Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula • Hacker News Board

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#251

Post by ben_w » Sun, Apr 14, 2024, 6:34 AM UTC

TMWNN wrote: post #147

tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

>The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. "The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —Jeff Bezos https://sports.yahoo.com/amazon-ceo-jeff-bezo…

Huh, so that looks like a way to deal with Goodhart's law?

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#252

Post by impossiblefork » Sun, Apr 14, 2024, 6:38 AM UTC

nytesky wrote: post #70

tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

The “one income household” model of the 50s worked for two reasons. 1) the rest of the world was in ruins, so for 50s-60s US was sole industrial power more or less. 2) artificial labor “scarcity” where POC and women were banned from many occupations. The remaining available labor (ie white men) had more leverage.

The 1950s situation can be restored without introducing gender inequality or occupational bans though.

A four day work-week would bring us at least a little bit closer to the 1950s situation, and improve the leverage of workers.

4 x 2 > 5, of course, but 4 x 2 is still less than 5 x 2.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#253

Post by fragmede » Sun, Apr 14, 2024, 6:42 AM UTC

zeroonetwothree wrote: post #204

fragmede wrote: post #80

Earlier quoted context omitted.

What did a college education cost in 1960? I would gladly trade WFH to be the one person supporting a family of 6. (Me, partner, two kids, two grandparents.) The Internet's great and all (although sometimes it seems like it was a mistake), but we're so far from 1 very average person being able to support a middle class life style for 6 people. Median income in 1960 was $5,600, which is equivalent to $60,000 today, bu…

The standard of living today is immensely higher. If you wanted to live at 1960 level you could certainly afford to do so. You’d have 1,000 sq ft of house, a single unreliable car, almost never go out to eat or travel, etc.

Is it? sure we have the Internet and big TVs and fast cars, but how much time do we actually have to enjoy them? quality of life is measured in more than just the things you have. I mean, yeah, if you're getting Doordash every meal and spending all your money that way, that's on you. Trader Joe's is frigging great, imo. but eating at home and having an older car isn't going to get me to a place where one median American salary can comfortably support a meaningful amount of people.

this is after we decry the other ills of there 1960's, of racism and sexism, which hopefully it's obvious I don't want to go back to, but letting both parents work somehow became both parents need to work for middle America and I'm just tired of my friends living at the edge.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#254

Post by ben_w » Sun, Apr 14, 2024, 6:44 AM UTC

fragmede wrote: post #250

imnotlost wrote: post #224

Earlier quoted context omitted.

Ah, the 1850s when life was good! The US Post is great and all, but I would gladly trade the US post for a large beaver-hunting territory! Horses are too fast! Walking is better. Or whatever... come on!

so the tradeoff, for having to have both parents working for a very average family, is that they can surf the Internet and get Doordash? you come on. I'm not denying that we have a better quality of living today, but how much time do you have outside of weekends to just go fishing or whatever? all these labor saving devices were supposed to give us more leisure time but instead we're worrying harder than ever!

> instead we're worrying harder than ever

I was going to say this typo was accurate, but now I realise I've never actually seen a detailed analysis of how much people worried in the past, just confident claims it was so.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#255

Post by impossiblefork » Sun, Apr 14, 2024, 6:48 AM UTC

tossandthrow wrote: post #40

adriand wrote: post #33

Earlier quoted context omitted.

But it’s not like our standard of living has remained static while we need to work more. A lot has changed. In 1960 the average single family home was 1300 square feet, now it’s more than double that, and it’s packed with amazing amenities and entertainment options. What would an iPad cost in 1960? Obviously the question is kind of nonsensical and yet on the other hand, if you were to try and quantify the price of ou…

The main thing is, that I could actually support a household of 6 people on a single income if I was allowed to fix the comfort at the 60s level. 1. No flying on vacation and only simple camping as vacation 2. No technology: Computers, phone, television. Nothing, and no associated costs with subscriptions, etc. 3. Eat like it was the 60s, mainly potatoes (I am from Northern Europe). That said: I truly believe in the…

We were actually flying on vacation in the 1960s though.

My maternal grandfather was a school principal and his wife didn't need a job. They went to England and Spain on vacation.

We also of course absolutely loved potatoes. We still do.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#256

Post by jimkleiber » Sun, Apr 14, 2024, 6:49 AM UTC

tonymet wrote: post #106

randomdata wrote: post #41

Earlier quoted context omitted.

> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only . We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more…

Pick whatever word you like if "inflation" is reserved for economists because regular people are "just too dumb to understand". We need a concept for debasement / hidden tax that allows people to hold their policymakers accountable. My point is that CPI isn't it, it underestimates true inflation by 3-5x or more , and it interferes with good governance. If the govt wants money from the people, they need to tax them an…

For me, I'm not surprised inflation went up. We had a global lockdown during which some industries made a lot of money and some industries made little to no money. Once the lockdown ended, I assume the ones who made a lot started to lose sales and increased their prices to keep growing. I assume the ones who didn't make a lot of money started to increase sales again and probably increased their prices to recover the money they didn't make. I imagine both of them want to make sure they have enough money to survive another global crisis, especially the ones that almost didn't survive it.

So, yes, I think the government has a role in trying to limit inflation (and also increase wages), I just think that some inflation makes sense from those dynamics above.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#257

Post by mistermann » Sun, Apr 14, 2024, 6:49 AM UTC

ben_w wrote: post #244

latency-guy2 wrote: post #240

Earlier quoted context omitted.

So a strawman. You set up the premise, you set up your misunderstanding, and then expect everyone else to follow your misunderstanding. You've even redefined what a "fiscal conservative" would actually do (if you were the one defining it). Then you pulled in "libertarian" out of nowhere. Which is an obvious set up for another strawman, so lets lean into it. Whats a "libertarian"?

I have no skin in this because I don't live in the USA and don't want to, but no, everything in the comment you replied to falsifies "So a strawman". You can be wrong without being a strawman. When every example you have of X is Y, it's not a "strawman" to say "all X are Y" — when you're wrong like that, it's a black swan.

> You can be wrong without being a strawman.

Sometimes yes, but not always.

> but if every example you have of X is Y

Is that actually true though? Are you not assuming perfect rationality on behalf of the poster, and that they have an adequate sample size, which tends to be subject to who the individual associates with.

> it's not a "strawman" to say "all X are Y"

That depends on the truth of the matter.

>when you're wrong, it's a black swan.

Only if the initial guess was correct.

You may be describing appearances. That which cannot be seen does in fact exist, it just doesn't seem like it because it exists in a different realm, and how our culture is trained to think about such problems spaces.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#258

Post by mitthrowaway2 » Sun, Apr 14, 2024, 6:50 AM UTC

ethbr1 wrote: post #84

PKop wrote: post #64

Earlier quoted context omitted.

"inflation rate" is a nebulous thing. Interest expense and interest rates, concretely paid by people like any other expense is not any more nebulous than tracking other expenditures. We already know the interest rate and various categories of interest expense paid by population. It is just not included. Your rationale sounds very much like "we shouldn't include it because the inflation rate would be higher". There is…

> Your rationale sounds very much like "we shouldn't include it because the inflation rate would be higher". What is the CPI actually used for? To set various levers at the central bank level to manage inflation and keep the economy humming along. One of those levers is... the Fed funds rate... which in turn influences most other interest rates. So you'd be incorporating interest into the measurement used to set inte…

CPI is used for other things too, including contract negotiations and standard of living comparisons.

Anyway, recursive sums like that are nothing unusual; as long as the sum converges it's not a problem. Any negative feedback amplifier does the same thing.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#259

Post by EVa5I7bHFq9mnYK » Sun, Apr 14, 2024, 6:54 AM UTC

What is CPI used for? Mostly to index the Social Security payments, and, to a lesser effect, adjust tax brackets. Retirees don't use much credit, on the contrary, they benefit from higher borrowing rates, because they are those that lend money. So it makes sense that borrowing costs are not included in the CPI. Otherwise it would be double-tap for retirees - they get greater SS increases and greater income from safe investments.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#260

Post by imnotlost » Sun, Apr 14, 2024, 6:55 AM UTC

fragmede wrote: post #250

imnotlost wrote: post #224

Earlier quoted context omitted.

Ah, the 1850s when life was good! The US Post is great and all, but I would gladly trade the US post for a large beaver-hunting territory! Horses are too fast! Walking is better. Or whatever... come on!

so the tradeoff, for having to have both parents working for a very average family, is that they can surf the Internet and get Doordash? you come on. I'm not denying that we have a better quality of living today, but how much time do you have outside of weekends to just go fishing or whatever? all these labor saving devices were supposed to give us more leisure time but instead we're worrying harder than ever!

I understand, times are hard. Always were.

When was this chill time when we could just take off fishing for a week or two?

Random breakdown of time :) * 1800s * 1900-WW1 * WW1-WW2 * WW2-1980 * 1980-Now

And yeah, single breadwinner households were a thing back in the day it was generally because women didn't have a choice at all.

I'm pretty sure you have more options and choice today as to how you want to live your life, but if you want a family you gotta feed the little bastards one way or another, that has always been a "worry".