Food Prices Are Soaring Faster Than Inflation and Incomes • Hacker News Board

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#581

Post by carapace » Tue, Mar 09, 2021, 2:40 PM UTC

owenversteeg wrote: post #576

carapace wrote: post #406

Earlier quoted context omitted.

You have five dependents, stock up. In a crisis bad enough that your prudence and foresight significantly affects other people by depriving them of food you can give them some of your food. But in that situation you're probably done for already, and should have gone up in the hills, eh? John Titor said something that scared the shit out of me. Paraphrasing, it was something like, "If you want to survive, move to a pl…

"three days further out than a starving person can walk" sounds cool if you're posting fake apocalypse theories on the internet (aka John Titor), but is generally pretty terrible advice. First of all, there are an enormous amount of cars in America and there are roads nearly everywhere. The furthest spot from any road in the lower 48 US states is in Yellowstone, 21.7 miles from the closest road: https://www.bbc.com/n…

> "three days further out than a starving person can walk" sounds cool

It doesn't sound cool it sounds terrifying, for exactly the reasons you lay out.

> it's obvious what your best bet is - to simply live in a safe, sane and successful society.

Yeah it's obvious to me too. Do you know where I can find a planet like that? And a flying saucer to reach it?

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#582

Post by evrydayhustling » Tue, Mar 09, 2021, 2:59 PM UTC

leetcrew wrote: post #348

evrydayhustling wrote: post #273

Earlier quoted context omitted.

Disagree that this is alarmism. The question is whether the way inflation is being measured matches the way we use it to make decisions. Graphs like AEI's Chart of the Century [1] have been highlighting for years that inflation numbers are inappropriately averaging decreasing costs for discretionary purchases, while costs for essentials like healthcare and education grow out of control. When food also starts outpacin…

> When food also starts outpacing the average (historically it has paralleled wages in the USA), you really have to ask what inflation is measuring. inflation is measuring the value of a currency. CPI is a way to infer inflation from the nominal price of consumer goods; but it is not the definition of inflation. put another way, if an apple costs twice as much as it did last year, that fact is not enough to say wheth…

"the value of a currency" isn't a physical reality; it is only observed through price fluctuations. so, defining it this way is just kicking the can. The fact that you can measure very different values by focusing on Forex, labor costs, or various CPI baskets is exactly the concern with gaining too much comfort from any single-number summary in the face of price changes that are impacting daily life for millions.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#583

Post by pizzazzaro » Tue, Mar 09, 2021, 3:04 PM UTC

dominotw wrote: post #356

throwawaygh wrote: post #346

Earlier quoted context omitted.

> Avg income in my neighborhood is ~49k but a 2 bed condo here are selling for 450K and getting outbid by 75k over the asking price. Its insane. Sure, and your point about housing prices mattering is a good one (see my other comment on this story). But, this describes maybe a few dozen housing markets. Probably only a couple dozen if you cut out resort/ski towns. It's a regional problem, not systemic problem with the…

> But, this describes maybe a few dozen housing markets. Its a national problem https://www.redfin.com/us-housing-market 'few dozen' is what like 3 dozens? Assuming its a problem only in 36 markets. Wouldn't that be a 'national problem' ? 36 markets should covers a majority of population in the country.

Hint: ask anyone that lives overseas. Australia, Britain, France... anywhere without a Strong public housing subsidy:

This problem is Global, because our markets are global. The banks flipping houses for profit without so much as touching the keys? Compete with home owners to treat homes as an 'investment' of a 'commodity'.

In the US, there were 7 empty homes for each homeless person before the pandemic.

Less than 3% of the stock market now serves the actual economy of production. Might this be the culprit?

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#584

Post by evrydayhustling » Tue, Mar 09, 2021, 3:08 PM UTC

gruez wrote: post #330

evrydayhustling wrote: post #273

Earlier quoted context omitted.

Disagree that this is alarmism. The question is whether the way inflation is being measured matches the way we use it to make decisions. Graphs like AEI's Chart of the Century [1] have been highlighting for years that inflation numbers are inappropriately averaging decreasing costs for discretionary purchases, while costs for essentials like healthcare and education grow out of control. When food also starts outpacin…

> Graphs like AEI's Chart of the Century [1] have been highlighting for years that inflation numbers are inappropriately averaging decreasing costs for discretionary purchases, while costs for essentials like healthcare and education grow out of control. To be fair, three out of the seven categories that are under inflation can also be considered "essential". Imagine the outrage if cars (or more generally, transport)…

yeah, i don't love my discretionary/essential breakdown there. it's more about the combo of essential + non-exchangeability -- you need a car but there are a lot of options, but when you need a hospital there's usually one best place. (and education is non-exchangeable due to competitiveness).

the other big correlate is just goods vs services (even textbooks are service-like due to editions). I am not an economist but I'm really curious whether rapid depreciation caused by planned obsolescence of e.g. consumer electronics is causing a poor measurement of price trends in that area. Today's iPhone will cost much less next year, but the cost of maintaining a cutting-edge smart phone keeps going up.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#585

Post by evrydayhustling » Tue, Mar 09, 2021, 3:20 PM UTC

bradleyjg wrote: post #282

evrydayhustling wrote: post #273

Earlier quoted context omitted.

Disagree that this is alarmism. The question is whether the way inflation is being measured matches the way we use it to make decisions. Graphs like AEI's Chart of the Century [1] have been highlighting for years that inflation numbers are inappropriately averaging decreasing costs for discretionary purchases, while costs for essentials like healthcare and education grow out of control. When food also starts outpacin…

Education and healthcare have pathological cost growth in large part because they aren’t subject to ordinary market pressures (the consumers are either over a barrel and can’t say no or aren’t paying in the first place). We need to fix them but it would be a mistake to let those pathologies drive monetary policy.

I don't have many proactive opinions about monetary policy, but it's worth noting that health care and education together make up 25% of US dollar-valued GDP and significantly more than that of GDP growth. If their pathologies enable them to successfully suck up spare dollars, that is a meaningful hole in the bucket for efforts meant to impact other behaviors.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#586

Post by jerf » Tue, Mar 09, 2021, 4:09 PM UTC

sudosysgen wrote: post #402

jerf wrote: post #379

Earlier quoted context omitted.

It isn't just "capitalism", it's inherent to economics, period. One of the valuable lessons of studying differential equations is just how easy it is to have cyclic behavior appear. Anywhere you have a the size of a change in velocity that is the negative of how far the value is away from some baseline... in other words, the second derivative is negative... you almost certainly have a cycle of some sort showing up. (…

Economies do not necessarily have to follow differential equations with highly volatile second derivatives. In fact, historically, they haven't. This is only possible because of the volatility of capital markets that lead to even higher volatility in production which leads to volatility in general markets which leads to volatility in capital markets again - there is a loop of unstable prices. And this loop is the uni…

The USSR experienced all sorts of issues like this, where the central management would first over supply something, then react by massively undersupplying it, then overreact in the other direction. It also experienced a total collapse. It makes no sense to point to it as a model of stability.

(Also, as you read my message here, recall my claim isn't that communisms has cycles and capitalism doesn't, but everything does because there is no way to build an economic system that doesn't have -d^2/dt^2 terms showing up somewhere in it.)

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#587

Post by leetcrew » Tue, Mar 09, 2021, 4:31 PM UTC

evrydayhustling wrote: post #582

leetcrew wrote: post #348

Earlier quoted context omitted.

> When food also starts outpacing the average (historically it has paralleled wages in the USA), you really have to ask what inflation is measuring. inflation is measuring the value of a currency. CPI is a way to infer inflation from the nominal price of consumer goods; but it is not the definition of inflation. put another way, if an apple costs twice as much as it did last year, that fact is not enough to say wheth…

"the value of a currency" isn't a physical reality; it is only observed through price fluctuations. so, defining it this way is just kicking the can. The fact that you can measure very different values by focusing on Forex, labor costs, or various CPI baskets is exactly the concern with gaining too much comfort from any single-number summary in the face of price changes that are impacting daily life for millions.

I would consider the value of currency to be as real as the value of a software license, even though neither is a physical item per se. I guess that's somewhat philosophical.

my real point here is that nominal price increases do not necessarily imply inflation. if the price of one type of good is increasing much faster than the others, a better explanation is that the real value of those specific goods is increasing. does this matter to ordinary people buying food? not really. their main concern here is the nominal price of food compared to their nominal earnings.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#588

Post by whelming_wave » Tue, Mar 09, 2021, 6:51 PM UTC

frockington1 wrote: post #171

whelming_wave wrote: post #51

Earlier quoted context omitted.

that sounds like the general trend of wages in the US to not adjust upwards since Reagan’s presidency

The data does not support this, wages have been in the 2-4% rate for a while now. Seems tied to economic conditions rather than who is president. Source: https://www.epi.org/nominal-wage-tracker

The data does, really - on an off-hand search I found this[1], though I'm sure many more could be found. The US has trailed the rest of the world for decades on wage growth and income equality.

[1]: https://www.epi.org/publication/charting-wage-stagnation/

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#589

Post by jfengel » Tue, Mar 09, 2021, 8:21 PM UTC

novok wrote: post #558

em500 wrote: post #510

Earlier quoted context omitted.

The CPI includes shelter, food, energy, transport, education, medical care, clothing, recreation, and others, with weights that by and large make sense to me: https://www.bls.gov/cpi/tables/relative-importance/2020.htm What do you think is missing, or mis-weighted?

People constantly cite that CPI excludes things like housing costs, or if we probably dug into it more excludes stuff in strange ways. It's also probably a global thing, some countries do exclude it completely, others do not so it can confuse things: Ex: https://www.macrobusiness.com.au/2017/04/excluding-housing-c... http://www.chapwoodindex.org/

The CPI does include housing. And my citation for that is the Bureau of Labor Statistics, whose job is to put it together. Here is the document with excruciating detail:

https://www.bls.gov/cpi/tables/relative-importance/2020.htm

Housing is 42.385%, of which the shelter itself is 33.316%. The rest includes things like "Clocks, lamps, and decorator items" at 0.313%.

That's American data. Maybe the Australian data (your first link) really does exclude it, but the US most certainly does not.

If people think that the basket of goods is skewed, they need to justify that by comparing it against this list. The BLS makes a ton of data available, and it's unreasonable to claim otherwise.

Re: Food Prices Are Soaring Faster Than Inflation and Incomes

#590

Post by fennecfoxen » Tue, Mar 09, 2021, 9:43 PM UTC

abeyer wrote: post #485

sudosysgen wrote: post #403

Earlier quoted context omitted.

I'm not talking about the increase in value, I'm talking about housing expenses. There is/was a rent moratorium in the US, which would have reduced housing expenses in practice.

> There is/was a rent moratorium in the US But that's just not true. There may have been some small local/regional areas that did (not aware of any, but maybe...) and some individual landlords may have, but there was never a federal rent moratorium. What was done at the federal level was a temporary _eviction_ moratorium... but rents are still incurred and due (plus penalties and interest for late payments.) The rest…

The federal eviction moratorium has been overturned as unconstitutional, a court concluding "that the federal government's Article I power to regulate interstate commerce and enact laws necessary and proper to that end does not include the power to impose the challenged eviction moratorium." (Notice that Terkel vs CDC was a declaratory judgment on the constitutional question of the Commerce Clause, while earlier cases upholding the moratorium challenged it on the premise the CDC exceeded its authority, or that its use of that authority was an unlawful delegation of legislative power. Litigation will probably continue.)

If the government tried went beyond that to a rent moratorium, they'd definitely lose. It would be a "Law impairing the Obligation of Contracts," explicitly forbidden in the Constitution. Like, the original Constitution, not even an amendment: the Constitutional Convention forbade it even before they guaranteed the freedom of religion and of speech.