expenditure (salaries, social security) is indexed to a computation controlled by the government. Furthermore, if this computation results in a number 0%-3%, everyone is happy, even if this is not supported by the underlying facts. Said computation has been revised several times in the last 40 years, where new computation always and consistently results in a number lower than it would have been had you used earlier formulas. Now, what do you find more plausible: Everyone in government (and extended government - the Fed) was trying their best to understand the economy, and it just happens that all revisions make government look better - or that these revisions were made because they make government look better, despite underlying facts? Oh, and take into account that government and the fed is actually full of career politicians (bernanke campaigned to become fed chief). At some point I factchecked government stats and actions for a living. My conclusion is that it is all fudged, nothing can be trusted, mistakes get made to make the government look better 90% of the time. Law enforcement (especially in case of the SEC) is very selectively applied. I can cite numerous examples, but I'm tired. Do your own research (karl deninger, zerohedge, michael shedlock are good starting points), or keep watching the CNN / CNBC government mouthpieces and believe all is well.
  - jshen 15y ago
    http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-inflation/ http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-... Is the BPP index faked as well? Is krugman dishonest or mislead, or maybe incompetent? This can also be a difference of opinion, that we can settle with lot's time. But I still dislike your original implication that people asserting a different number for inflation are dishonest.
    - beagle3 15y ago
      I cannot decide whether Krugman is dishonest or incompetent, but way too many of his assertions and op-eds can be factually contradicted; deninger used to do that weekly until he got tired of it. Did you notice that between 1-Jul-2010 and 31-dec-2010 the BPP was >=2.3 (closer to 3% most of the time) while the official CPI was at <1.3% (closer to 1% most of the time)? The BPP was constructed to be similar to the CPI. If you constructed it to be close to the CPI of 30 years ago, it would have been higher. > But I still dislike your original implication that people asserting a different number for inflation are dishonest. It's not arbitrary people. The number of people who decide the CPI formula is ridiculously small - there might be 20 economists working on it, but ultimately it is a political decision by a handful of politically motivated people at the BLS to switch to a new computation, and the entire economic profession just accepts it as gospel. And I stand by my assertion that these politically motivated decisions do not have any "scientific purity" (whatever that might mean) or the people's well being in mind -- it has specific goals in mind, which end up harmful (through no direct malice)
      - jshen 15y ago
        so the BPP people are part of this conspiracy too?
        beagle3 15y ago
        >> The BPP was constructed to be similar to the CPI. If you constructed it to be close to the CPI of 30 years ago, it would have been higher. > so the BPP people are part of this conspiracy too? You insist on not reading what you are replying to. I see no point in this discussion.