CPI, bald faced lies

[freebird5825]

Did you pay less at your pump? I didn't.

I give up, I need another cup of coffee to settle down. This is such BS.

for your groaning pleasure...see
Gas Prices - MSN Autos
and punch in your zip code.

TG i'm in VGENX in a Roth IRA. maybe that will offset the price i'm paying at the pump.
<not holding breath>

 

[Midpack]

Did you pay less at your pump? I didn't.

I give up, I need another cup of coffee to settle down. This is such BS.

RockOn: I'm not going to bother to review all my gas credit card purchases (did you?), but I wouldn't be at all surprised if the price I paid per gallon tracks pretty closely with the graph. Show us some data to support your allegation (before you suggest a Class Action suit, presumably was tongue-in-cheek).

Barbarus: I don't know of a better metric, do you? I think people's spending is increasing faster than CPI, but part of that is people have and expect more toys and services and they don't consider that the content of some of their purchases has changed which is reflected in the price (ie, the average car today has so many more features and technology than a car of 10, 20 years ago - you can't say it's apples to apples IMHO).

Ziggy29: Interesting point about the Govt's incentive to "cook the books." I don't believe they are for the most part, but they are between a rock and a hard place. If COLA goes up more radically, and SS, govt pensions, etc. go up more radically - revenues have to go up to pay for it. As a taxpayer with none of those benefits (yet), it's in my best interest that they don't go up any faster since I have to pay higher taxes as a result. I realize one day I may be the beneficiary of COLA, but I'd like to think I would resist the temptation to fleece (too strong a word, but you get my drift) the generations that follow me for my own (generations) benefit. It's going to be bad enough for them - would you like to be 21 today? I wouldn't. The fair answer for all concerned lies somewhere in between - so if CPI straddles the fence (I'm not conceding that it does BTW), maybe it's best for all concerned.

Flamesuit on, go for it...

 

[ziggy29]

As I've already pointed out, my fuel costs are down, energy is flat, food is way up because I've pushed the hedonic scale up, health care is down against last month but up year over year.

So, yes, I did pay less at the pump.

The problem is that you are not comparing apples to apples and you are not comparing the cost of living according to the same standard of living. You're not comparing the exact same basket of goods and services.

This is the same kind of "substitution" BS the government uses -- when prices are rising, substitute steak with hamburger and claim the price of meat didn't rise.

 

[cute fuzzy bunny]

You can find data easily to prove to yourself whether CPI is right or not

Gas around here went up 40c in the last month.

Using the same metric over a longer time frame...seems the last 5 years have produced a little more price pop in fuel than a 2.x-3.x% number would account for. Of course its only one of many pieces in the pie.

 

[freebird5825]

sorry if this is a repeat, but my reply disappeared into the ether.

for your groaning pleasure...
see Gas Prices - MSN Autos
and punch in your zip code.

 

[Midpack]

I'm a little fired up about this, so I might be missing something but it looks like gas was up 18% in the last year by your example. Yet CPI is less than 4% year over year? We can all pick and choose and play games with numbers.

Where on earth are you getting 18% (don't bother to answer)?

Look at the CPI data again. For Transportation Motor Fuel:

Jan to Feb: -2.0% (this is the number you based your "action" on). Note that it's the change for one month, Jan to Feb 08.
Dec to Jan: +1.2%
Nov to Dec: +2.8%

And look at what "they" are reporting for CPI Transportation Motor Fuel Feb 07 to Feb 08 +32.7%.

Still think they're 'cooking the books', 'drinking the Koolaide,' etc.?

Again, a little data to support your POV would be nice.

You have the last word, I'm done with this thread...

Emotion is the enemy of rational argument.

 

[Marquette]

The problem is that you are not comparing apples to apples and you are not comparing the cost of living according to the same standard of living. You're not comparing the exact same basket of goods and services.

This is the same kind of "substitution" BS the government uses -- when prices are rising, substitute steak with hamburger and claim the price of meat didn't rise.

I've already stated that I'm talking about my personal rate of inflation. And, for my personal quality of life and cost of living, I think it's worth substituting along the hedonic scale as appropriate. For my purposes, at a macro level "eating food" suffices for planning since we feel that we have the same quality of life if I'm making us risotto at home or we're plunking down $50 for dinner at our favorite spot. Obviously, they're going to play out very different with regard to costs, but for my purposes it works. Feel free to plan and live your life differently... just sharing my details.

 

[ziggy29]

I've already stated that I'm talking about my personal rate of inflation. And, for my personal quality of life and cost of living, I think it's worth substituting along the hedonic scale as appropriate. For my purposes, at a macro level "eating food" suffices for planning since we feel that we have the same quality of life if I'm making us risotto at home or we're plunking down $50 for dinner at our favorite spot. Obviously, they're going to play out very different with regard to costs, but for my purposes it works. Feel free to plan and live your life differently... just sharing my details.

I'm not saying you shouldn't adjust your spending according to your realities.

I just think a government that calculates inflation this way is bogus. True inflation means comparing apples to apples. Don't say transportation is cheaper because people are trading a Hummer for a Prius. Don't say food prices are flat because people are giving up steak for chicken.

By all means, in the real world we have to do this. But that has the potential to grossly underestimate true inflation. I'm not challenging your "personal" inflation, just saying it's not a legitimate way to measure true inflation in the economy.

 

[SecondCor521]

This is the same kind of "substitution" BS the government uses -- when prices are rising, substitute steak with hamburger and claim the price of meat didn't rise.

I find this claim surprising and interesting. Can you point to a cite?

2Cor521

 

[ziggy29]

I find this claim surprising and interesting. Can you point to a cite?

Substitution is a well-known practice in calculating inflation numbers. Google "CPI substitution" and you'll see it all over the place.

 

[RockOn]

Where on earth are you getting 18% (don't bother to answer)?

Look at the CPI data again. For Transportation Motor Fuel:

Jan to Feb: -2.0% (this is the number you based your "action" on). Note that it's the change for one month, Jan to Feb 08.
Dec to Jan: +1.2%
Nov to Dec: +2.8%

And look at what "they" are reporting for CPI Transportation Motor Fuel Feb 07 to Feb 08 +32.7%.

Still think they're 'cooking the books', 'drinking the Koolaide,' etc.?

Again, a little data to support your POV would be nice...

You have the last word, I'm done with this thread...

You think that 32.7% is "correctly" figured into the 4% total year over year for the average citizen? After the theft has fully done it's damage and your standard of living has paid the price, you'll see what I mean. Koolaide drinkers I say. Gold is above $1000 today.

 

[Marquette]

By all means, in the real world we have to do this. But that has the potential to grossly underestimate true inflation.

The CPI is supposed to be a model of the real world. So, if we're supposed to live like that in the real world, then it sounds like they nailed it.

So, the problem may be that other branches of the goverment are choosing one of the CPI measures, which sounds like it models the real world well, as a basis for payouts to people in the real world?

Would it help you if they also published a non-hedonistic model? I can see that that'd be useful but I'm not sure for what.

 

[Marquette]

You think that 32.7% is "correctly" figured into the 4% total year over year for the average citizen? After the theft has fully done it's damage and your standard of living has paid the price, you'll see what I mean. Koolaide drinkers I say. Gold is above $1000 today.

So you've got lots of appeals to emotion and not a single number or graph to help your case.

um, yeah, I'm angry as all get out too. When are we marching on Washington? I'm totally there

 

[RockOn]

So you've got lots of appeals to emotion and not a single number or graph to help your case.

um, yeah, I'm angry as all get out too. When are we marching on Washington? I'm totally there

I could come up with tons the numbers but you'd just dismiss them so it's not worth my effort. Let's start with the price of a typical house doubling or tripling in around 5 years, "but that doesn't count", we should just look at the cost of rent. None of us would possibly want to buy a house in our lives, would we?

 

[Nords]

As an ER I spent less than $1000 on gasoline last year. If the price doubles to $6/gallon then I'll spend... less than $2000. Gas at some Maui stations has already gone through $4/gallon.

In 2006 I spent $1400 on gas.
2005: $1163.
2004: $1073.
2003, my first full year of ER, $922.
See a pattern here? Me either.

Before we blast each other on the percentage points, is this really a significant portion of one's budget? If the price of gas could derail an ER plan, is the plan sufficiently capitalized to begin with?

These CPI questions are even more applicable to me since my federal pension's COLA is tied to whatever numbers the govt calculates. I'm certainly not going to attempt to retaliate by going out to buy my own COLA'd annuity.

My frickin toy budget skyrocketed 498% in the last month.

Yours or Gabe's?

 

[Marquette]

I could come up with tons the numbers but you'd just dismiss them so it's not worth my effort. Let's start with the price of a typical house doubling or tripling in around 5 years, "but that doesn't count", we should just look at the cost of rent. None of us would possibly want to buy a house in our lives, would we?

No, you've got that wrong. I'm a programmer and am more than willing to make up my mind on things based on facts. I don't do well with "because I said so" arguments.

Let's start slow. Show me the stats of typical houses in typical locations tripling every 5 years. The NAR says the average home price doubles every 10 years (~7% CAGR) and it's in their best interest to inflate that number.

Again, to stress the need to understand your personal situation without relying on the goverment or media to explain your life to you, let's look at my townhouse. I'm not saying that my situation is typical or even normal, but it is 100% typical for my personal situation. My wife and I purchased our townhouse for $263k six years ago. At the high point of the market for our neighborhood, similar models sold for $280k. Our current best offer is $247k and we expect to be able to sell for about $255k. You can figure out the CAGR yourself, but I can give you a hint, it's not 7%.

 

[cute fuzzy bunny]

Yours or Gabe's?

Mine. I bought two high def directv DVR's, a couple of terabytes of sata disk storage, a wii, a new cell phone, a wifi digital photo frame, and a new HVAC system.

On the matter of basket substitution, I think I have a problem with a system thats supposed to measure cost of living adjustments incorporating the REACTION people have to cost of living changes. If I'm eating steak, the cost of steak should be in there. Not chicken or hamburger.

I also dont agree that since my car, computer or television is subjectively "better", that as a result it costs me less.

In fact, steak wrapped in BACON oughta be in there. Its what everyone really wants, right?

 

[Notmuchlonger]

Speaking of bacon. Man I had some really good apple wood smoked stuff the other day. Im a bit disappointed Im all out. Im starting to get the twitches.

 

[cute fuzzy bunny]

Costco has 2-3lb packages of apple wood smoked bacon, thin and thick cut. I think its about $8.

 

[Notmuchlonger]

Costco has 2-3lb packages of apple wood smoked bacon, thin and thick cut. I think its about $8.

Let me check my numbers and see if that will match my personal inflation allowance rate for smoked apple wood bacon.

 

[ziggy29]

Let me check my numbers and see if that will match my personal inflation allowance rate for smoked apple wood bacon.

If not, you'll have to substitute pigs feet.

 

[Notmuchlonger]

If not, you'll have to substitute pigs feet.

Funny story. My MIL was telling a story of how she loved pig feet as a kid. So for her 80th birthday I got her some. Anyways they weren't as good as she remembered them

 

[Marquette]

a wii

You didn't even lie and say it was for Gabe? I'm impressed.

Wait, does he get to play?

 

[cute fuzzy bunny]

I think you have to substitute turkey bacon. You dont necessarily get to remain within an animal family for a substitution.

Pigs feet can be kinda good if they're made right. Not what i'd call 'good eats' though.

Yes, Gabe gets to play with it. We play tennis and baseball together on it. So far neither of us has spazzed out and thrown the remote through the tv set.

Super Mario Galaxy allegedly has some sort of "play along" feature for kids to join in. As soon as I quit losing all my lives in 4 seconds, I might figure out how that works.

I'm really impressed with the motion sensitive controllers, one in each hand. Very amusing to watch someone else play the game.

 

[Notmuchlonger]

That thing made my arms sore from the boxing game. Man Im getting old