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Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the impo

Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the important things in life have gone up more than stated inflation. I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato. Meanwhile education, housing and healthcare are the least affordable they've ever been. https://en.m.wikipedia.org/wiki/Baumol_effect https://en.m.wikipedia.org/wiki/Baumol_effect

randomdata 2y ago
Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors. If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.
- wakawaka28 2y ago
  CPI is the most commonly cited inflation metric, and it is actually a cost of living metric. We could also use the velocity of money plus money supply stats, but that is very hard to relate to. Housing might be somewhat more valuable than it used to be, but the extreme valuation swings we've seen in the last 20 years were due to monetary policy and macroeconomic conditions, and not actual demand. Or I should say, demand for housing is always proportional to population. It's not like when people can't afford a house, that demand disappears. It just can't be acted on.
  - randomdata 2y ago
    > and it is actually a cost of living metric. It is not. A CPI measures the change in cost of a fixed basket of goods. A COLI measures a change in cost of a fixed level of "well-being". > It's not like when people can't afford a house, that demand disappears. It is like that. That's literally what defines demand. Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.
    - Teever 2y ago
      Why is economics stuff so hard? Like I swear to god I see variants of this thread almost every other day where someone is like 'i think that this economic thing is broken' and someone else comes along and is like 'no,no, you're just holding it wrong -- The thing you want to use to do this is...'. And despite witnessing this kind of encounter regularly I'm no more informed about economics. I've taken two first year econ courses and I still don't feel informed about it. Why is it that all too often economics discussions get further and further away from some objective measurement of reality and turn into semantics arguments over what obscurely named things like M1 and M2 or CPI actually even mean to me anyway? Is there like an authoritative source that defines all of these things and has a recent dataset of verified data to work work? Like what's the lib-economy or python package for economic stuff?
      - randomdata 2y ago
        > Why is economics stuff so hard? The basics aren't hard. But also not particularly useful outside of the work of economists. That is no doubt the problem you keep seeing: 'i think that this economic thing is broken [because I cannot find any applicability in my daily life]'. Economics can become hard as it is ultimately a study of human (possibly animal) behaviour, and these creatures seem erratic to our limited understanding.
      - SideQuark 2y ago
        > Is there like an authoritative source that defines all of these things and has a recent dataset of verified data to work work? Read any modern and popular university textbook, and good data can be found at FRED, BLS, Census, CBO, despite the usual conspiracy claims. https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ > Why is it that all too often economics discussions get further and further away from some objective measurement of reality Like physics, or biology, or math, economics is not getting further from the object of study - terminology needs defined precisely to prevent people from making wrong conclusions from misunderstanding or bad reasoning. Learning not only terminology, but the problems the terminology was created to avoid, takes time and study. But due to the complexity in each field this is needed. One cannot get proper conclusions using sloppy hand waving or touchy-feely ideas with little solid foundation.

randomdata 2y ago

Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors. If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.

wakawaka28 2y ago
CPI is the most commonly cited inflation metric, and it is actually a cost of living metric. We could also use the velocity of money plus money supply stats, but that is very hard to relate to. Housing might be somewhat more valuable than it used to be, but the extreme valuation swings we've seen in the last 20 years were due to monetary policy and macroeconomic conditions, and not actual demand. Or I should say, demand for housing is always proportional to population. It's not like when people can't afford a house, that demand disappears. It just can't be acted on.
- randomdata 2y ago
  > and it is actually a cost of living metric. It is not. A CPI measures the change in cost of a fixed basket of goods. A COLI measures a change in cost of a fixed level of "well-being". > It's not like when people can't afford a house, that demand disappears. It is like that. That's literally what defines demand. Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.
  - Teever 2y ago
    Why is economics stuff so hard? Like I swear to god I see variants of this thread almost every other day where someone is like 'i think that this economic thing is broken' and someone else comes along and is like 'no,no, you're just holding it wrong -- The thing you want to use to do this is...'. And despite witnessing this kind of encounter regularly I'm no more informed about economics. I've taken two first year econ courses and I still don't feel informed about it. Why is it that all too often economics discussions get further and further away from some objective measurement of reality and turn into semantics arguments over what obscurely named things like M1 and M2 or CPI actually even mean to me anyway? Is there like an authoritative source that defines all of these things and has a recent dataset of verified data to work work? Like what's the lib-economy or python package for economic stuff?
    - randomdata 2y ago
      > Why is economics stuff so hard? The basics aren't hard. But also not particularly useful outside of the work of economists. That is no doubt the problem you keep seeing: 'i think that this economic thing is broken [because I cannot find any applicability in my daily life]'. Economics can become hard as it is ultimately a study of human (possibly animal) behaviour, and these creatures seem erratic to our limited understanding.
    - SideQuark 2y ago
      > Is there like an authoritative source that defines all of these things and has a recent dataset of verified data to work work? Read any modern and popular university textbook, and good data can be found at FRED, BLS, Census, CBO, despite the usual conspiracy claims. https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ > Why is it that all too often economics discussions get further and further away from some objective measurement of reality Like physics, or biology, or math, economics is not getting further from the object of study - terminology needs defined precisely to prevent people from making wrong conclusions from misunderstanding or bad reasoning. Learning not only terminology, but the problems the terminology was created to avoid, takes time and study. But due to the complexity in each field this is needed. One cannot get proper conclusions using sloppy hand waving or touchy-feely ideas with little solid foundation.