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

forbes.com

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

#451

Post by Phiwise_ »

worstspotgain wrote: post #116
Phiwise_ wrote: post #111

Earlier quoted context omitted.

>Beware any election-year stories that just happen to elicit a deep sense of things being astray. Larry Summers in particular has a long track record of playing complex angles in his public policy views. The technical argument in the paper is totally separate from the headline here. The headline is what matters. ... The null hypothesis is that the inflation wave came and went. You won't find a credible economist that…

I didn't characterize his data or the technical argument in the paper at all. I characterized the disingenuous headline, and emphasized the distinction.

It's good to hear that's what you wanted to do, but I think a case can be made that your comment does not read that way.

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

#452

Post by bryanlarsen »

Phiwise_ wrote: post #450
bryanlarsen wrote: post #433

Earlier quoted context omitted.

Bad facts are not useful. The article compares the consumer sentiment index from the 80s with today's. That's a made up number, only relevant for short term relative comparisons. Long term absolute comparisons have little value. What's the Y axis on that?

That's more than a bit of a word salad so I'm just going to leave this for you to read: https://imageio.forbes.com/specials-images/imageserve/65fec8...

The experienced inflation is the area under the spike in that graph. And the area is approximately way larger in the 80's spike. Above 7% for a decade versus 2 for the current spike. And just like interest, that compounds over time.

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

#453

Post by seec »

zarzavat wrote: post #317
ta1243 wrote: post #293

Earlier quoted context omitted.

Far more divorced now too, so more demand on housing, and more people want to live in cities than in the 1960s, leading to even more demand. It all comes down to the cost of housing, at least in the UK where housing has been ridiculous for over 20 years. That housing is driven up to soak all available income by artificially constrained supply. All available income has increased on a household basis because of egalita…

We’ve replaced a world in which women are forced to stay at home with a world where women are forced to work until 70 (or whatever the retirement age is in your country). Great if you’re an exec or have some mentally stimulating job, but for the typical woman it means stacking shelves until your back gives out. What an achievement for society.

I personally think the "forced" part is mostly bullshit. It was the default arrangement but far from the only one. In fact, when you read some historical without the feminist propaganda bias it becomes very obvious that it was mostly a desirable position for women.

It seems to me that the whole equality propaganda mostly comes from less desirable women who would have a much harder time finding a highly valuable man that would be able to bring a lot to the home (either in the way of money or skills, craftmanship, etc). They wrongly determined it would be better for them if they could be like a man. But reality doesn't care much about feelings and what happens is that those women still get the less desirable man and if they go at it solo, they find out the hard way that there are many things a man provide that are very costly if you have to pay for it in the market. One thing too often overlooked is the importance of a man in children upbringing and there are some nasty statistics about single women raising kids that pretty much depict that very painfully.

In the end it doesn't matter, everybody's got much poorer for it, the only winners are the bourgeois women who started it all, who already had a lot of power in the first place. But I guess it was the intended result even if it came at the expense of all the lower social class...

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

#454

Post by Slava_Propanei »

paulryanrogers wrote: post #408
rafaelero wrote: post #351

Earlier quoted context omitted.

I agree. But what does it have to do with your rant about women particularly getting a worse deal?

Not my rant. Regardless, my point is that one cannot say that the cost of equality must always or only be housing requiring dual income or shitty working life/hours.

[dead]

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

#455

Post by Slava_Propanei »

MisterBastahrd wrote: post #199
voisin wrote: post #178

Earlier quoted context omitted.

> There is no fiscal conservative left in America. Truer words have never been spoken. Fiscal conservatism died with Reagan.

In what way was Reagan a fiscal conservative other than making the poor targets for pain? He destroyed half the social safety net in this country while running on a hideously bigoted platform and STILL ended up spending an insane amount of money compared to his predecessors. The only fiscal conservative of the past 50 years in the White House was Bill Clinton.

[dead]

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

#456

Post by Phiwise_ »

bryanlarsen wrote: post #452
Phiwise_ wrote: post #450

Earlier quoted context omitted.

That's more than a bit of a word salad so I'm just going to leave this for you to read: https://imageio.forbes.com/specials-images/imageserve/65fec8...

The experienced inflation is the area under the spike in that graph. And the area is approximately way larger in the 80's spike. Above 7% for a decade versus 2 for the current spike. And just like interest, that compounds over time.

Oh, this got even worse than I expected. Let me show you another graph, then. This is FRED's official price index, which is the source of the blue inflation line in that graphic. I've overlayed two red lines for its value in the eleven years from Aug 1972 to Aug 1983, plus two orange lines comparing its value now (Mar 2024) to Mar 2013, also eleven years. Notice how the gap between the red lines is a price rise of $58.2 on a 1982/84 $100 basket, while the gap between the red lines is a rise $79.948, which is significantly higher: https://fred.stlouisfed.org/graph/?graph_id=1327450

Now imagine how much worse this would get if we did these calculations with the yellow line data instead, which is essentially the same in the 70-80s but much worse today. (Or maybe also imagine how much worse the past ten years could be five years from now if we got a second inflationary spike like the 70s-80 did, making this a more apples to apples comparison!)

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

#457

Post by [deleted] »

jpgvm wrote: post #396
silverquiet wrote: post #313

Earlier quoted context omitted.

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.

[deleted]

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

#458

Post by bryanlarsen »

Phiwise_ wrote: post #456
bryanlarsen wrote: post #452

Earlier quoted context omitted.

The experienced inflation is the area under the spike in that graph. And the area is approximately way larger in the 80's spike. Above 7% for a decade versus 2 for the current spike. And just like interest, that compounds over time.

Oh, this got even worse than I expected. Let me show you another graph, then. This is FRED's official price index, which is the source of the blue inflation line in that graphic. I've overlayed two red lines for its value in the eleven years from Aug 1972 to Aug 1983, plus two orange lines comparing its value now (Mar 2024) to Mar 2013, also eleven years. Notice how the gap between the red lines is a price rise of $5…

Average of 10% inflation for ten years and the magic of compounding means that prices were up 2.5X in that decade.

Did prices almost triple in the last ten years?

It doesn't matter whether you count the CPI that double counts interest or not.

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

#459

Post by Valakas_ »

randomdata wrote: post #41
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…

> 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…

>On that note, houses are unquestionably more valuable today.

No. They are better, not necessarily more valuable.

Simple example:

Today you can get a phone with a chip more powerful than the best supercomputers 50 years ago. Is today's chip more valuable (ie. price-value) than that supercomputer? No. An equivalent supercomputer back then would cost WAY more. You're bringing other variables into play and confusing things. Technology has improved, manufacturing costs have gone WAY down for higher quality products. The fact that we can get higher quality things nowadays has little to do with purchasing power and everything to do with science and technology. The fact we can afford a better quality house nowadays, is also much more related to material improvements, manufacturing, logistics, overall system efficiency (transportation, company competition,...) improvements than purchasing power.

What we can compare is what other poster's are doing: time vs functions. For example, working time needed to have an average place to live in by the time's standards. And if you do that, you'll see today it requires A LOT more working time.

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

#460

Post by worstspotgain »

Phiwise_ wrote: post #451
worstspotgain wrote: post #116

Earlier quoted context omitted.

I didn't characterize his data or the technical argument in the paper at all. I characterized the disingenuous headline, and emphasized the distinction.

It's good to hear that's what you wanted to do, but I think a case can be made that your comment does not read that way.

Fair enough, in the struggle to avoid a WoT I implied some stuff. For clarification, insert the following paragraph after "The headline is what matters:"

The headline incidentally fosters the view that inflation is still a major problem, which many people hold. It reinforces their gut feeling that it's been much higher than reported, and by extension, that the reported end of the wave is untrue. As inflation and the smell of conspiracy rise to top-of-mind, they ignite blame against the current administration. The truth is that the inflation wave is essentially gone, and that the administration cannot be blamed for it in the first place.

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