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20.2%
It’s O-fficial. Since Biden/Harris took office, the official inflation gauge is up over 20%. 20.2% to be precise. The just-released numbers for October were up 2.6%. That increase is in line with the acceleration of the money supply.
That means regular Americans are farther behind than my last estimate.
Biden/Harris
Earnings +18.5%
Inflation + 20.2%
Net Loss – 1.7%
Regular Americans did better under Trump than under Obama and MUCH better than they are under Biden/Harris.
And the official inflation numbers are calculated differently than they were in the past. The methods were changed in the 1980s to make the official numbers smaller than they’d otherwise be.
The CPI used to measure a fixed market basket of goods and services. It used to measure the cost of maintaining a constant standard of living. No more. Now, if, for example, steak gets more expensive, the boffins at BLS decrease the amount of steak in the market basket and substitute less expensive chicken. While this method reflects actual consumer behavior in the market, it dilutes CPI’s usefulness. Including substitutions means that CPI is now an amalgam of both price changes and standard of living changes. During periods of high inflation, prices go up, AND because of substitutions, the relative standard of living declines. Yet the standard of living portion is obscured and not readily visible.
How big of a difference are we talking about? It’s big. For instance, back in 2022, when the official inflation number was 9%, calculating things the old way would have given an inflation rate of almost 17%.
So when the “feel good” adjusted number is over 20% you know things are bad.
Published in General
Clearly it is time for one last revision to rebut this. Drop items from the CPI survey with the highest price rise, rejigger the time frame, apply a new adjustment figure and voila!
Maybe Harris could have won if Biden had sent FBI SWAT teams to seize and perp-walk some local grocery chain store managers before the cameras in a multi-state raid on price-fixing of eggs and Rice Crispies thus sending a message to CEOs of Big Food. Liz Warren, Joy Reid and AOC would have applauded.
Wow.
Is there someone out there who tracks all this via both methods over time? That would be an interesting graph…
ouch. That’s gonna leave a mark. I was predicting 25% from the Biden war on Energy. Let’s see if Trump can get -10% for his third term.
More Growth. Less Spending. No Duh.
There needs to be more efficiency to lower prices. Our economy is filled with all kinds of imposed inefficiencies. For example, income tax compliance is $400 Billion/year. We put about $1 Trillion/year into college education, surely half of that wasted. We spend about $5 Trillion on medical stuff, surely 25% of that is wasted–probably 50%. Note, GDP might fall as wages for productive workers go up.
A site called “Shadow Government Statistics” has something. I note that most of the stuff is subscriber-only, but this is not: https://www.shadowstats.com/alternate_data/inflation-charts
Screenshot:
My retirement accounts have largely recovered in the last year, until inflation is factored in. Then there is no growth since Biden was elected.
20% is bogus. Just going to the grocery stores, I see many items are 50% to 100% higher in price, sometimes more.
They cook the books from the very start, by deciding what to include or not include; and then they can do “substitutions” and such.
ouch. beating inflation is important.
True and they attempt to measure quality differences, but that is real life. My budget for postage stamps is way down and while my cost of streaming services is up the 15 years.
I assume most everyone saw through this fallacy immediately.
CPI is a measure of overall prices. Obviously, virtually no individual price will be equal to the aggregate—prices changes follow a statistical distribution, with some higher, some lower, by a little or a lot.
I am more concerned that people will accept this charge uncritically. Before deciding the question, ‘Were product selections and substitutions, and their respective weights, falsified to get a desired result?’ I hope at least a few Ricocheteers will do the research necessary to understand the subject of price indexes—which is very complex— and then get the facts.
If you are new to the subject of price indexes, you will be surprised how complex and nuanced a subject it is. You will get the pleasure (or pain, depending on your levels of intellectual curiosity and humility) of discovering that you actually know nothing about a subject that you thought you understood perfectly well :-)
For example, there is no single objective way to choose between the two main approaches to deciding how to calculate a price index under any realistic assumptions about the data at a point in time, even in theory.
The science of price indices is indeed complex, but that doesn’t mean that the current index isn’t bunk.
Indeed, it’s more likely to mean that it IS bunk.
Please don’t hear what I’m not saying.
I never suggested that the fact that the subject is complex implies that the index is bunk. I never even said that it isn’t bunk! I’m just saying, analyze the question rationally, not emotionally.
I am saying that kedavis may have simply pulled an accusation of deliberate deception out of his hat—he presented no argument and no facts. I am encouraging others to understand the subject, and then get the facts, and then decide.
Perhaps you will conclude that the intent to deceive is the predominant factor in the changes in methodology and execution. But perhaps you will come to a different conclusion, once you escape the intellectual prison of black-and-white thinking which ignorance tends to confine you to.
What then is the relevance of the complexity to my point, if it doesn’t disprove kedavis’s point?
Simply this: you have to understand the subject before you can understand what the facts tell you about the plausibility of the accusation, and the subject is more complex than you think it is. For example, there are multiple, equally legitimate theoretical definitions of “inflation”, each of which gives you different information, to the degree that you are able to measure it accurately, repeatably, on time, and within budget.
The point is, that the index is what it is. There are actually many indexes and you should use them all with caution. The Democrats are the worst, when it comes to manipulating common economic data.
An index is an attempt to reduce a complex set of data as a single number. It is, in effect, a model of that data. British statistician George Box wrote “All models are wrong, but some are useful.” You’ll never get a perfect model, but “close enough” can be of benefit.
DonG said the main thing that I was trying to say better than I did. Thanks, Don.
(But he was not able to use so many words.)
If only the government models were “close enough.”
For years I have thought about this. If they are going to force us to use government money, which they do, and then they are going to force a supposed inflation rate, they should put up at least 36 different measurements of it in Times Square. The idea that there is only one number is preposterous.
The reason you have government money is because it gives us geopolitical advantages. They don’t manage it well at all.
It’s about being in a position to make war. The perfect situation is private money and no hostility in the world. The problem is anybody can set up a central bank anytime they feel like it and start screwing with people. Central Banks should do one thing: back up the fractional reserve banking system at a penalty rate.
They try to manage inflation with interest rates too much. We need a libertarian economy.
This comports with my personal experience. I use one credit card for everything outside of rent and it is destroyed monthly. It feels like it’s 40%.
Everything that everybody does (EXCEPT THE POOR AND THE MIDDLE CLASS) is asset based instead of income based. The Fed keeps hoping for the wealth effect. Everything should be about incomes and profits not asset prices FOR EVERYONE. It’s insanity.
Exactly. If they are going to force inflation, there should be 36 indexes published in Times Square.
The union at the ports is against automation, otherwise known as deflation, which everybody but the port workers benefit from
https://www.foxbusiness.com/economy/dockworkers-union-walks-away-from-negotiations-east-gulf-coast-employers
Deflation is the natural state of the economy. This requires full reserve banking instead of fractional reserve banking.
Since we started trading with the Chinese mafia, they are buying weapons with it so we can’t switch to deflation.
Good luck everybody.
It’s a scam to promote big government and the 1% ripping us all off.
The problem is you can’t have a certain amount of geopolitical power unless you have a central bank constantly creating inflation. We have to do this because the Chinese mafia want to make war.m
foRCInG uS tO uSE goVErNmENt moNEy mAKes ouR lIvEs betTEr
I couldn’t agree more! I estimate that most grocery items that I buy have gone up anywhere between 50 – 100 %. For instance, both Friskies and 9-Lives cat food have both doubled in price during Biden’s term. Nearly all major brands of soda pop, Coke, Pepsi, Mountain Dew, etc.., in the 12-can packs used to be around $5 a piece. Now they are $8 – $9 apiece. Fast food at McDonald’s, Burger King, and Taco Bell, are up at least 80 – 90%. Masking tape(!) and duct tape has doubled in price. It is ridiculous. It is hard to keep track of gasoline prices because they fluctuate so much, but in Ohio they have been anywhere between 25% and 100% higher under Biden.
Okay, it is complex. Are prices up or are they not?
People that are whining about socialism and populism should pay attention to what people are saying here. I swear the root of it is in inflation.
Life is about profit and income. The central bank is forcing asset prices up and it’s centralizing power away from average people.
Now the government is running out of money.
I disagree. You can understand that in your experience, if you are not an economist, that inflation has risen by far more than the CPI indicates. You may not understand the why, the details, but a person knows it from lived experience, even if you can’t put a number on it. Thus a person can be entirely correct without the technical knowledge of how the CPI is calculated.