[davelj]

bubba99, yes I think real GDP growth has been overstated for several years. Yes, things are and have been much slower than they appear via the “headline” numbers. I’m a doom-and-gloomer but not an UBER doom-and-gloomer. We’ll have a “real” recession and muddle through for several years. It’s not the end of the world. In fact, we need a good muddle-through period to remind people that there are actually risks out there. In the long term the next few years of difficulties will be good for the economy.

[davelj]

bubba99, yes I think real GDP growth has been overstated for several years. Yes, things are and have been much slower than they appear via the “headline” numbers. I’m a doom-and-gloomer but not an UBER doom-and-gloomer. We’ll have a “real” recession and muddle through for several years. It’s not the end of the world. In fact, we need a good muddle-through period to remind people that there are actually risks out there. In the long term the next few years of difficulties will be good for the economy.

[davelj]

bubba99, yes I think real GDP growth has been overstated for several years. Yes, things are and have been much slower than they appear via the “headline” numbers. I’m a doom-and-gloomer but not an UBER doom-and-gloomer. We’ll have a “real” recession and muddle through for several years. It’s not the end of the world. In fact, we need a good muddle-through period to remind people that there are actually risks out there. In the long term the next few years of difficulties will be good for the economy.

[davelj]

bubba99, yes I think real GDP growth has been overstated for several years. Yes, things are and have been much slower than they appear via the “headline” numbers. I’m a doom-and-gloomer but not an UBER doom-and-gloomer. We’ll have a “real” recession and muddle through for several years. It’s not the end of the world. In fact, we need a good muddle-through period to remind people that there are actually risks out there. In the long term the next few years of difficulties will be good for the economy.

[davelj]

If the incorporation doesn’t affect where the kids go to school in these areas then it’s meaningless. If it does affect where the kids go to school then it’s probably a little meaningful. But a 50% drop? That seems excessive.

So the question is: Would this change affect the choice of schools the residents in the excluded areas would have, or is this just a mailing address issue? If changing a mailing address causes a 50% drop in home prices then all I can do is laugh at the stupidity of it all. I mean, please.

[davelj]

If the incorporation doesn’t affect where the kids go to school in these areas then it’s meaningless. If it does affect where the kids go to school then it’s probably a little meaningful. But a 50% drop? That seems excessive.

So the question is: Would this change affect the choice of schools the residents in the excluded areas would have, or is this just a mailing address issue? If changing a mailing address causes a 50% drop in home prices then all I can do is laugh at the stupidity of it all. I mean, please.

[davelj]

If the incorporation doesn’t affect where the kids go to school in these areas then it’s meaningless. If it does affect where the kids go to school then it’s probably a little meaningful. But a 50% drop? That seems excessive.

So the question is: Would this change affect the choice of schools the residents in the excluded areas would have, or is this just a mailing address issue? If changing a mailing address causes a 50% drop in home prices then all I can do is laugh at the stupidity of it all. I mean, please.

[davelj]

If the incorporation doesn’t affect where the kids go to school in these areas then it’s meaningless. If it does affect where the kids go to school then it’s probably a little meaningful. But a 50% drop? That seems excessive.

So the question is: Would this change affect the choice of schools the residents in the excluded areas would have, or is this just a mailing address issue? If changing a mailing address causes a 50% drop in home prices then all I can do is laugh at the stupidity of it all. I mean, please.

[davelj]

If the incorporation doesn’t affect where the kids go to school in these areas then it’s meaningless. If it does affect where the kids go to school then it’s probably a little meaningful. But a 50% drop? That seems excessive.

So the question is: Would this change affect the choice of schools the residents in the excluded areas would have, or is this just a mailing address issue? If changing a mailing address causes a 50% drop in home prices then all I can do is laugh at the stupidity of it all. I mean, please.

[davelj]

Daniel, you wrote: “it [the CPI] measures changes in the price of the SAME goods or services.”

Actually, this is incorrect. Since the Clinton administration the CPI has made adjustments (always down, by the way) for “substitution effects.” For example, if steak filets increase by a large amount but rib-eyes don’t, the CPI statisticians assume that folks will to some extent switch over to the lower-priced rib-eyes. That’s just one of thousands of potential substitution examples. While there’s some logic to this, it certainly defeats the purpose of the CPI calculation because it specifically does NOT measure changes in the prices of the same goods or services.

Where your Cutlass example is concerned, essentially you’re getting at the issue of “hedonic adjustments,” which adjust prices in the CPI for changes in quality. Again, I understand the logic here. The problem is that it’s overdone where the average person is concerned. For example, computers have been showing substantial declines in price in the CPI for some time now because while the real prices have basically held roughly steady, the “perceived quality changes” have increased over time. While I buy some of the quality changes, I think they’re overstated. Most people, for example, don’t need any of the recent increases in available storage space, etc. That is, the average person is just using a smaller and smaller fraction of the total computer benefits available to them as each year passes. The same idea applies to many goods. We are forced to pay the same price or more for the goods whether or not we actually avail ourselves of any benefit from the “improvements.”

My guess is that the Williams inflation numbers are too high (Williams assumes zero substitution effects, no hedonics, no rental equivalents, etc.) and that the government figures are too low (they make unrealistic assumptions regarding substitution effects, hedonics, etc.). The answer is probably somewhere in the middle – maybe 4%-5% “real” inflation. Which isn’t very good. But isn’t the end of the world either.

[davelj]

Daniel, you wrote: “it [the CPI] measures changes in the price of the SAME goods or services.”

Actually, this is incorrect. Since the Clinton administration the CPI has made adjustments (always down, by the way) for “substitution effects.” For example, if steak filets increase by a large amount but rib-eyes don’t, the CPI statisticians assume that folks will to some extent switch over to the lower-priced rib-eyes. That’s just one of thousands of potential substitution examples. While there’s some logic to this, it certainly defeats the purpose of the CPI calculation because it specifically does NOT measure changes in the prices of the same goods or services.

Where your Cutlass example is concerned, essentially you’re getting at the issue of “hedonic adjustments,” which adjust prices in the CPI for changes in quality. Again, I understand the logic here. The problem is that it’s overdone where the average person is concerned. For example, computers have been showing substantial declines in price in the CPI for some time now because while the real prices have basically held roughly steady, the “perceived quality changes” have increased over time. While I buy some of the quality changes, I think they’re overstated. Most people, for example, don’t need any of the recent increases in available storage space, etc. That is, the average person is just using a smaller and smaller fraction of the total computer benefits available to them as each year passes. The same idea applies to many goods. We are forced to pay the same price or more for the goods whether or not we actually avail ourselves of any benefit from the “improvements.”

My guess is that the Williams inflation numbers are too high (Williams assumes zero substitution effects, no hedonics, no rental equivalents, etc.) and that the government figures are too low (they make unrealistic assumptions regarding substitution effects, hedonics, etc.). The answer is probably somewhere in the middle – maybe 4%-5% “real” inflation. Which isn’t very good. But isn’t the end of the world either.

[davelj]

Daniel, you wrote: “it [the CPI] measures changes in the price of the SAME goods or services.”

Actually, this is incorrect. Since the Clinton administration the CPI has made adjustments (always down, by the way) for “substitution effects.” For example, if steak filets increase by a large amount but rib-eyes don’t, the CPI statisticians assume that folks will to some extent switch over to the lower-priced rib-eyes. That’s just one of thousands of potential substitution examples. While there’s some logic to this, it certainly defeats the purpose of the CPI calculation because it specifically does NOT measure changes in the prices of the same goods or services.

Where your Cutlass example is concerned, essentially you’re getting at the issue of “hedonic adjustments,” which adjust prices in the CPI for changes in quality. Again, I understand the logic here. The problem is that it’s overdone where the average person is concerned. For example, computers have been showing substantial declines in price in the CPI for some time now because while the real prices have basically held roughly steady, the “perceived quality changes” have increased over time. While I buy some of the quality changes, I think they’re overstated. Most people, for example, don’t need any of the recent increases in available storage space, etc. That is, the average person is just using a smaller and smaller fraction of the total computer benefits available to them as each year passes. The same idea applies to many goods. We are forced to pay the same price or more for the goods whether or not we actually avail ourselves of any benefit from the “improvements.”

My guess is that the Williams inflation numbers are too high (Williams assumes zero substitution effects, no hedonics, no rental equivalents, etc.) and that the government figures are too low (they make unrealistic assumptions regarding substitution effects, hedonics, etc.). The answer is probably somewhere in the middle – maybe 4%-5% “real” inflation. Which isn’t very good. But isn’t the end of the world either.

[davelj]

Daniel, you wrote: “it [the CPI] measures changes in the price of the SAME goods or services.”

Actually, this is incorrect. Since the Clinton administration the CPI has made adjustments (always down, by the way) for “substitution effects.” For example, if steak filets increase by a large amount but rib-eyes don’t, the CPI statisticians assume that folks will to some extent switch over to the lower-priced rib-eyes. That’s just one of thousands of potential substitution examples. While there’s some logic to this, it certainly defeats the purpose of the CPI calculation because it specifically does NOT measure changes in the prices of the same goods or services.

Where your Cutlass example is concerned, essentially you’re getting at the issue of “hedonic adjustments,” which adjust prices in the CPI for changes in quality. Again, I understand the logic here. The problem is that it’s overdone where the average person is concerned. For example, computers have been showing substantial declines in price in the CPI for some time now because while the real prices have basically held roughly steady, the “perceived quality changes” have increased over time. While I buy some of the quality changes, I think they’re overstated. Most people, for example, don’t need any of the recent increases in available storage space, etc. That is, the average person is just using a smaller and smaller fraction of the total computer benefits available to them as each year passes. The same idea applies to many goods. We are forced to pay the same price or more for the goods whether or not we actually avail ourselves of any benefit from the “improvements.”

My guess is that the Williams inflation numbers are too high (Williams assumes zero substitution effects, no hedonics, no rental equivalents, etc.) and that the government figures are too low (they make unrealistic assumptions regarding substitution effects, hedonics, etc.). The answer is probably somewhere in the middle – maybe 4%-5% “real” inflation. Which isn’t very good. But isn’t the end of the world either.

[davelj]

Daniel, you wrote: “it [the CPI] measures changes in the price of the SAME goods or services.”

Actually, this is incorrect. Since the Clinton administration the CPI has made adjustments (always down, by the way) for “substitution effects.” For example, if steak filets increase by a large amount but rib-eyes don’t, the CPI statisticians assume that folks will to some extent switch over to the lower-priced rib-eyes. That’s just one of thousands of potential substitution examples. While there’s some logic to this, it certainly defeats the purpose of the CPI calculation because it specifically does NOT measure changes in the prices of the same goods or services.

Where your Cutlass example is concerned, essentially you’re getting at the issue of “hedonic adjustments,” which adjust prices in the CPI for changes in quality. Again, I understand the logic here. The problem is that it’s overdone where the average person is concerned. For example, computers have been showing substantial declines in price in the CPI for some time now because while the real prices have basically held roughly steady, the “perceived quality changes” have increased over time. While I buy some of the quality changes, I think they’re overstated. Most people, for example, don’t need any of the recent increases in available storage space, etc. That is, the average person is just using a smaller and smaller fraction of the total computer benefits available to them as each year passes. The same idea applies to many goods. We are forced to pay the same price or more for the goods whether or not we actually avail ourselves of any benefit from the “improvements.”

My guess is that the Williams inflation numbers are too high (Williams assumes zero substitution effects, no hedonics, no rental equivalents, etc.) and that the government figures are too low (they make unrealistic assumptions regarding substitution effects, hedonics, etc.). The answer is probably somewhere in the middle – maybe 4%-5% “real” inflation. Which isn’t very good. But isn’t the end of the world either.

[davelj]

I’d say we’re somewhere between denial and fear at this point.

Seeing the “Temporary set back” line reminds me of a Wall Street joke:

What’s the definition of a long-term investment? A short-term speculation gone wrong.

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