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There are opposing views:
Former top Obama advisor Larry Summers wrote earlier this week:
The underlying rate of inflation is still trending downwards...And the last we heard from Paul Krugman on inflation, his view was:
There’s really nothing here to shake my view that deflation, not inflation, is the threat.
Bob, do you know what they changed in 1990 that produces such different results?
ReplyDelete"Which calculates the CPI the way it was calculated by the government in 1990"
ReplyDeleteNo, it doesn't. It just uses a fudge factor without recalculating CPI in any meaningful way.
"I'm not going back and recalculating the CPI. All I'm doing is going back to the government's estimates of what the effect would be and using that as an ad factor to the reported statistics."
http://www.econbrowser.com/archives/2008/10/shadowstats_res.html
Chris, in 1990 Bush started changing the way "core" versus "other" items were calculated, in order to "remove volatility". It was just an underhanded way to lie.
ReplyDeleteInstead of high inflation during the mid-2000s, when homes were skyrocketing, "owners equivalent rent" is used to remove the inflation.
@Chris P
ReplyDeleteFrom what I have heard, it was the way health care costs were calculated. Something tells me that only scratches the surface though.
It's also the ultimate way they can default on Social Security since it's inflation-adjusted.
ReplyDeleteOver the past 21 years what people buy is different, so this is not relevant.
ReplyDeleteYou might as well take a basket of goods from 1900, see how prices from that changed the last 10 years, and call it inflation.
"Over the past 21 years what people buy is different, so this is not relevant."
ReplyDeleteHow is it not?
"You might as well take a basket of goods from 1900, see how prices from that changed the last 10 years, and call it inflation. "
Changes in production should push prices down, not up, and this applies for a majority of goods. So this doesn't help your case. Do you deny that there has been a significant corrosion of the value of various national currencies, and if so on what basis? Hint: improvements in productivity do not imply there have not been inflationary pressures - if anything, they serve to dampen price inflation.
I think most people like to buy things such as beef.
ReplyDeletehttp://www.mongabay.com/images/commodities/charts/beef.html