Comment by opendais | Hacker News Reader

Comment by opendais | Hacker News Reader

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Inflation is normal:

http://www.bls.gov/news.release/cpi.nr0.htm

It is well in line with historic norms.

Wage Growth is net positive adjusted for inflation again:

http://www.nytimes.com/2014/04/05/business/economy/sign-of-s...

It has a nice graph if you scroll down and don't want to read.

The underlying problem with trying to "fix" wages is the simple fact that with globalization you can't really push the wages for the US much higher than they are [except at the bottom where you can't really outsource the guy working in fast food for minimum wage].

It seems to be more the standard bubble event on investments due to cheap credit and poor allocation of tax burdens/govt spending. We need to do things like shift the tax burden to Capital and reduce it on the poorest of the working population. We need to fix our infrastructure issues while we can do so on cheap credit and when interest rates rise we simply cut back to "normal" (which is really just generating a different kind of debt, you can't ignore infrastructure forever).

> It is well in line with historic norms.

The CPI (used to gauge inflation) has been modified in a variety of ways over the past 35 years. Various estimates of what the annual rate would have been over the past four years if earlier methods of calculation had been continued come up with numbers in the 5%-to-10% range.

http://business.time.com/2013/03/12/if-theres-no-inflation-w...

That isn't true at all :/

http://www.bls.gov/cpi/cpiqa.htm#Question_5

Its a variance of less than 00.3% due to methodology changes. I understand its a popular myth.

Please provide a source that accurately copies the methodology from the 1970s and agrees with your claim.

If you are unable to do so without citing Shadowstats or another source that wants money to see their full methodology, its an invalid claim intended to milk money from people with fixed belief systems.

Interesting article about inflation: http://business.time.com/2013/03/12/if-theres-no-inflation-w...

Yes, if you cherrypick items you can find item X changed faster than the total basket for CPI.

CPI is intended to gauge the general rate of inflation over the economy as a whole, not that of specific purchasing patterns by individuals. As such, comparing a CPI from years ago (1999) to now (2014) is roughly equivalent.

You can claim the number itself is wrong but not that is wrong compare to the values it held previously under the same methodology. [e.g. CPI can be claimed to be X% lower than reality, but if CPI is 2.7% in 1999 and 2.1% in 2014 under the same methodology the relative level of inflation is effectively identical]

Even the title is wrong: "If There’s No Inflation, Why Are Prices Up So Much?"

If you look at the CPI from that point in time: http://www.bls.gov/news.release/archives/cpi_03152013.htm

It shows 2% inflation.

It is a linkbait article with a false premise and lots of cherrypicking.

1999: http://www.bls.gov/news.release/history/cpi_01142000.txt

Yeah... it certainly seems like there's price inflation if I cherry pick things like food, real estate, energy, health care, and college tuition.

I'm old enough to have lived through a good economic period with widespread optimism: the 1990s. We are in a depression.

Please provide evidence we are in a depression that is grounded in facts, not anecdotes.

who gets to choose what's in what basket? Which choices are correct, and which ones are not?

> who gets to choose what's in what basket?

Economists. Y'know, people who do that professionally.

> Which choices are correct, and which ones are not?

http://www.bls.gov/cpi/cpifaq.htm#Question_6

Ohh, the "trust me I'm a professional" defence. That doesn't answer the question.

Or do they use chicken entrails?

By all means, provide a concrete example that doesn't rely on cherrypicking data [such as simply picking food or a methodology I can't find without giving someone money] showing they are incorrect.

Or you could look at the "Billion Prices Project" at MIT which actually only monitors ~5 million prices, but still says inflation is only a very little bit worse than the CPI...

http://bpp.mit.edu/usa/

Food prices are increasing http://online.wsj.com/articles/as-food-prices-rise-fed-keeps... but it only affects households who require food.

1) Yay paywalled article I can't bypass by adding ?share=1 or the like.

2) I never said inflation didn't exist. I said it was normal. Overall, inflation is in line with norms. Yes, you can pick one category and say its higher...that is called cherrypicking data.

Strangely, people need clothes and shelter and such too...which was left off. Hmm. I wonder what else could cause this food inflation?

Perhaps droughts in states that normally produce significant amounts of crops perhaps?

http://online.wsj.com/news/articles/SB1000142405270230328780...

Hmm. Same paper, completely different point of view.

However, since I actually want you to be able to read the article:

http://www.usatoday.com/story/money/business/2014/03/18/food...

"Droughts, unusually cold winter weather, rising exports and a virus outbreak in the hog population are among the causes of food inflation, which is expected to accelerate in 2014."

It is almost like the weather and a farmer's access to sufficient water supplies is involved in farm production. :/

It remains a mystery to me why people always cite "food inflation" during unusually tough conditions for food production as "proof" the CPI is wrong. :/

I strongly recommend:

https://www.goodreads.com/book/show/32082.The_Great_Wave

If you think inflation is "normal". It may be, but rather in the sense that historical experience shows us that authorities use inflation to confiscate the economic power of the downtrodden.

Go look at Japan.

That is what an economy with no inflation looks like in the modern world.

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