Peter Schiff Skewers the CPI (Consumer Propaganda Index)

[ChartsandGrafs]

Good stuff from Schiff.

http://www.youtube.com/watch?v=pwI3Nya5L9g

[T3goalie]

Prices have not gone up! :lie:

This is right wing conspiracy propaganda... Food, utilities, drugs, health insurance and gas prices have not gone up. :lie:

Note-The M3 numbers are not published because of you right wing kooks.:laugh:

[GT Gator]

But...

I would argue that it's in our benefit to have a corrupt CPI. The major portions of Federal spending are tied to CPI. Most of the transfer payments (Social Security, Welfare, etc.) are tied to CPI. Federal employees' salaries are tied to the CPI. Many state and local expenditures are tied to CPI.

We're saving a bundle in Federal, state, and local spending thanks to a bogus CPI numbers.

If you're in Florida, the assessed value of your homesteaded home is limited to increase by the lesser of CPI or 3%. In other words, bogus CPI numbers keeps our property taxes from increasing. I imagine that this is true for many other taxes in many other states. We're all probably paying a little less taxes due to the bogus CPI numbers.

In the end, I think having a bogus CPI number benefits us all.

Does anyone really want the true CPI reported?

[ChartsandGrafs]

I would argue that it's in our benefit to have a corrupt CPI.

Think about what you're saying here. Your argument is one thing, but this another.

What kind of society do we live in when government fraud and corruption is considered more beneficial than the alternative?

[T3goalie]

Does anyone really want the true CPI reported?

Nah, I would rather live in Fantasy island with the zombies :zombie:.

[gator10010]

Waiting for mdgator05 and philnotfil response, according to them the CPI is impeccable.

[mocgator]

Inflation is coming. It can be no other way. Debt and printing of money leads to inflation. It is what it is. It's the only way to unwind the unbridled spending of the liberals.

It will ruin us all.

[GT Gator]

Think about what you're saying here. Your argument is one thing, but this another.

What kind of society do we live in when government fraud and corruption is considered more beneficial than the alternative?

There's plenty of other, more significant government fraud and corruption that is detrimental to society that we should worry about first. At least this one benefits producers at the expense of the moochers and parasites.

[philnotfil]

Waiting for mdgator05 and philnotfil response, according to them the CPI is impeccable.

I can't speak for mdgator05, but if that is what you have gotten out of what I have written, then I have written poorly.

The CPI is the most complete measure of inflation that we currently have. The CPI is slow to react to changes in inflation, but over longer periods of time gives us an accurate picture of inflation. The EPI is more volatile, it responds quickly to changes (but dramatically overstates them), and over the long term it tells us the same thing as the CPI, so it is generally useless for anything other than scare tactics.

[ChartsandGrafs]

There's plenty of other, more significant government fraud and corruption that is detrimental to society that we should worry about first. At least this one benefits producers at the expense of the moochers and parasites.

You understand that cooked CPI numbers, and inflation reported as lower than it truly is, doesn't come without negative political consequences, right?

[ChartsandGrafs]

The CPI is slow to react to changes in inflation, but over longer periods of time gives us an accurate picture of inflation.

You didn't bother to watch the video, did you?

[philnotfil]

You didn't bother to watch the video, did you?

I wasn't commenting on the video, I was responding to the post that was directed at me.

Regarding the video, I think that Schiff is cherry-picking his data and making dishonest comparisons. For example, if he is going to say that the number for newspapers and magazines is incorrect, why doesn't he look at where the CPI number came from? Why does he just make up his own index for newspapers and magazines and then show that his index doesn't match the CPI numbers? That seems different from showing that the CPI numbers are false, that seems like showing that the CPI numbers don't match a separate set of numbers that Schiff selected.

That doesn't change the fact that there are flaws with the CPI, but no measure of inflation is going to accurately reflect what each American is feeling, as the AIER people wisely note, every family has its own price index.

The biggest challenge in measuring inflation is that it is so hard to separate out inflation from industry changes. Going back to the newspaper and magazine example that Schiff used, does the CPI only use paper newspaper and magazine prices? Would a more accurate picture come from looking at internet prices as well? Can you really make an accurate comparison between newspaper and magazine prices in 1999 and 2012? The shift to online took place during that time period. How much of the change in price was due to inflation, how much was due to the shift to online?

[brainstorm]

I wasn't commenting on the video, I was responding to the post that was directed at me.

Regarding the video, I think that Schiff is cherry-picking his data and making dishonest comparisons. For example, if he is going to say that the number for newspapers and magazines is incorrect, why doesn't he look at where the CPI number came from? Why does he just make up his own index for newspapers and magazines and then show that his index doesn't match the CPI numbers? That seems different from showing that the CPI numbers are false, that seems like showing that the CPI numbers don't match a separate set of numbers that Schiff selected.

That doesn't change the fact that there are flaws with the CPI, but no measure of inflation is going to accurately reflect what each American is feeling, as the AIER people wisely note, every family has its own price index.

The biggest challenge in measuring inflation is that it is so hard to separate out inflation from industry changes. Going back to the newspaper and magazine example that Schiff used, does the CPI only use paper newspaper and magazine prices? Would a more accurate picture come from looking at internet prices as well? Can you really make an accurate comparison between newspaper and magazine prices in 1999 and 2012? The shift to online took place during that time period. How much of the change in price was due to inflation, how much was due to the shift to online?

Fair point. However, it stands to reason that claims that inflation is keeping up with salaries and revenues are somewhat dubious.

[philnotfil]

Fair point. However, it stands to reason that claims that inflation is keeping up with salaries and revenues are somewhat dubious.

I thought that wages and salaries have flatlined, and inflation has continued to increase?

[tegator80]

I wasn't commenting on the video, I was responding to the post that was directed at me.

Regarding the video, I think that Schiff is cherry-picking his data and making dishonest comparisons. For example, if he is going to say that the number for newspapers and magazines is incorrect, why doesn't he look at where the CPI number came from? Why does he just make up his own index for newspapers and magazines and then show that his index doesn't match the CPI numbers? That seems different from showing that the CPI numbers are false, that seems like showing that the CPI numbers don't match a separate set of numbers that Schiff selected.

That doesn't change the fact that there are flaws with the CPI, but no measure of inflation is going to accurately reflect what each American is feeling, as the AIER people wisely note, every family has its own price index.

The biggest challenge in measuring inflation is that it is so hard to separate out inflation from industry changes. Going back to the newspaper and magazine example that Schiff used, does the CPI only use paper newspaper and magazine prices? Would a more accurate picture come from looking at internet prices as well? Can you really make an accurate comparison between newspaper and magazine prices in 1999 and 2012? The shift to online took place during that time period. How much of the change in price was due to inflation, how much was due to the shift to online?

That was my take on the video. The point has more in common with the Global Warming debate than real enlightenment. While I am not accusing him of gerrymandering the parameters of the study, to infer facts from a small amount of data...and to pick the data to study is to invite these claims. But if we need something to go by, I would much prefer using CPI than core inflation. And as long as we know that there are imprecisions but that the math is correct then we can move on. Nothing is perfect and claiming that we need to shut things down because of imperfection is kind of silly. This is economics, not a manned mission to Mars.

[mdgator05]

Waiting for mdgator05 and philnotfil response, according to them the CPI is impeccable.

It is the best measure we currently have. However, past economics research has shown that it somewhat overstates inflation. I know, not what you are looking to hear, but sometimes science comes to solutions that you don't want.

http://www.jstor.org/discover/10.2307/2646934?uid=3739704&uid=2&uid=4&uid=3739256&sid=21101664105037

[mocgator]

You understand that cooked CPI numbers, and inflation reported as lower than it truly is, doesn't come without negative political consequences, right?

Are you under some delusion that the main stream press is doing it's job??

[ChartsandGrafs]

Are you under some delusion that the main stream press is doing it's job??

Why, are you under some delusion that the main stream press's job is to report factual information to you?

[gtr2x]

Schiff has been predicting doom for quite awhile now on a variety of fronts. Every once in a while he gets something right.