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You have to be careful about how you evaluate and understand economic statistics. Often what seems simple is actually pretty complex. It is for this reason that Robert Reich's "Truth about the Economy" is misleading to the point of being wrong.
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3 comments:
Hah, even cherry picking the inflationary measure and going with the dudes personal calculation of total benefits he maxes out at ~1% per year.
That's pitiful.
By the way, the CPI is most relevant to consumers when measuring consumer purchasing power -- that's the reason it was created. It's the CONSUMER price index.
Now, you can argue accuracy all you like. But you need to do better than this to claim a real economist is "wrong" and to believe you somehow have the "truth" instead.
All methods of measuring inflation matters to consumers. It isn't like each type of method measures a different type of inflation. It is only called Consumer Price Index because it refers to the method of measuring inflation by looking at the price of a basket of goods. It isn't called that because it is the most relevant to consumers.
There are several problems with the CPI that makes it questionable when you look at it in isolation of other indexes. One of which was mentioned in the video. The CPI does not adequately measure quality differences. Another significant problem is in picking the particular basket of goods that will be looked at. Cell phones aren't even included in the CPI and there has been a massive decline in the price of cell phones over the last 20 years.
He didn't "cherry pick" the index. In fact he was showing that cherry picking is exactly what Robert Reich was doing. You can't choose your data because it is the most convenient and ignore all the other data out there.
it is difficult to have inflation without an unwarrented increase in the money supply.
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