CPI
On X
2010
Telomeres, Scientist Shortages, Seiberg Witten, Inflation (CPI), E8 TOE, Immigration, Neoclassical tastes all now have fictional narratives.
2013
Naughty Math Games?? The USA Today headline calls our gauge theoretic CPI an evil trick to be used for good. https://www.usatoday.com/story/opinion/2013/02/12/evil-wall-street-tricks-can-be-used-for-good/1914479/
2018
You knew damn well I was gonna have a take on this when you followed me. https://www.washingtonpost.com/news/posteverything/wp/2018/05/11/the-ideas-industry-meets-the-intellectual-dark-web/
"all these thinkers can do is appease their followers. They are thought leaders who cannot demonstrate any leadership." -@dandrezner
Nice to meet you Dan. But that "take" comes from where exactly? Research? Personal interaction? You left me confused because it didn't make sense.
Nice to meet you too, Eric. That "take" came from the @bariweiss essay that started this entire hullabaloo.
Splendid. But that "Take" isn't what the IDW is about. I mean do you take issue w/ my work on labor markets? Mortgage backed securities? CPI and GDP? Bret's take on drug testing on specially bred mice? Heather on risk in Education? Ben's conservative objection to Breitbart/Trump?
Are you objecting to Sam Harris' desire to put transcendence into Athiesm via meditation or even psychedlics? Jordan's emphasis on needing to offer unapologetically family/work-oriented male models to outcompete the lure of hate?
It just seems you found a take without a basis.
May I ask you to look again or too explain why all the interesting things we talk about are of no interest? You might want to look at my essays on Russell Conjugation, Excellence, The crisis in Physics, Four Quadrant model, Kayfabe, Anthropic Capitalism, Coasian immigration, etc.
Sure, I'll take a look.
How did it go? Honestly I would have thought this research would happen before forming such a strong conclusion.
[please continue to hold.....]
2019
2020
2021
Thanks for the invitation. I can try to explain my concern.
There really *is* a problem w MAGA, Trump, Qanon & conspiracy theories running rampant. And it will result in death & destruction if it spins out of control.
However it is being fueled by those who claim to fight it.
The entire war over fact checking is a war of 2 low resolution teams.
One team wants absolute freedom to spread wild eyed theories that just about everything is a psyop or a false flag.
The other team wants to impose institutional consensus reality on everyone via media & tech.
Unfortunately, I canât live under either. So each of the warring parties thinks Iâm against them & for the other team. In their mentalities if you arenât on their simplistic team you are, de facto, working for the other side. Thereâs no basic concept of *responsible* heterodoxy.
No the Freemasons do not run everything on behalf of pedophile reptilians who faked Sandy Hook with crisis actors.
Yes there are/were conspiracies behind Epstein, H1B, @MSNBC, PPE, climate science, the âGreat Moderationâ, Great Reset...everywhere institutions want a âconsensusâ.
Having spent a good portion of my 20s at Harvard, I know *exactly* how this game works. Our betters sit down and try to figure out how to control others behind closed doors. They see themselves as the intrinsically enlightened people who need to do the thinking for all of us.
When they wanted to cut our Social Security payments & raise our taxes they opted to try to change the CPI rather than pass legislation. When they wanted to pay less for scientists they knew to keep *silent* about NSF Labor Shortage claims even though such shortages donât exist.
These are the folks who tell you âmasks donât workâ rather than âsave masks for doctors as we forgot to restock them and moved all manufacturing to China like moronsâ. They will then spin on a dime to tell you âOnly bad dumb people donât wear masksâ. This is the worst of Harvard.
So I donât want Alex Jones and Qanon nor do I want @TwitterSafety, @msnbc and @Harvard. I see them as very different forms of the same thing: people who want to take away our ability to see clearly.
And, I assure you, @Harvard tries to paint anyone it canât control as dangerous.
So, my belief is that anyone who rejects/questions Davos, Consensus Reality, Institutional Narrative, Public Health Campaigns, High Immigration, Peer Review, Primary Election Coverage, Trust & Safety...will be treated as Alex Jones sooner or Later.
This is Managed Reality â˘.
I cannot live in Managed Reality ⢠because I think it defeats the purpose of being a human being. It negates being an American. It abdicates responsibility for our children.
I have defeated Harvard about half the times we have fought. How? Because they just arenât that good.
Managed Reality ⢠has a weak spot. Itâs not run by our A-team anymore. Fauci isnât Francis Crick. Biden isnât Elon. Janet Yellen isnât Satoshi.
In general, the A-Team is going independent because tech/media/Ed are enforcing way too much conformity through personal destruction.
So why am I worried?
Well, Iâve been trying to save the institutions. Itâs probably doomed, but almost no one is trying to do what I do: rescue the institutions from their death spiral by reinserting their critics in positions of prominence (eg Chomsky at MIT).
Hence my fear.
If I were a tech guy Iâd retreat into wealth. If I were a professor Iâd shut up and collect my salary with job security. If I was a politician or journalist Iâd follow the other sheep.
But Iâm a science guy, an American and a dad. And I want my kids to have a particular future.
Thanks.
âIn todayâs regulatory environment Itâs virtually impossible to violate rules. And this is something the public really doesnât understand...Itâs impossible for a violation to go undetected; certainly not for an extended period of time.â -Former NASDQ Chairman, Bernie Madoff
This is what institutional betrayal looks like when you stare straight in its eyes: relaxed, confident, respectable, smooth, knowledgeable.
Itâs COVID pronouncements. Or String Theory. Or CPI revisions. Or âLabor Shortagesâ. Or fast-track trade treaties:
Many years ago 2002-6, I would give talks about Madoff & Epstein using âBlack Arts Capital LLCâ as a proxy, with the tag line âWeâd tell you what weâre doing, but then...â
I guessed BM might be front-running his own business. Boy was I wrong on the specifics.
RIP Bernie Madoff.
One of the things my trolls like to point to is outrageous claims.
One of my most *outrageous* is that my joint work on a 2nd Marginal Revolution for economics was scuttled by the Harvard Department of Economics Boskin Commissioners.
Yet itâs admitted:
https://ritholtz.com/2010/01/why-michael-boskin-deserves-our-contempt/
Â
Itâs kind of an interesting puzzle. Why is it that a Harvard Professor (Mankiw) can say the truth which is that this was a conspiracy to cut entitlements. But the only two people who can CALCULATE a COLA for changing tastes are crazy for saying their work was deliberately buried?
In any event, I stand by my claim. The Boskin Commission was organized by Moynihan and Packwood to deliberately break the CPI in a precise amount to avoid the US paying 1 trillion dollars over 10 years.
And I promise you no leading economist will call bullshit to debate this.
On of the reasons is that one of the commissioners bragged about this being the motivation behind the scenes.
Okay. So why canât we have gauge theoretic economics reevaluated? Everyone admits this is what happened. Why continue to bury the advance?
I dunno. But itâs amazing!
The moral of the story to me is this:
We canât have outside folks calculating and theorizing while the inside economists are fudging and cooking the books.
And calling me crazy wonât change a thing when this is finally understood. Itâs simply institutional academic malpractice.
Claim: when it comes to inflation and growth, Economists donât even understand the theory of their *own* price and quantity indices mathematically:
WILD IDEA: Maybe the economists don't actually understand what is going on right now? https://x.com/disclosetv/sta/disclosetv/status/1392488787838742536
The problem of inflation index calculation has not been adequately updated since Ragnar Frisch destroyed Irving Fisherâs attempt to axiomatize economic indices following the last great advances of F. Divisia and A. KonĂźs on continuous and welfare indices respectively.
Economists are holding their own field back by retaining their freedom to just cook up any revised index they want.
Itâs as if physicists retained the right to define temperature differently every year based on a closed door meeting and manufactured new thermometers thereafter.
If youâre going to push us all to move to âtrueâ âeconomicâ indices & chain them to reflect dynamic actors (or to disguise true inflation!), you would end up chaining ordinal preferences. And you canât do that without gauge theory because it is a problem in parallel transport.
Watch the US CPI revisions and methodology going forward. People who like to print money tend to want to change their definition of inflation and therefore donât like anyone taking away freedom to make up methodologies to suit their political objectives involving wealth transfer.
Moral: whoever constructs CPI and GDP numbers in a dynamic economy is in a position to fake higher growth and lower inflation if they are also in a position to stop the field from debating methodological advances that would restrict the freedom to make up index number recipes. đ
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 notâŚMUST NOTâŚbe 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.
I am wholly supportive of this effort. Whether this iteration succeeds or fails is immaterial. The important thing is to take inflation away from those who would disguise:
A) The printing of fiat money by central bankers.
B) The fact that economists are holding back the field.
Why are they holding back the theory of index numbers (CPI, GDP)? Because the more innovation, the less freedom to dial our gauges to whatever values the political patrons of macro economics ask. The field is literally held back by leading economists to preserve their own power.
Around 1996, Boskin Commissioner Jorgensen held back the biggest unambiguous advance in mathematical economics that I am aware of in decades. It would have interfered with their finding that the CPI was 1.1% overstated. He calculated 1.1% would save a round Trillion for U.S.
We canât afford for economics to pretend it is a science in public, yet act as an incentive operated consultancy which can get you any result you need to fit the political agenda.
So this effort of @balajis needs to be supported! We must take this away from our current leaders.
Inflation is like a thermometer. You ask how hot/cold it is. You donât get to ask âWhat do you need the Gauge to say? How much thumb should be on the scale?â
This is all discussed in detail by Jim Weatherall in his book in the final chapter/epilogue:
https://www.amazon.com/Physics-Wall-Street-Predicting-Unpredictable-ebook/dp/B006R8PMJS/ref=nodl_
Lastly, it is high time my co-developer of the theory got her due without being subjected to both the Matilda & Matthew effects. Man-boys really do drive technical women out of technical fields because they canât cite a woman who is smarter than they are. Enough.
Go @balajis.
The co-developer of gauge thy in econ as a 2nd Marginal Revolution is Pia Malaney in the early 1990s at Harvard.
There is no reason to pretend this inflation thy never happened just to flatter power. Letâs disintermediate the old:
I think this is a great introduction to geometric marginalism and economic field theory. Hope you love it:
https://www.fields.utoronto.ca/talks/neoclassical-mechanics-economic-field-theory
This eliminates a step or two. You may have to watch in lower resolution if you are on your phone however: https://x.com/sabinowitz/status/1423394091409330182
For the technically inclined who are wondering about the measurment & theory of Inflation/CPI construction, I highly recommend the following search terms: "Konus index", "superlative index", "Divisia Index", "cycling problem", "mechanical index number", "COLA" and "chain index".
You'll soon see that "The Index Number Problem" lies beneath everything from the measurement of the impact of prices on households/consumers, to the construction of Divisa Monetary Aggregates & the measurement of the money supply.
Our gauges are riddled with error & discretion.
A thermometer is a gauge of temperature. You can't let those trying to disguise human impact on climate change make the thermometers giving them discretion.
A price index is a gauge of prices. Likewise, we need to remove as much discretion from the @BLS_gov gauge as possible.
Things I don't believe we can't conclusively resolve:
A) COVID's origin.
B) The Jeffrey Epstein story.
C) UAP.
D) JFK assassination.
E) Vegas Shooting.
F) Extent of 'Democracy Fortifying' in 2020.
G) Efficacy of Non-Vaccines.
H) Mysterious WEF 'Build Back Better' mantra.
I) Negative impacts of Trade known to have been suppressed.
J) Adulteration of BLS CPI measure of inflation.
K) Negative economic impacts of Immigration.
L) Sudden spike in fake 'Objective Third Party Fact Checking'.
M) Sudden "Diversity Equity Inclusion" explosion.
Q) Joe Biden's state of cognitive decline.
R) Nature of MSNBC campagin against Andrew Yang.
S) Nature of Dean Scream, Anti-Ron Paul and other interference in democracy by Mainstream media News.
T) Impact of loss of mandatory retirement on young people seeking work.
U) Rex84.
V) Collusion between National Academy and National Science foundation division of Policy Research and Analysis to fake demographic crisis in mid 1980s.
W) Lack on anyone building the significant & desperately needed new non-profit institutions despite skyhigh wealth inequality.
X) Loss of Academic Freedom across the board in Academe.
Y) Loss of the Lancet and other publications as trusted non-political sources of fact.
Z) The true nature of @EcoHealthNYC w its relationship to @doddtra & Dr A. Fauci.
Moral: much of this 'ambiguity' is serving the few.
Can just *one* of them compute a simple Cost-Of-Living CPI for a consumer whose notion of well-being evolves even *slightly* during any period in question?
I claim not. Let's not get carried away with this concept of economic experts. This field first needs to become healthy.
An important, under-appreciated feature of the Build Back Better package is how it helps fight inflation.
Itâs not just us saying so - leading economists and analysts have pointed this out. https://fortune.com/2021/09/21/nobel-prize-winning-economists-back-joe-biden-build-back-better-plan/
ANNOUNCEMENT: I head next week to @UChicago for 5 days (Nov. 8-12) at the request of its storied Department of Economics to present our theory that all of economics is based on the wrong version of the differential calculus.
Importantly, this error afflicts Inflation & the CPI.
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I am a huge believer in the University of Chicago and its ability to stay the course while all others bend to the prevailing winds.
As such, I may (or may not) be announcing other events to discuss other work (e.g. Geometric Unity) depending on time, interest & availability.đ
Please retweet the top tweet if you're followed by economists & others interested in the debate over inflation and CPI, and your followers would find a new geometric Marginal Revolution of interest. Thanks! cc: @tylercowen, @Breedlove22, @paulmromer, @PeterMcCormack, @EconTalker.
Hi Eric, where can I find your calculations, data, and conclusions on what the real inflation and CPI numbers are?
Weird question. You seem to have me confused for the BLS. I don't take in Data. I don't have a staff or a budget. You're assuming that I have the 'Real Inflation & CPI numbers'. I don't.
This is about not even having a correct *theory* to calculate. What we corrected was theory.
So if you have the correct theory then why wouldn't you be able to calculate the correct results from the existing input data available?
I didnât say what you said. I said there was a wrong theory for CPI. We corrected that theory.
The issue of how to implement a theory in practice leases to different data being collected and different aggregations. For a different theory, you would collect different data.
As an example. The Boskin commission gave a single illustrative example in their report using two goods, chicken and beef. They gave prices but not ordinal utility. Here is the COL answer assuming Cobb-Douglas and Linear interpolation of all quantities. They could not compute it.
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The reason they had no theory to cover it was because the C-D exponent changed. And there is a claim that no extension of the Konus COL exists for dynamic tastes.
Hope that helps with your confusion. Be well.
*leads not leases in the above.
Sorry to say that I've been informed that my upcoming Nov. 10, Money & Banking Workshop at @UChi_Economics will closed to non-@UChicago folks, as will the Zoom connection. Researchers in other fields/students are allowed to attend.
This sort of breaks my no closed chambers rule.
Â
Because this is arguably the most famous econ seminar running, it's widely known for being absolutely *brutal* yet also fair (it was founded by M. Friedman). Thus I have decided NOT to get hung up on this issue, but will comit to give an OPEN seminar on the same subject if asked.
I am particularly irritated by the dismissive nature of the academic economists towards my tagging members of the Bitcoin community as if they are some kind of a joke.
If you bitcoiners want to have a jam session on this material, I'm yours. Despite our frictions, we're aligned.
The academic economists need to learn a lesson that the public is not going to stand again for revisions in CPI that disguise inflation, tax us through indexing our brackets, or impoverish us through under compensating cost-of-living adjustments to Social Security and Medicare.
I also want to say this, there is a tremendous amount of nasty Glee on #EconTwitter that this is going to be a blow out. A mauling. That I have no idea what I am in for. Etc.
If you're an economist interested in expressing your bitchery as a bet, I'm not above taking your money.
If you're an economist convinced that this is hilarious, propose a bet. Your arrogance is really my opportunity set after all...
As long as your seminar is fair, I'll be just fine. Academic econ. is in a *lot* more trouble than I am. So, if I could open the livestream, I would.
The two most dangerous printing presses in Washington DC are directed by the Federal Reserve to dilute our dollar assets, and the @BLS_gov to print CPI inflation numbers that increase taxes through underindexed brackets & slash entitlements we pay into over our working lives.
See you in Chicago. Let's take back CPI inflation which leads to mega transfers, from our unaccountable 'experts' before the money supply, modern monetary theory, and CPI hacking transfer even more of the wealth of ordinary people to those few who hold significant risk assets. đ
Great news, given that *every* tick of your BLS CPI forces billions of dollars to change hands.
"The concept of the cost-of-living index guides the CPI measurement objective and is the standard by which any bias in the CPI is defined."
I found this on @BLS_gov site. Is it true?
I assure you we are not dangerous! If you want to read about how the BLS calculates the consumer price index you can check out the CPI handbook of methods (https://bls.gov/opub/hom/cpi/).
I cannot find any place where the preference maps needed to construct a Laspeyres Konus COL index are gleaned through revealed preference. I will go so far as to say that this is bait & switch. There is a CLAIM of a COL framework, but no one is constructing anything of the kind.
Q1: Where exactly do I find the ordinal indifference maps constructed by BLS for a 'Representative Consumer' used to find substitution bias in fixed basket Mechanical approximations to a welfare Cost-Of-Living framework based on a Konus economic index of intertemporal welfare?
Q2: What happens to our BLS COL framework when ordinal tastes change? How is the effect of substitution due to price change disaggregated by BLS from changes in ordinal preferences? This is important because marketing, education, etc change tastes & there is no theory for this.
Let me give you the non-answers so you can correct:
A1: "Well, you are looking at it too literally...we have studied superlative index numbers which give a second order approximation to flexible functional form...blah blah blah."
A2: "That's really an obscure academic issue."
What I'm looking for is for BLS to stop pretending it's discerning "THE rate of inflation" to admit that it's making *policy* choices while appearing to be technical. It's determining our taxes and our entitlements by indexing, with our future in its hands as mere 'technicians'.
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What I'm looking for is for BLS to stop pretending it's discerning "THE rate of inflation" to admit that it's making *policy* choices while appearing to be technical. It's determining our taxes and our entitlements by indexing, with our future in its hands as mere 'technicians'.
"[A] market basket of goods and services equivalent to one they could purchase in an earlier period."
Exactly. Looking for the *exact* *technical* definition of 'equivalent' in the above. Can you point me to it? I assume it's a notion of revealed indifference in ordinal welfare.
I wasn't able to find the answer to the above. Perhaps you had better luck?
This is why it is useful to read the handbook of methods!
Since CPI is a Laspeyres-based index, the "equivalent" in this case refers to the weighting of the basket. I like this research note on the difference between the modified Laspeyres formula CPI currently uses and a possible geometric mean formula.
UhâŚThe Laspeyres is a *mechanical* index. The BLS site says it works within a *COL* framework.
When Mechanical = COL, it is called an exact index. You are not saying that BLS believes
Laspeyres CPI = Konus COL
I assume, because that is false. So what are you and BLS saying?
Sorry but that doesnât make sense. Itâs selfcontradictory doublespeak.
It literally just said that despite BLS COL framework claims, a Mechanical index is used w/ base periods *quantities* held fixed.
COL *requires preferences*. Where are they? There are/arenât preference maps?
Great news, given that *every* tick of your BLS CPI forces billions of dollars to change hands.
"The concept of the cost-of-living index guides the CPI measurement objective and is the standard by which any bias in the CPI is defined."
I found this on @BLS_gov site. Is it true?
I assure you we are not dangerous! If you want to read about how the BLS calculates the consumer price index you can check out the CPI handbook of methods (https://bls.gov/opub/hom/cpi/).
I can only answer your questions in a personal capacity, not as an official representative of BLS. I would encourage you to reach out to CPI team with any questions and they would be happy to answer.(https://data.bls.gov/forms/cpi.htm?/cpi/home.htm)
The Bureau is rather open that the main Consumer Price Index (CPI-U) is only one measurement of cost of living and the prices faced by consumers', and there are good reasons that the Federal Reserve targets the Personal Consumption Expenditures Price Index instead of CPI.
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In addition, the Bureau is open about the limitations of the CPI and works continually to update methods and calculations in order to improve price measurements and indexing.
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The Bureau has introduced alternative data series (including the chained CPI index) to better account for the taste changes and substitution effects that reflect real consumer spending habits. You see information for that index here: https://www.bls.gov/cpi/additional-resources/chained-cpi-questions-and-answers.htm
The CPI is guided by the concept of a COL index, but is not a perfect measurement of either cost of living or inflation. The Bureau is open about the inherent flaws in the index and has had to make tough choices in a tradeoff between precision, complexity, and timeliness.
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âGuided by the concept of a COL index but is not a perfect measurement.â
Can you show me *any* imperfect COL preferences to give me a sense of how far we may be off? Specifically preference maps: there is no COL without preference maps with which to evaluate substitution bias.
Q: Where do I find the imperfect preferences maps for the COL claim?
Q: How were those preference maps computed or imputed?
Q: How does chained CPI calculate taste change given the claim of the fed that time varying ordinal preferences cannot be tracked in COL even in theory?
There are no preference maps, chained CPI employs a superlative Tornqvist formula to account for substitution. The documents introducing the chained CPI do a better job outlining the methodological and theoretical structures than I could.(https://bls.gov/cpi/additional-resources/chained-cpi-introduction.pdf)
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Wait. Slow down.
Did you just say that BLS is claiming to work within a Cost of Living framework which *requires* preference maps *definitionally*, butâŚwords fail meâŚhas no preference maps? At all??
I must not be understanding. Chaining Tornqvist indexes isnât an answer here. https://t.co/IyIArW40OV
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Surprise.
[Word to the wise: watch very very carefully how your CPI is constructed. You have the right to know EXACTLY how it is constructed.]
NEW: Powell says it's time to retire the word "transitory" regarding inflation https://www.bloomberg.com/news/live-blog/2021-11-29/powell-and-yellen-in-the-senate-kwkw102n
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Itâs hard to imagine how confused Economics is. Imagine you work for the @BLS_gov and you have to admit that your agency claims to compute our Inflation within a Cost-Of-Living framework, but doesnât maintain the central ingredient needed to compute or even impute Cost-Of-Living.
There are no preference maps, chained CPI employs a superlative Tornqvist formula to account for substitution. The documents introducing the chained CPI do a better job outlining the methodological and theoretical structures than I could.(https://bls.gov/cpi/additional-resources/chained-cpi-introduction.pdf)
Follow the thread back from here. This is where the conversation ends. #EconTwitter may tell you terrible things about me.
Maybe. Or maybe they donât have a theory that works and they refuse to admit it while transferring billions through CPI releases.
Wait. Slow down.
Did you just say that BLS is claiming to work within a Cost of Living framework which *requires* preference maps *definitionally*, butâŚwords fail meâŚhas no preference maps? At all??
I must not be understanding. Chaining Tornqvist indexes isnât an answer here.
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You cannot keep mumbling Economic word salad forever âModified LaspeyresâŚcore inflationâŚLowe generalization of the LaspeyresâŚChained Tornqvist with revisionsâŚchain driftâŚsuperlative index approximates flexible functional formâŚâ
Tastes change. Cost-Of-Living inflation is about tastes. If tastes evolve in time, the economistsâ COL framework disintegrates. That is: there is NO theory. #EconTwitter can tell you I donât get it.
It is THEY who donât get it. They canât escape it. Itâs in their own literature.
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What you are seeing reported as Inflation is not coming from a well grounded theory. It is coming from human beings making policy level judgements as if they were merely making technical adjustments to a technical time series devoid of values about who should benefit or suffer.
Moral: you have a right to know whatâs in your food and how your pharmaceuticals were tested. You have a right to ask your surgeon what she plans to do during an operation.
You have a right to demand what economists are actually measuring as Cost-Of-Living W/O abuse for asking.
And, no, the answers to these questions are NOT in the BLS handbook on CPI methodology. Iâve looked.
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.
2022
2023
2024
2025
Your Economics department took orders from 2 senators (Packwood (R) & Moynihan (D)) as an extension of the USG to bury my research w/ P Malaney so that it could fake a 1.1% CPI overstatement to raise Taxes (via indexed brackets) and cut SS payments (via COLAs)!
You are lying.
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âNo governmentâregardless of which party is in powerâshould dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue.â - President Alan Garber
Let me explain the previous slide of Boskin Commissioner Prof. Robert Gordon in plain English.
Harvardâs Samuel W. Morris Professor Dale Jorgenson told the Boskin Commission (created by the senators) that to shave an even one TRiLLION dollars ($1,000,000,000,000) off of social security payments they would merely need to justify an oddly specific 1.1% overstatement in the consumer price index.
Which they did. âSomehowâ.
âSomehowâ involved destroying anyone who said âCPI doesnât work like that at all! Itâs not a number you can dial to get consequences you like.â
@Harvard: if you want to have me back, I will debate anyone in your economics department as a former member myself that Harvard Economics frequently has acted as an arm of the USG to bury research or dissenting experts that contradicted the narratives set in DC.
We can discuss trade as well as immigration.
If you were standing for academic independence, I would be shoulder to shoulder with you. But you are disguising the actual relationship between Harvard and the Federal Government where Harvard often academically launders government narratives to push policy objectives down the throats of ordinary Americans as favors to power and DC.
So how do the big boys play?
First: Peer review before publication is for the little people:
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Harvard supplied two of the economists.
What academic Harvard level methodology did they use to bury us?
So: âWhen in doubt, cut the number by half.â
Result: âBillions slipping off the keyboard.â
This is in the confession. Iâm not making it up.
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Your professors and department joined a hit job that was openly a government special purpose creation to cryptically slash benefits and raise taxes via a back door. The CPI!
âWe were a creation of the Senate Finance Committee and especially of the soon to be Disgraced Bob Packwood and ⌠Daniel Moynihan.â I swear it is right there.
You destroy those who do actual academic research that gets in the way of Harvardâs special relationship, laundering D.C. power.
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I would love to discuss this odd relationship you have with academics and power. Specifically:
The Theory of Trade
The Theory of Immigration
The Theory Gauged Marginalism
The Theory of Index Construction
I assume if this academic freedom is important to you @harvard, you can afford to explore this in a seminar or two with a former member of the @HarvardEcon dept.
I can relay then what Professors explained to me at the time about how the real game is played with D.C. to an academic audience.
Veritas,
Eric
There is just something special about Harvard lying to Harvard about Harvard because itâs Harvard.
Not to tell Harvard its business, but at some point you have to stop this. Your brand has âmovedâ after having a plagiarist leader. Or havenât you noticed? Or donât you care? đ¤ˇââď¸
Iâve got it! Letâs hire 2 @HarvardEcon Economists & their friends to say our CPI is massively overstated by 1.1%, to raise billions in tax revenue and slash billions in Social Security/Medicare. Yet again!
All we have to do is Weaponize peer review. Like last time.
Whoâs in?
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1. We absolutely need to reduce the deficit
2. All the ways we could do so are political suicide
I donât know how to resolve this.
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