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The true costs of inflation in small-town Texas

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Re: The true costs of inflation in small-town Texas

#111

Post by lend000 »

missedthecue wrote: post #105
lend000 wrote: post #102

Earlier quoted context omitted.

CPI has been engineered to meet targets for a long time. Several major flaws with CPI: Hedonic adjustments are more or less at the mercy of the bureaucrats. For example, new vehicles did not go up in hedonic-adjusted price from 1997 to 2020 according to the BLS [0]. The justification is that new cars have bluetooth and other features that counter-act the price change. An automatic Toyota Corolla was $12373 brand new…

I agree in general about the hedonic adjustments and their potential for manipulation or miscalculation. But automobiles are probably the worst example! Toyota didn't even roll out passenger side airbags until 1998. Only the driver had them prior to this. The new Corolla has 8 airbags. Today we have better fuel efficiency, collision protection, driver assistance, remote start... Even the seats are more comfortable. N…

But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheaper to own a car. Hedonic adjustments make sense in theory, but in practice it's a loophole to make inflation whatever the government wants it to be. In the case of vehicles, they clearly went overboard. The counterargument to hedonic adjustments is that almost everything should become cheaper over time, including all vehicle parts and assembly, due to technological progress in manufacturing. I don't think it's unreasonable to assume hedonic adjustments should cancel out increases in manufacturing technology and just ignore them both, probably resulting in a simpler AND more accurate CPI.

Re: The true costs of inflation in small-town Texas

#112

Post by jason-phillips »

gnicholas wrote: post #95
jason-phillips wrote: post #83

For context, I live in San Saba and Lampasas, TX. San Saba is located two hours northwest of Austin where the population density is three people per square mile. While there is truth to the story about inflation hitting rural, poorer areas the hardest, this gentleman's quotes are a but of a stretch. > Brisket went from one sixty-nine a pound to seven Brisket has not been $1.69 for years, unless this gentleman has som…

> It seems that this person is saying we could lose BBQ in all 254 counties in Texas? That's unmitigated hyperbole and balderdash. I interpreted this to mean that BBQ is available in all of the counties in TX, and that may no longer be true in the future, since some rural counties may lose their last BBQ joint.

I would like to know which they are. I just don't see that as a thing that can happen.

If you think a Texas county may lose their BBQ producing capacity, please let me know as this would be most newsworthy and also deserving of every Texans' help.

Re: The true costs of inflation in small-town Texas

#113

Post by sofixa »

toomuchtodo wrote: post #29
kart23 wrote: post #26

Earlier quoted context omitted.

fake meats are overly processed, and probably more expensive too. real chicken has far more protein and is better digested than fake meat. from a nutrition standpoint, the real thing is much better.

True, but so is less of it. “Western Diet” is a real malady at scale. https://en.wikipedia.org/wiki/Western_pattern_diet

I skimmed the Wiki article but it seems incredibly US, maybe North America focused. Examples and data were American, and none of it is applicable to Western European countries I'm familiar with. Not that nobody drinks sugary drinks or nobody eats red meat or hamburgers, but they're much less of staples and processed foods are much rarer.

So what's with so many people abusing "Western" to mean American and maybe Canadian?

Re: The true costs of inflation in small-town Texas

#114

Post by once_inc »

chomp wrote: post #66
nostromo wrote: post #51

I’ve seen some people showing actual price increases they’ve seen in their local communities. For a lot of folks it’s much higher than is being reported. Here’s one from a person in Seattle: https://preview.redd.it/max54wqv9kb91.png?width=1112&format=...

I'm super skeptical of posts like this because they seem cherry picked, or at best, have local price increases that aren't reflected elsewhere in the country. Half of those are restaurants, who have had challenges for the past 2 years outside of inflation. Gas has its own challenges, a head of lettuce at my local grocer is $1.52 which is cheaper than that person's 2021 price. Notably not included in that post is thin…

The term "Inflation" is used in two forms interchangeably by most people, and this leads to miscommunication. Inflation is used for:

(a) price inflation: increasing prices for individual goods.

(b) monetary inflation: an increase in the amount of money used.

Both types of inflation means you get less goods for the same amount of (in this instance) Dollars. Monetary inflation (b) is mostly created by central banks and commercial banks, who increase the amount of dollars via Quantitative Easing, or fractional reserve banking. Price inflation (a) is the effect of markets reacting to changes in supplies and macro trends.

Price inflation isn't even over all products, and products generally fall into three categories: deflationary goods, stable goods, and inflationary goods. Deflationary goods have traditionally been electronics like televisions. Innovation in these areas drives down prices for products hard. Stable goods are products like lumber, food, or oil. Inflationary goods are often luxury brand items like Gucci bags, or yachts.

What is noticeable now is a marked increase in price inflation for stable goods. The source of this inflation is usually one of the following:

1. Supply-side issues (Chinese harbours closed because of Corona outbreaks, the issue with meat as discussed in the article)

2. ESG goals driving up energy prices (which affect production costs and prices for fertiliser. A good example of this is Sri Lanka)

3. International sanctions against Russia (further increasing the cost for fertiliser and increasing the price of energy for the western European market).

Re: The true costs of inflation in small-town Texas

#116

Post by imtringued »

leereeves wrote: post #108
chomp wrote: post #88

Earlier quoted context omitted.

If you or your wife look at the past and current price of lettuce in the local store and then use that to make the conclusion that the purchasing power of the US Dollar has decreased 47%, then I don't know what to tell you. Your cost of living may have increased, but I do not understand how you can conclude an increase in inflation from living your daily life.

I know that my total grocery bill (not just lettuce) has more than doubled in the past few years. Gas too. "The purchasing power of the US Dollar has decreased 47%" sounds about right.

A company selling a product I frequently buy went out of business, the purchasing power of the USD has decreased by 100%.

Re: The true costs of inflation in small-town Texas

#117

Post by konschubert »

once_inc wrote: post #114
chomp wrote: post #66

Earlier quoted context omitted.

I'm super skeptical of posts like this because they seem cherry picked, or at best, have local price increases that aren't reflected elsewhere in the country. Half of those are restaurants, who have had challenges for the past 2 years outside of inflation. Gas has its own challenges, a head of lettuce at my local grocer is $1.52 which is cheaper than that person's 2021 price. Notably not included in that post is thin…

The term "Inflation" is used in two forms interchangeably by most people, and this leads to miscommunication. Inflation is used for: (a) price inflation: increasing prices for individual goods. (b) monetary inflation: an increase in the amount of money used. Both types of inflation means you get less goods for the same amount of (in this instance) Dollars. Monetary inflation (b) is mostly created by central banks and…

Inflation is when the ratio of / grows.

This can happen by the numerator growing (your (a)) or the denominator shrinking (your (b)).

Re: The true costs of inflation in small-town Texas

#118

Post by konschubert »

once_inc wrote: post #114
chomp wrote: post #66

Earlier quoted context omitted.

I'm super skeptical of posts like this because they seem cherry picked, or at best, have local price increases that aren't reflected elsewhere in the country. Half of those are restaurants, who have had challenges for the past 2 years outside of inflation. Gas has its own challenges, a head of lettuce at my local grocer is $1.52 which is cheaper than that person's 2021 price. Notably not included in that post is thin…

The term "Inflation" is used in two forms interchangeably by most people, and this leads to miscommunication. Inflation is used for: (a) price inflation: increasing prices for individual goods. (b) monetary inflation: an increase in the amount of money used. Both types of inflation means you get less goods for the same amount of (in this instance) Dollars. Monetary inflation (b) is mostly created by central banks and…

Let me add to your list:

4. Russia artificially limiting the Gas supply to freak out the Europeans.

5. Russia preventing wheat and corn feed from being exported out of Ukraine, forcing it to rot.

Re: The true costs of inflation in small-town Texas

#119

Post by imtringued »

tyingq wrote: post #72
gruez wrote: post #58

Earlier quoted context omitted.

That seems massively susceptible to sampling bias. eg. are you really reporting all of your costs, or only the costs that you noticed going up? Meanwhile BLS provides regional CPI numbers[1], which puts "Seattle-Tacoma-Bellevue WA" inflation at 10.1% between Jun 2021 and Jun 2022. https://www.bls.gov/regions/west/factsheet/consumer-price-in...

The CPI is well thought out, though it's possible that their choices on weighting don't match your own spend. Some detail here: https://www.bls.gov/cpi/tables/relative-importance/2021.htm

People don't seem to grasp that 9% inflation is extremely high across an economy as large as the US. The 70s had 15% inflation, everyone with their rage boner demanding 50% inflation in the CPI wants ridiculous reports of hyperinflation.

Re: The true costs of inflation in small-town Texas

#120

Post by californical »

lend000 wrote: post #102
gruez wrote: post #58

Earlier quoted context omitted.

That seems massively susceptible to sampling bias. eg. are you really reporting all of your costs, or only the costs that you noticed going up? Meanwhile BLS provides regional CPI numbers[1], which puts "Seattle-Tacoma-Bellevue WA" inflation at 10.1% between Jun 2021 and Jun 2022. https://www.bls.gov/regions/west/factsheet/consumer-price-in...

CPI has been engineered to meet targets for a long time. Several major flaws with CPI: Hedonic adjustments are more or less at the mercy of the bureaucrats. For example, new vehicles did not go up in hedonic-adjusted price from 1997 to 2020 according to the BLS [0]. The justification is that new cars have bluetooth and other features that counter-act the price change. An automatic Toyota Corolla was $12373 brand new…

> the survey evaluates the median spending of a sample of Americans, but the median American spends pretty much all of their money.

I feel like this is relevant. If you already don’t save anything, then your spending power decreases drastically over a year or two, you still spend all of your money but just buy fewer of the nonessential or “nicer” things.

So CPI adjusts and assumes that “this is normal spending now”, but really there was no flexibility in someone’s spending anyways.

They would’ve kept buying more if they could, but now their quality of life has decreased but CPI treats it as if the product has improved & they don’t need as much anymore (even as a QOL increase).

Am I understanding this correctly?

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