Hey now, don't that let door hit you on the way out, lol. For those who are honest enough to deal with reality: http://www.chapwoodindex.com/
I searched for your posts and only found a couple which were basically a whole lot of nothing. It doesn't take a genius or even John Williams to know that the government's CPI or the BEA's deflator doesn't reflect reality, ask any mother who shops for groceries on a regular basis, or is considering the purchase of a new/used vehicle, or sending her kid to college, or has to pay health insurance premiums. Go ahead and look her in the eyes and tell her, "if that is your "evidence" of how bad things are", I'm out of here." LOL. Carry on, ignorance is bliss.
Oh, jeez, first ShadowStats, now this one... You shoulda searched harder, I guess... I distinctly remember a relatively detailed discussion of ShadowStats I had with a socialist like yourself. Your statement suggests that, unlike myself, you have performed an exhaustive poll of mothers (looking them all straight in the eye, I'm sure). You must have asked them about how much they spend on groceries, cars etc. May I please have the data that you thus obtained and which allows you to conclude with such certainty that the government statistics don't reflect reality?
Me, a socialist? Thanks for the laugh, more likely a Freudian slip on your part. No it doesn't suggest that, that's a non sequitur. Speaking of data, can you show me the raw data from which the BLS computes the CPI which allows you to conclude with such certainty that they in fact reflect reality?
Well, you seem to care a lot about the well-being of other members of society (mothers, in your case) and you want to make their lives better. Hence I think "socialist" isn't such a bad description. Huh, you didn't? Are you telling me now that you're not certain what the "mothers"' message will be regarding the relationship between official inflation measures and their actual experienced inflation? The raw data is here, as I am sure you're aware. Obviously, it's not the raw data which allows me to conclude that the official measures are not too far from reality. Again, if you search for my old posts you will find explanations aplenty.
What you linked to is not the raw data. Where is the raw data? So, you fault John Williams for not providing access to his analysis but you don't have a problem with the government doing the same? On the old "Bernanke QE2 averts deflation..." thread, what I see there is basically an a priori rejection on your part of anyone who disagrees with the government's methodology. A more reasonable and unemotional stance would be to argue for why you believe their methodology is unsound and/or not preferable to the government's. Ironically, your knee jerk ascribing of bias to John Williams, David Stockman, Ed Butowsky and other analysts makes you look biased. You charge Williams with being biased for monetary gain, but strangely don't seem to question the BLS' motives in choosing its particular method of CPI calculation which affects a great number of cost of living adjustments tied to handouts like social security, not to mention providing an ongoing "justification" for further stimulus and asset price inflation. By Occam's razor, a parsimonious inflation measurement methodology should be preferable to anyone who just wants the most accurate reflection of reality/real world. On that basis, it should be hardly controversial that an index like the Chapwood 500 index does a much better job than the CPI at capturing the decline in the US consumer's purchasing power across a panel of 500 items which are in high usage across households and which is updated as preferences changes. The govt's methodology's inferiority is obvious on many fronts: consider their rationale for using owners equivalent rent instead of house prices in the CPI, because a home is an asset. What a wonderful example of educated imbecility. The fact that a home can be an asset doesn't obviate the reality that a consumer who needs one still has to shell out a downpayment on the house when he buys it! Another beauty is this: consider that the BLS claims to be able to adjust or changes in consumer behavior: so, if the price of beef is up 10% but chicken is 0%, they count the change as 0%... And btw, if you want to talk about making other people's lives better: conservative households give 30% more to charity than liberal ones. By your logic, would you call Republicans socialists too?
You gots to click on them buttons, innit? You gots to search better, innit? If you want some help, I can find you some links. I do question the BLS just as much as I question everything else. I assure you that I have explored these issues rather comprehensively and didn't arrive at my conclusions frivolously. You may, of course, choose to believe otherwise. Oh yeah, looking at the details, I can see the outstanding qualities of Chapwood 500 index right away. I mean such specific items as "Sales", "Tourism" and "Property" are surely in high usage across households. Then there's an item like "Bluetooth". I've always wondered how the cost of "Bluetooth" changed over the years. But my absolute favourites are "luxury box rental" and "first class airfare". Talk about a high usage item across all those households! Your use of the term "parsimonious" is rather ironic in this context. And then to add insult to injury, these "items" are aggregated not by usage, but by price. A much better job indeed! Well, I wouldn't claim that the CPI methodology is perfect. If you have a better way to measure the cost of housing consumption across renters, owners etc, pls do let me know. I can tell you that this issue has been explored in some detail and OER isn't all that bad relative to the alternatives. Moreover, as I am sure you're aware, for very large periods of time OER actually produced a higher inflation than a measure based on house purchase costs. As to the issue of substitution, you are rather confused. The Laspeyres formula used for the calculation does introduce an "item substitution bias". However, by construction this occurs only for items within the same basic category. Chicken and beef are different categories and therefore no "substitution effect" such as you describe can arise. Furthermore, Laspeyres actually is likely to produce a higher reading than the alternative methodologies. Well, that's a rather complicated issue. Do they give more in absolute terms or as a share of their net worth? Are they giving for purely charitable purposes or do they have ulterior motives?
I call BS on this, no you don't. Anyone can read your past posts for themselves. Is that the best you can do? If it is, you've got no argument. So you have a problem with 1% of the index, big whooping deal! Someone who is unbiased and reasonable would instead point out a few of the items you have (luxury box for ex) but would also note that the vast majority of the items, 99% of them are actually very much items that every household in America regularly has to pay for. And my use of parsimonious has to do with the methodology involved and nothing to do with usage or lack of usage. The Chapwood Index is a straightforward quarter by quarter calculation, % increase/decrease, just the cold hard prices that people have to fork out for. It is indeed a better job than the CPI which dilutes reality to death by a thousand cuts. There you go again with that "less than perfect" spin. CPI is severely deficient in portraying what the consumer actually faces. I've shown you a better way, but you refuse to acknowledge it. OER is plain unintuitive for the reasons I outlined earlier. That the BLS can claim to estimate substitution effects between different cuts of beef is a laughable proposition and goes to show how silly the process really is. Or maybe that's just how you'd use Occam's razor Exactly, thank you, you cannot know people's motives unless maybe you a mind reader. So take it easy with calling people socialists, it just highlights more logical flaws in your thinking. And btw, how you liking that arse kicking you guys took in the Brexit, bet you enjoyed that one innit.
You were having trouble with that, however. At any rate, suit yourself. I am happy that I have made a token effort to convince you. Good lord, you've completely missed the point. What I am trying to tell you is that some components of the index are not defined (pray tell, what are the cold hard prices that people have to fork out for "Sales"?). Even if they are a fraction of the index composition, the fact that they cannot be precisely measured means that you can't build an index. Furthermore, if you don't realize why a "straightforward" price-weighted index, which includes items like "luxury box rental" alongside household staples, is problematic (it's a matter of basic arithmetic), I think I'll not waste my time any further. And yes, my mention of "parsimonious" was a joke, for the record. You're certainly entitled to your opinion and we're going to have to disagree on this. I would just point out that your "better" way would have resulted in a lower cost-of-living adjustment for much of recent history. Given that you care about other people's well-being so much, I am surprised you're indifferent to this. Oh good lord! The substitution effects are not based on estimates computed by the BLS. They are simply a feature of the formula. Yet again, I would urge you to familiarize yourself with the arithmetic used. Huh? Unlike people making charitable donations, you have actually stated your motives pretty explicitly. Say what? Brexit arse kicking? What's this all about?