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

#391

Post by tonymet » Sun, Apr 14, 2024, 7:12 PM 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…

Very good quote. “Data” is not conclusive , it’s just one piece of evidence. Usually it’s a noisy observation , with even noisier statistics applied.

People think “data” is the conclusion, when in fact it’s just a signal to ask more questions.

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

#392

Post by water_556 » Sun, Apr 14, 2024, 7:17 PM UTC

exe34 wrote: post #310

TeMPOraL wrote: post #269

Earlier quoted context omitted.

That's missing forest for the trees. The more important part is that average 3.7 people household was a single-income one . I would rather disagree with GP's: > My point is that inflation isn’t abstract and it isn’t a law of nature. It’s a deliberate approach to stealing your prosperity while you cheer it on. A lot of the inflation, including how suddenly a single-income household isn't a viable option for most peopl…

It's not the market that's eating the "surplus". Economic inequality is at an all time high. Big corporations are posting record-busting profits. Inflation is driven by greedflation, mostly.

Cops have been greedy and tried to extract max cash always, its just now people pay it

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

#393

Post by ben_w » Sun, Apr 14, 2024, 7:19 PM UTC

latency-guy2 wrote: post #389

ben_w wrote: post #244

Earlier quoted context omitted.

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.

> everything in the comment you replied to falsifies "So a strawman". No it doesn't, user exclaims their ignorance and your follow up emboldens their ignorance does not make a QED.

Does your understanding of reasoning consist solely of the dichotomy "every position is either a QED or a strawman"?

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

#394

Post by rayiner » Sun, Apr 14, 2024, 7:40 PM UTC

dwallin wrote: post #382

fvvybfbfbyg wrote: post #328

Earlier quoted context omitted.

> or the Scandinavian countries that generally have higher spending power than the us. Do they? PPP they all have lower disposable income than the US and they are not even at the top in Europe (including social transfers). Germany, Switzerland, Austria and the Netherlands are above Norway and Sweden is even lower than France.

Of course we have higher Disposable Income in the US, it's a useless metric for these sorts of comparison purposes as it includes expenditures for things like healthcare, which in most other places is paid for by taxes (aka. not part of disposable income). A more useful metric would be Discretionary Income.

The OECD economists are pretty smart cookies, and account for government services delivered in kind (like healthcare). The net adjusted household disposable income includes the value of government provided healthcare: https://www.oecdbetterlifeindex.org/topics/income/ (“Household adjusted disposable income includes income from economic activity (wages and salaries; profits of self-employed business owners), property income (dividends, interests and rents), social benefits in cash (retirement pensions, unemployment benefits, family allowances, basic income support, etc.), and social transfers in kind (goods and services such as health care, education and housing, received either free of charge or at reduced prices).”) So the income top line in European countries is higher than the actual income to account for the value of those services.

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

#395

Post by Dylan16807 » Sun, Apr 14, 2024, 7:46 PM UTC

wakawaka28 wrote: post #355

Dylan16807 wrote: post #347

Earlier quoted context omitted.

> It's not like they are necessarily screwing you over if they don't give you a 30% raise Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. > That's not a profit dude. It's the simple phenomenon of everything costing more. Since most businesses are hurt by inflation, stocks do not keep up with rapid inflation. It wouldn't have…

>Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. If you're supposed to be getting raises anyway, how much of your raise is due to inflation and how much is due to advancement? I am making more money than I did before the pandemic but that was almost 4 years of grinding to reach that point. All indications I've seen point to…

> Your point was precisely that "gains" in the stock market make up for other downsides of inflation.

Nah, just saying it can reduce the damage.

> You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting screwed due to inflation is terrible for the economy.

I was covering all the bases. If you don't have significant savings, then losing 30% of negligible is also negligible. And the most common situations that involve savings/debt have gone in the favor of individuals.

It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually.

> Sorry but stocks are supposed to profit. In real terms there is probably a slight profit.

Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit.

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

#396

Post by jpgvm » Sun, Apr 14, 2024, 7:53 PM UTC

silverquiet wrote: post #313

MathMonkeyMan wrote: post #263

Earlier quoted context omitted.

I saw an interview where Bill quipped "You know how we balanced the budget? We used a little thing called 'arithmetic'."

That one of the two American political parties believes they can lower the deficit by cutting taxes (primarily for the wealthy but that's immaterial to the basic math here) has always created some sense of unreality for me; I really no longer understand what the goal is for many of these people and I often think that they don't really know either. It's almost pure nihilism except when it comes to lust for power.

It's much less deep then nihilism.

Their goal is simply to live their life as richly as they can at the expense of those they consider less than themselves. They are the wealthy and they act accordingly.

Why anyone sees Republicans as anything else boggles my mind.

Anyone who isn't a billionaire and is voting Republican may as well be a turkey voting for Thanksgiving.

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

#397

Post by cyanydeez » Sun, Apr 14, 2024, 7:56 PM UTC

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…

I believe in 1963, black people were still second class citizens.

Hard to believe this example is worth it's weight in freedom units per capitalist product.

The reality is the economy and government were weaponized to enforce the lost of freedom to discriminate.

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

#398

Post by Terr_ » Sun, Apr 14, 2024, 8:38 PM UTC

gumby wrote: post #241

bongodongobob wrote: post #203

Earlier quoted context omitted.

"Fiscal conservativism" is the equivalent of a household not purchasing any insurance, not going to the doctor or dentist, and saying "look how affordable everything is if we cut out all those stupid things? It's wasteful spending!" Then you get into a car accident, go to the hospital, lose your job, and cry about the inefficiency of the market because you now have a huge bill that you can't pay. It's short sighted a…

Woah, you sound like Adam Smith (the real one, not the one worshipped by alleged acolytes who clearly never read a word he wrote).

I often like to observe that there is capitalism and then there is Capitalism with a an uppercase--dare I say "capital"--letter C.

The first is a kind of economic engineering with trade-offs and conditions and acknowledged edge-cases, the second is a brand supported by some rather culty dogma.

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

#399

Post by wakawaka28 » Sun, Apr 14, 2024, 9:04 PM UTC

Dylan16807 wrote: post #395

wakawaka28 wrote: post #355

Earlier quoted context omitted.

>Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. If you're supposed to be getting raises anyway, how much of your raise is due to inflation and how much is due to advancement? I am making more money than I did before the pandemic but that was almost 4 years of grinding to reach that point. All indications I've seen point to…

> Your point was precisely that "gains" in the stock market make up for other downsides of inflation. Nah, just saying it can reduce the damage. > You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting scre…

>Nah, just saying it can reduce the damage.

Increased nominal value of assets doesn't reduce any damage actually. It just means that maybe you lost a smaller portion of your net worth than you would have otherwise.

>It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually.

While some businesses may be able to psych people out with an unnecessary price hike, it doesn't actually help anything.

>Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit.

No, there is no profit from inflation. The numbers are just getting bigger. There is one actual way to profit from inflation, and that is to borrow money and buy valuable stuff, then repay the loan with less valuable dollars.

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

#400

Post by robocat » Sun, Apr 14, 2024, 9:04 PM UTC

leereeves wrote: post #331

robocat wrote: post #305

Earlier quoted context omitted.

> interest rates are a factor in affordability and cost Paradoxically over a long term, interest rates don't affect house affordability much. People bid on houses at the limit of what they can spend - the constraint is their income not the interest rate. As interest rates fall, people pay the same interest payments but bid higher on the house price (driving house prices up). As interest rates rise, people spend the s…

That doesn't seem to be true now. Home prices have risen despite higher interest rates.

That is irrelevant to what I wrote.

If interest rates remain the same for a longer period then houses must sell for a price where people can pay their mortgages.

Household income is a hard constraint. People can't pay more for interest payments than they earn.

House prices can still rise if:

• people can pay more on interest e.g. reduce their spending in other areas e.g. increase income using overtime. e.g. rent or AirBnB rooms.

• Or if they can lower mortgage interest costs by increasing deposits/equity e.g. sell down other investments, or borrow from friends/family e.g. downsize house.

• Or if more wealthy people move into the area

And it is a market - I am talking about how individuals drive the market price but obviously the price is set by successful sales and purchases. There is a lot of unmet demand by people who can't quite afford a deposit/mortgage.