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Comment by bko | Hacker News Reader

Usually if official statistics and what you see are misaligned, its the official statistics that are wrong.

What's your general impression regarding price levels in the US? How much has your grocery bill gone up? How about rent? What about restaurant bills? Services like haircuts? Whats your credit card bill look like, excluding gasoline?

Personally I have seen prices go up well above 10%. Inflation metrics are complicated and there is a huge incentive to keep the official numbers down as they affect trillions in spending in terms of social security and other numbers tied to official inflation.

To put this number in context, Congress gave themselves a 21% increase in House office budgets to account for inflation

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Across the board? At least 25%, 50% in some sectors like foods.

They keep, and some people on HN, keep calling it a conspiracy when you mention actual inflation is a lot higher than reported, my question is what is this crowd's reasoning? Are they so well off that they are not able to see the rapid rise in prices because they use maids to do the grocery shopping?

Why is it a conspiracy to suggest actual inflation is far above and beyond what is reported by the Feds, who are stuck between a rock and a hard place when it comes to controlling the money markets now?

If they raise rates to match actual inflation they are going to cause the asset bubble to burst. If they don't raise rates than they are going to find hyperinflation that will certainly damage USD's "exorbitant privilege"

> Why is it a conspiracy to suggest actual inflation is far above and beyond what is reported by the Feds

The conspiracy is that it’s treated as a conspiracy. Local inflation varies wildly [1]. In official statistics. And inflation is personal, dependent on your basket of goods and services. There is no market evidence that inflation is endemic, but the market is frequently wrong.

> so well off that they are not able to see the rapid rise in prices

Many on this forum have equity holdings and/or in-demand jobs. Those make one somewhat inflation tolerant.

[1] https://www.bls.gov/charts/consumer-price-index/consumer-pri...

> Many on this forum have equity holdings and/or in-demand jobs. Those make one somewhat inflation tolerant.

Yeah I’m genuinely shocked that people seem so upset about inflation. Then again I couldn’t tell you if the gas price down the road begins with a 3, a 4, or a 5.

> They keep, and some people on HN, keep calling it a conspiracy when you mention actual inflation is a lot higher than reported, my question is what is this crowd's reasoning?

I wouldn't call it a conspiracy, but throwing out random number like "25-50%" because you noticed your one specific grocery bill is more expensive also isn't an argument I'm going to give much credence to.

The government is actually very transparent about how they calculate inflation and what goes into it, so if you're going to argue that they're bullshitting you need to argue one of:

1. The basket that they use to calculate the price index isn't a good representation of most people.

2. They're fibbing on specific prices.

3. The "smoothing" they always do can hide some of the recent acute inflation.

If you want to make any of those arguments, with data, great! Please go ahead. I've certainly seen plenty of good arguments related to points 1 and 3, not so much point 2. Otherwise, it's fine to say you notice things you buy seem a lot more expensive, but that's not an argument that the Fed is somehow fudging the numbers.

i wasn't talking about groceries when i mentioned that number

It doesn't matter what you were referencing. As it's said a million times on HN, throwing out anecdotes is not data. If you have an problem with any of the specifics of how the CPI are calculated, then make it.

Here's a comparison of CPI based on how it is calculated now with how it was calculated in the 1990s and 1980s. [0] There's a pretty clear trend here. Maybe the current calculation is more accurate. But I doubt it. Looks like suppression to me.

[0]: http://www.shadowstats.com/alternate_data/inflation-charts

> 2. They're fibbing on specific prices.

Zillow rent index up 17%, CPI rent index up 5%

Zillow calculates it's rent based on previous and current listed rental prices.

CPI calculates rent by asking people how much they are currently paying for rent or how much do they think it would cost to rent their place.

>CPI calculates rent by asking people how much they are currently paying for rent or how much do they think it would cost to rent their place.

That's OER, which is computed separately from rent.

Yes, and if you didn’t move your rent/mortgage went up much less than that

Here's a website that compares CPI today with the way it was calculated in the 1990s and 1980s. Suffice to say, it appears the government is trying to suppress CPI over time. [0]

[0]: http://www.shadowstats.com/alternate_data/inflation-charts

The only way your grocery bill is up 50% is if you only eat used cars and gasoline.

Official stats say grocery store items are up 10%, which is roughly line with my experience. It can vary a lot from item to item so it really depends on your diet. White bread is up 6% while wheat bread is up 9%. Meats are up 15% while fresh veggies are up 6%.

>Usually if official statistics and what you see are misaligned, its the official statistics that are wrong.

Nope, a few people's unmeasured selection bias is no where near as accurate as a professional methodology done like the official numbers.

>there is a huge incentive to keep the official numbers down

Also false. If the numbers were gamed, there would be significant arbitrage employed in markets to extract value from the lie. There are ample papers analyzing this, and no one has found a way to do it, since the numbers are the best possible.

Also the numbers are done in many places, from Goldman Sachs, to the Billion Prices project at MIT, to the Bureau of labor and Statistics, and so on.

If you really think the numbers are gamed, do this experiment (I have, it's easy to do, and then you'll never claim the numbers are gamed again since you methodically checked them).

Take BLS listed inflation for a decent period of time, say 20-30 years. Make a basket of goodssplit by how most people buy: energy, housing, food, eneterainment, etc.

Pick a list of goods, say same sized apartments, houses, foods, etc.

Look at prices now. Write them down. Hide that list so you don't cheat.

Look at ads from the beginning of the period. Get prices.

Compute.

Now add say 1% to BLS annual inflation numbers, and compute.

Viola! BLS and rest are very accurate. People's unmeasured selection bias beliefs are not.

>Usually if official statistics and what you see are misaligned, its the official statistics that are wrong.

See, I think the opposite. If your numbers differ from the US gov. official ones, you're either doing something wrong, or measuring a different thing.

The BLS in particular aims for consistency in reporting. They ask people what they bought, and for how much, then they go around collecting real world pricing information about products.

No other entity is putting that much work and effort into collecting pricing information. So anyone reporting different numbers is less accurate than the official BLS ones.

Even people who complain that they under-report "real" inflation use BLS numbers, but they change the weights on the various categories such that categories experiencing the highest inflation are also weight the highest.

Going with your experiences over soundly collected data is a very risky move prone to bias and discrimination (only noticing what affects people like you).

Data, when reported by a reputable organization, is going to be substantially more predictive.

Reputability is equally subjective. It is not immune from bias and discrimination.

Incentives are another interesting factor to consider.

Reputability is not equally subjective (though it is somewhat subjective), it is based on past performance and current utilization through a trust network.

If an institution has a history of providing a certain quality of service, and is successfully used to make highly consequential decisions, it is objectively more reputable than an institution with neither of those things.

> Reputability is not equally subjective

Reputability is the aggregate of individual opinion, which is the definition of subjectivity.

By that argument, all knowledge and belief and fact is the aggregate of individual opinion, so nothing would be objective.

More likely there is a continuum, and more reputable places have more objective (and hence less subjective) output than less reputable places.

Consider the contrast between these statements:

"The Bureau of Labor Statistics is a reputable institution"

"A triangle has three sides"

"Governments, politicians and their bureaucrats are trustworthy"

"Two parallel lines will never meet"

http://steve-patterson.com/deduction-induction-and-axioms/

Aggregating individual opinion (sometimes) has a washing-out effect on bias, which makes it valuable as a tool to push towards objectivity. [0]

This is why I much prefer to follow guidance from institutions over individuals. There's also a "stewardship" in institutions that seems effective in countering other forms of bias (but not all).

Of course there's a whole lot of bias left over that doesn't make this a fire-and-forget strategy, but comparatively it seems closer to objectivity than to just trust one's eyes alone, which has effectively zero systemic corrections for bias.

[0] - You may know about this already, but I think of it like crowds singing, and if you'll afford me a bit of metaphorical license, here's a better explanation of how that works than what I could write: https://physics.stackexchange.com/questions/382429/in-concer...

> Congress gave themselves a 21% increase in House office budgets to account for inflation

For staffers. Not members of Congress [1]. Never officially tied to inflation.

[1] https://www.factcheck.org/2022/03/spending-bill-includes-pay...

Right, that's what I said. For office budgets. I didn't say it was for them. I got the numbers from that exact website. It's not "officially tied to inflation" but obviously if you increase budgets its due to higher costs.

> but obviously if you increase budgets its due to higher costs

That isn't remotely obvious and in this case is very obviously not true. This is a chronically underfunded program that Democrats have been lobbying to increase for years. AOC, for instance, has been pushing for this since she first entered Congress, well before any inflation showed up.

It's entirely disingenuous to point to a budget increase in a single extremely-small Congressional staff program and paint it as evidence of broad-based inflation.

>It's entirely disingenuous to point to a budget increase in a single extremely-small Congressional staff program and paint it as evidence of broad-based inflation.

Maybe, but it's a perfectly valid data point. Congressional staffers are struggling because, in the D.C. area, costs are rising very quickly, and the low-paid staffers are having trouble paying bills because of it.

It's not disingenuous to suggest this is a signal. Also, Democrats are always lobbying for an increase in all budgets. They got this one through because they were going to lose staff who can't make the job work because of rising living costs. I.e., inflation.

>It's not disingenuous to suggest this is a signal.

So would it disingenuous to point out Xbox prices dropped significantly recently then claim it as evidence there is no inflation?

Using such simple, single data points is disingenuous when there is ample broad based data to point to instead. Ask why he picked something with a 21% increase instead of something with a 4% increase, then you understand why it's disingenuous.

That is the problem with anecdotes versus broad and properly computed inflation.

> How much has your grocery bill gone up? What about restaurant bills?

What's interesting is although fast food prices have went up, it doesn't seem like casual dining chains have gone up. So even though steak prices have doubled at the grocery store, they've stayed the same at the chain steakhouses.

The highest end chain place I eat at is Chipotle, but I have noticed several increases in local restaurants. One we go to regularly went up 25% mid-late 2021, and recently went up another 33% on our normal order. Which I guess I should be glad about because most other ones have shut down.

> Personally I have seen prices go up well above 10%.

For what goods/services? Have you been tracking the same goods/services over the past year to make this analysis?

> Inflation metrics are complicated and there is a huge incentive to keep the official numbers down as they affect trillions in spending in terms of social security and other numbers tied to official inflation.

You haven't provided anything aside from personal anecdote (without any actual data to support it). Your understanding is built entirely on your own experience, the official numbers are built on a transparent basket of goods that is meant to represent the entire country.

For me, housing costs (most people's largest expense) hasn't changed in 3 years because I have a 30-year mortgage. Does that mean that the 5% CPU measure of housing expenses is false? Of course not.

> Usually if official statistics and what you see are misaligned, its the official statistics that are wrong.

"What you see" is literally what's being measured, though. Typical prices for typical commodities grew less than expected. The outlier is one particular commodity (petroleum) which is experiencing an external shock.

Sanctions on Russia are poorly explained as "inflation", obviously.

> Personally I have seen prices go up well above 10%.

On what? Does that not match up with the data in the report? If so, document it! You'll be internet famous, if nothing else.

> Usually if official statistics and what you see are misaligned, its the official statistics that are wrong.

This is QAnon tier logic. “All my friends voted for Trump, therefore the vote count was fabricated!”

> What's your general impression regarding price levels in the US? How much has your grocery bill gone up?

My grocery bill isn't in a vacuum. Does anyone buy the same basket of groceries constantly? My career has been on a steady rise and my lifestyle has inflated.

> How about rent?

It's up a TON in many LCOL places - but in many of the most expensive places, it's gone up less in the last 3 years than normal (and in some places down). Either way - 67% of people are homeowners, and their payments went DOWN a lot because the Fed allowed everyone to refinance at historically low levels.

> What about restaurant bills? Services like haircuts?

My anecdata is that I'm shocked so far none of this has gone up. I do expect it HAS to go up probably 10-20-50% eventually / soon. But I haven't seen it happen yet.

> Whats your credit card bill look like, excluding gasoline?

Again - who's credit card bill is in a vacuum?

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