CPI
On X
2010
Telomeres, Scientist Shortages, Seiberg Witten, Inflation (CPI), E8 TOE, Immigration, Neoclassical tastes all now have fictional narratives.
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CPI is broken. Why?
Think of CPI as a gauge like a thermometer. You canât have politically motivated folks making your thermometers or they can change the design to cover up climate change. Likewise you canât have economists changing the gauge to disguise the effect of printing.
A crypto native CPI governed on the blockchain to create a decentralized stablecoin people can rely on to keep their standard of living the same across time. A true alternative to fiat rather than a speculative investment asset like most other coins.
The economists canât yet compute a dynamic Cost-Of-Living-Adjustment or COLA or âChained Changing Preference Ordinal Welfare Konus Indexâ to be perfectly pedantic. Not because it doesnât exist. But because they donât have the math and donât want to lose their finger on the scale.
We must take CPI away from those who wish to back out a political agenda of printing money, raising our taxes by indexed tax brackets and slashing our indexed social security & Medicare.
Economics canât construct dynamic economic gauges like CPI/GDP until it learns gauge thy.
But more importantly, we have a culture that economics literally trumpets (and I swear I am not making this up) âEconomic Imperialismâ. It is âwe know math and you donâtâ-culture.
No. They donât know their own math. I will debate any high ranking economist on this point.
Itâs time to reveal that economics, far from embracing math or having physics envy, is deliberately avoiding solutions to old problems so that it can make up new gauges for CPI/GDP at will while telling the rest of the soft sciences âWe know your field better because we do math.â
No. Economics is an avoiding gauge theory, connections, Lie Groups, etc so it can retain its political relevance as an expert consultancy. Iâm with the crypto folks on this. Our economy must be protected from Seigniorage (printing money) and CPI tampering (e.g. Boskin Commission).
CPI should notâŠMUST NOTâŠbe adjustable to disguise inflation. It needs to be protected from the FED diluting the power of money and the BLS being free to disguise the effects by changing the method of construction.
End the forced wealth transfers of central bankers covering up their own failures with âReliefâ, âEasingâ, âStimulousâ, âRescuesâ, âToxic Asset Purchasesâ, and other bailouts of our incompetent financial overlords.
We must protect CPI from economists disguising wealth dilution.
P.S. before you remind me how arrogant this sounds, keep in mind, that I am willing to debate this publicly with any leading economist eager to defend the central bankers and triumphalist theorists openly bragging about their math. Read this, and be sick:
https://nber.org/system/files/working_papers/w7300/w7300.pdf
Moral: Gauge Theory fixes this intellectual corruption problem of economic imperialism, and #btc, blockchains and Crytpo can help.
The funniest part of our inflation measure is the â.8â here.
I so wish they were a little bolder and went with â6.8139942%, plus or minus 3*10**(-7) according to a Lowe index modified by hedonic adjustment for sub-aggregatesâ or some such.
More of us could share such a moment.
5 / The 6.8% inflation rate in the US is the highest inflation we've seen since 1982 and is understating true price increases as it assumes "shelter" (largest component of CPI @ 33%) only increased 3.8% in the last year.
Breakdown of reported CPI:
Â
The meaning of the .8 is significant, but only because of the wealth that will be transferred by it. It is not really meaningful as part of a measure of the cost of living for the representative consumer.
Itâs effectively made up to make the â6.xâ look solid. Which it isnât.
Do you actually have a point here? Your quibble is with the â.8â because it âmakes the 6.x look goodâ??? How do you figure. I honestly think you tweet sometimes purely for the sake of it
Actually there are many points.
Inflation isnât a number itâs a field.
Inflation is path dependent.
Donât advertise precision that doesnât exist.
CPI is not yet in the COL framework as claimed by BLS.
Path dependence should be embraced.
Etc.
My followers have heard them.
Eric, I am one such enlightened follower..
In what regard/magnitude is stochastic path dependency to change such CPI value if prior estimates are proportionately miscalculated? At this point in time, how best would you gauge the relative rate?
This seems to be more along the line of your ânuclear vs nucularâ reference by which we quibble about semantics, with absurdly low impact on the end problem. The lack of precision for x path dependent function would similarly yield y persons debating lack of precision..
I donât want to go into it all here. But here is what I want.
A) BLS stops lying about COL framework. Stops hand waving about economic vs mechanical indexes.
B) Stop readying c-cpi-u to take over from cpi-u. We can see you coming.
C) Move towards personalized CPI using inputs.
D) Embrace curvature if moving to chaining.
E) Publish methodology of basket or representative consumer(s). BLS isnât an oracle.
F) Consider moving to a Cobb-Douglas/CES aware changing preference mechanical index if wedded to COL.
G) Admit to conflicts of interest (Boskin).
H) Move to field theoretic & group-valued indices (e.g. GL(2, R) indices for trade).
I) Stop trying to hide Holonomy. Itâs there. Accept that it is supposed to be there rather than hiding it with Walsh multi-period circularity test.
Etc.
But please stop making vacuous claims.
Iâm prepared to have high level conversations about this. But our current system is an abomination. No one knows what is in or out. Itâs a black box that means little. The theory is bad. The explanations are fake. And the system is opaque. Even a Laspeyres without lies is better.
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