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Inflation Truthers

awealthofcommonsense.com

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Re: Inflation Truthers

#31

Post by coredog64 »

mlthoughts2018 wrote: post #12
iguy wrote: post #9

It's a bit confusing what he's arguing against. But his 2nd-last graph is the good one, [1]. That's only 20 years but [2] is the same thing since 1950. Some things have become much cheaper, other things have become more expensive. Attempting to summarize that in one number seems like it hides more than it exposes, no matter what number you pick. [1] https://awealthofcommonsense.com/wp-content/uploads/2021/01/... [2]…

The final graph on median home mortgage payments is misleading too. That can be propped up by REITs and increasing institutional ownership of consumer homes. There’s also the issue of more millennials living with parents and relatives, unable to afford their own homes, which can be hidden in that. Definitely can’t conclude from it that wages and purchasing power have kept up with mortgage costs.

Millennials can live at home because average home size has increased. My first house, built in the late 19th/early 20th century had indoor plumbing retrofitted and would fit in the garage of my current house.

Re: Inflation Truthers

#32

Post by JoeAltmaier »

BlueTie wrote: post #30

Isn't this entire article missing the difference between a luxury item and an essential item? A smartphone 10 years ago was a luxury for just about everyone who owned one (that is, bought with extra money) now it's a requirement. The luxury purchase folks are certainly getting a better deal as apples:apples prices go down; but if you're paycheck to paycheck and used to be able to not buy a smartphone but now have to…

Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.

Re: Inflation Truthers

#33

Post by darepublic »

> You used to pay $14.99 for a single CD that may have had 2-3 songs at most that you enjoyed. Now you can pay $14.99 a month for literally all the music in history.

Not if you picked the right album!

Re: Inflation Truthers

#34

Post by TheTrotters »

PhaedrusV wrote: post #25
maest wrote: post #3

Is the author debating a strawman or something? Actually, they just seem confused. At the start, they state asset price increase is not inflation, then, at the end, agree that there is some inflation going on in the real estate space. So the author is agreeing with the people they're supposedly countering. I don't understand the point of this piece.

Yes, the author is debating a straw man. The argument that the government is understating inflation is a pretty simple one. 1) The government is heavily incentivized to understate inflation in order to limit its expenditures for social security and TIPS, both of which are indexed to inflation. Social security in particular would explode in costs if, say, the official rate had been 1% higher on average over the past 3…

>Second, and the big point that the article missed entirely, is that real gdp per capita HAS been declining, reflecting that decrease in standard of living that one would expect to see if inflation were understated.

Not true. See https://fred.stlouisfed.org/series/A939RX0Q048SBEA

And why resort to conspiracy theories? Look at other data sources. They are consistent with the official inflation rate. E.g. https://fred.stlouisfed.org/series/T10YIE or MIT Billion Prices Project.

Re: Inflation Truthers

#35

Post by VBprogrammer »

JoeAltmaier wrote: post #32
BlueTie wrote: post #30

Isn't this entire article missing the difference between a luxury item and an essential item? A smartphone 10 years ago was a luxury for just about everyone who owned one (that is, bought with extra money) now it's a requirement. The luxury purchase folks are certainly getting a better deal as apples:apples prices go down; but if you're paycheck to paycheck and used to be able to not buy a smartphone but now have to…

Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.

I think you are seriously underestimating the number of essential services which are now mostly been conducted online. Try finding a property to live in or a new job without using the internet.

Re: Inflation Truthers

#36

Post by xibalba »

Others have claimed that the author buried the lede by placing the chart which shows runaway healthcare (hospital and medical care services) inflation at the end of the article.

However, there are sound arguments for why healthcare costs have not actually inflated much. Essentially, the argument goes, you're not buying the same thing that was available in the past. It's an apples to oranges comparison.

Cliff Asness has a great article touching on this topic: https://www.aei.org/articles/the-healthcare-myths-we-must-co...

Higher education on the other hand...

Re: Inflation Truthers

#37

Post by saurik »

iguy wrote: post #9

It's a bit confusing what he's arguing against. But his 2nd-last graph is the good one, [1]. That's only 20 years but [2] is the same thing since 1950. Some things have become much cheaper, other things have become more expensive. Attempting to summarize that in one number seems like it hides more than it exposes, no matter what number you pick. [1] https://awealthofcommonsense.com/wp-content/uploads/2021/01/... [2]…

These lines cluster in interesting ways. Is this a mere coincidence? Is this a weird selection bias in how the graph was created? Is this an actual correlation in where these prices come from?

Re: Inflation Truthers

#38

Post by shipman05 »

JoeAltmaier wrote: post #32
BlueTie wrote: post #30

Isn't this entire article missing the difference between a luxury item and an essential item? A smartphone 10 years ago was a luxury for just about everyone who owned one (that is, bought with extra money) now it's a requirement. The luxury purchase folks are certainly getting a better deal as apples:apples prices go down; but if you're paycheck to paycheck and used to be able to not buy a smartphone but now have to…

Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.

Hot water isn't essential either. Some of us prefer cold showers!

Re: Inflation Truthers

#39

Post by wing-_-nuts »

JoeAltmaier wrote: post #32
BlueTie wrote: post #30

Isn't this entire article missing the difference between a luxury item and an essential item? A smartphone 10 years ago was a luxury for just about everyone who owned one (that is, bought with extra money) now it's a requirement. The luxury purchase folks are certainly getting a better deal as apples:apples prices go down; but if you're paycheck to paycheck and used to be able to not buy a smartphone but now have to…

Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.

As much as people like to dump on smart phones; yes, they really are essential. My having access to news, music, books, podcasts in the palm of my hand is revolutionary. Literally any curiosity about any subject can be indulged at a whim. Social media might be toxic if you let it take over your time, but the benefits to society cannot be overstated.

Re: Inflation Truthers

#40

Post by rjmunro »

_Microft wrote: post #16

> https://awealthofcommonsense.com/wp-content/uploads/2021/01/... Also: the items in the category with decreasing prices are almost all automatically mass-producable and will have the advantage of learning (i.e. increased production efficiency and decreased cost with increasing number of items produced) while the ones in the other category aren’t necessarily. Childcare/nursery isn’t going to become cheaper just becau…

I'm not sure that college textbooks are written once. It depends on the subject, but they are often replaced frequently e.g. as technology or laws are updated, and each one makes only a small number of sales. Yes, printing costs are relatively low, but they are also a relatively small part of the cost of many kinds of book.
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