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Comment by inflationish | Hacker News Reader

Just read about the inflation trimming. It is one of the ways the government make inflation to appear lower than it is, making people happy. In US, the 31% of the goods with highest inflation are excluded, but only 24% of the goods with lowest inflation, making the inflation appear much lower than it is.

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Trimmed inflation measures exist, but this one is not it. They’re not used in a sneaky way, they’re clearly named “trimmed CPI”, “trimmed PCE” etc.

Trimmed inflation is a better measure than non-trimmed for goods with substitutes. Bacon going up 1000% in price is not as bad as all food going up 5% in price because you can just stop eating bacon, but you can't just stop eating.

Yes but now you don't get to eat bacon and you're eating tofu bacon instead. You're still alive, but are you really living?

More seriously, that quality of life decrease is now completely ignored. I think it's worth acknowledging that it's happening.

Yeah but so much of happiness is relative and pure mindset. If you never knew about bacon or forgot about it, you would be just as happy.

And at the end of the day, it’s more important to be happy

You will own nothing. And you will be happy.

- a popular quote in the internet

wrong, it's a shitty metric. consumers care about inflation bc it represe ts their quality of life getting more expensive. trimming is the equivalent of saying "lol just downgrade" which is not a good answer.

you can't watch people switch their crab and milk for krab and powdered milk then be like "oh we'll just trim that out of inflation lmao". inflation is not supposed to measure change in average cost of necessities, it's supposed to measure change in a basket of basic goods.

And that basket naturally shifts over time as certain goods which have reasonable substitutes rise sharply in price, as technology changes, as tastes change, etc. It would obviously be silly to compare against the same basket of goods as was used in 1970.

There is some truth to it if you want to think about purchasing power and quality of life.

A TV today is not the same as a TV in 1970.

The groceries a family buys today are not the same Goods or quality as someone would have bought in 1920

Its supposed to measure the effects of inflation on the wealthy, which is why substitutes are important, because it impacts their grocery stocks.

You can starve.

Ahh that makes sense. The problem is in the real world, people are still feeling nasty inflation.

It's beginning to feel like a 'let them eat cake' moment from the wealthy.

Where do you get the lists of "goods with highest inflation" and "goods with lowest inflation?

The link at the top of the page is a good start.

Then that should hurt them when inflation reduces, no?

How? If they're always excluding 7% more of the goods whose prices rose more, the trimmed CPI will always be lower than the CPI-U, which some people say is always lower than what people actually experience.

The entitlement adjustments made based on trimmed CPI will always be less than the inflation even the gov't admits people are experiencing.

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