CPI: Difference between revisions

|content=Telomeres, Scientist Shortages, Seiberg Witten, Inflation ([[CPI]]), E8 TOE, Immigration, Neoclassical tastes all now have fictional narratives.

|content=[[Morals|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. 🙏

|content=[[Claims|Claim]]: when it comes to inflation and growth, Economists don’t even understand the theory of their *own* price and quantity indices mathematically:

|content=The problem of inflation index calculation has not been adequately updated since Ragnar Frisch destroyed Irving Fisher’s attempt to axiomatize economic indices following the last great advances of F. Divisia and A. Konüs on continuous and welfare indices respectively.

|content=If you’re going to push us all to move to “true” “economic” indices & chain them to reflect dynamic actors (or to disguise true inflation!), you would end up chaining ordinal preferences. And you can’t do that without gauge theory because it is a problem in parallel transport.

|content=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 don’t like anyone taking away freedom to make up methodologies to suit their political objectives involving wealth transfer.

|content=[[CPI]] should not…MUST NOT…be 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.

|content=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:

|content=A truly global inflation dashboard would be the next coinmarketcap. It'd be bigger than that, in fact.

|content=Inflation is like a thermometer. You ask how hot/cold it is. You don’t get to ask “What do you need the Gauge to say? How much thumb should be on the scale?”  

There is no reason to pretend this inflation thy never happened just to flatter power. Let’s disintermediate the old:

|content=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".

J) Adulteration of BLS [[CPI]] measure of inflation.

|content=An important, under-appreciated feature of the Build Back Better package is how it helps fight inflation.  

Importantly, this error afflicts Inflation & the [[CPI]].

|content=Hi Eric, where can I find your calculations, data, and conclusions on what the real inflation and CPI numbers are?

|content=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.

|content=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. 🙏

|content=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.

|content=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.

|content=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'.

|content=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'.

|content=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.

Technically, inflation is classically like a Wilson Loop observable on path spaces. But economists have historically denigrated path-dependent approaches (e.g. 'cycling problems', 'drift').🤷

|content=There is a different inflation rate for every consumer, varying all the time, depending on their consumption requirements and jurisdiction. Inflation is a vector, not a scalar. Just like fluid dynamics & aerodynamics, it is impossible to model an economy with simple arithmetic.

|content=You will see in the inflation literature various bizarre tendencies to introduce 'homogenous' or 'homothetic' utility functions and to hold these functions fixed. Ultimately it fell to 2 giants to claim that taste is universal. That way, rich/poor, you/me all have common utility.

|content=It's like publishing a number for the temperature in the US in 2020. Your path dependent price index measure of inflation is as individual as your commute. It's *mildly* meaningul to posit a 'representative commute to work' that doesn't depend on our various routes. But not very.

|content=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

|content=It’s 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 doesn’t maintain the central ingredient needed to compute or even impute Cost-Of-Living.

|content=You cannot keep mumbling Economic word salad forever “Modified Laspeyres…core inflation…Lowe generalization of the Laspeyres…Chained Tornqvist with revisions…chain drift…superlative index approximates flexible functional form…”

|content=Tastes change. Cost-Of-Living inflation is about tastes. If tastes evolve in time, the economists’ COL framework disintegrates. That is: there is NO theory. #EconTwitter can tell you I don’t get it.

|content=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.

|content=The funniest part of our inflation measure is the “.8” here.  

|content=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.

Inflation isn’t a number it’s a field.

Inflation is path dependent.

We have an Inflation and CPI narrative.</br>

We have a Quantum Gravity narrative.</br>

We have a “Peer Review” narrative.</br>

We had a “Great Moderation” narrative.</br>

We have a “Disgraced Financier” story.</br>

|content=Yes, familiar with the Boskin intro: It uses beef/chicken to illustrate substitution bias—if beef prices rise 20%, consumers switch to cheaper chicken, but fixed-basket CPI overstates inflation by ignoring this.

The @BLS_gov is like a second Federal Reserve operating through [[CPI]]. WAKE UP. This isn't about Billions. It's about Trillions. It's about taxing you and denying you benefits that you paid for. Without ever waking you up. It's not about inflation measurement. It's about you sleeping through the constant involutary transfer of your wealth."