— Tom McClellan (@McClellanOsc) September 2, 2020
— M/I_Investments (@MI_Investments) September 2, 2020
You: How much is this thing I need?
Cashier: It's $20.
You: But last year it was $15?
Cashier: Yes, but now it's cheaper because it's better.
You: But it's not cheaper. It's 33% more. It's $20.
Cashier: No, it's 50% better and $20.
Cashier: Do you have an econ PhD sir?
— Rudy Havenstein, I guess I don't buy your premise. (@RudyHavenstein) June 14, 2018
Dealer: Yes, the car costs $10,000 more, but it has new safety features & a better stereo, so, after hedonic-quality adjustments, it's actually $1,500 cheaper than the old model.
You: Can I just buy the old model?
You: But my income didn't get hedonically-adjusted.
— Rudy Havenstein, I guess I don't buy your premise. (@RudyHavenstein) July 30, 2020
If the Fed wants their model of inflation to be higher, simply stop using the BLS' ridiculous hedonic adjustments, goofy weightings, odd substitutions and outright replacement methodologies they've thrown in since the 1990's.
— Rudy Havenstein, I guess I don't buy your premise. (@RudyHavenstein) August 25, 2020
U.S. shoppers have been paying more than last year for a range of consumer goods during the COVID*19 pandemic, from eggs and deli meat to running shoes, according to a Reuters analysis of the latest pricing and sales data.
This distortion has led other economic statistics to paint an artificially rosy picture of our current situation. The problem is that measures like real output, real wages and poverty are calculated using inflation adjustments that don’t reflect the higher cost of living during a pandemic. This might help explain why measured poverty has fallen even as lines at food banks have grown.