So - if the top hump skews off to the right, and the bottom hump stays put, it looks like inflation across the market, when it’s actually happening mostly at the top end.
Perhaps the pricing datasets need to be filtered and stratified, to present a CPI and a… I don’t know, a CPI+, with one looking at the actual general consumer market around median incomes, and one looking solely at the luxury/wealthy end of the market.
Dunno. Just seems like a poor basket of goods when there isn’t a uniform price distribution.
I came across the ALICE indicator and it does something close to what I wanted. It tells a very different story of how the economy is doing. https://www.unitedforalice.org/essentials-index
It wasn’t until I quite literally started sharing home listings in my area and budget that my own parents finally understood the bleak reality their kids are struggling with. I suspect that’s something we just need to do more of - shame the $650k fire-destroyed homes on Redfin, the vacant lots valued at a million bucks, the Zoning Board blocking yet another multifamily home, the sickening cost of yogurt at the store ($7.50 for a Chobani four-pack!), six-figure SUVs, and a minimum wage that can’t even make rent.
As my friends tell each other (in a sing-song-y voice): “At least we’ll all find out together.”. Difference is, we all know who will be stuck paying the bill.
I agree. The biggest problem I’ve run into trying to explain this to other people who are not experiencing the same issues is that they take it as a partisan criticism. They’ll agree if their favorite guy isn’t running the show, and vehemently argue against it if it’s their favorite guy. This is an everyone problem, and if you’re not affected by it, it’s only a matter of time.
You don’t care that medical school costs half a million because you’re in your 50s and your kids aren’t going to one? Wait until the kid who took on that debt graduates and charges you $5K for renewing your arthritis prescription when you’re 65 and on fixed income.
I'm not sure the baselining makes sense other than showing the divergence from 2007; if ALICE turned out to be lower than CPI lower it would bias it but maybe more likely it started higher which biases it in another way. Baselining at the first year of the great recession might be very misleading, baselining the year before and difference in housing stuff might have made the divergence look very different. Rents ended up increasing through the recession though even if prices didn't.
There is a very good argument to have different headline measures for those purposes—currently CPI is used for a lot, and the main alternative used for policy by, e.g., the Fed, PCE, while different than CPI in detail isn’t difference in focus (though I'd argue the focus is proper for the Fed’s main use, you wouldn’t want broad monetary policy driven by something with ALICE’s focus when the results significantly diverged from a broader basket measure, though you would probably want poverty-targeted fiscal programs to be.)
Inflation as applicable to different contexts being treated as a scalar rather than a multidimensional vector is a mistake.
I think it's useful for people to remember that the numbers reflect averages.
A bunch of surveys are done asking what they spend money on: and the average of those surveys sets the weights for Shelter, Food, Transportation, etc. It's a model, and as the old saying goes:
* https://en.wikipedia.org/wiki/All_models_are_wrong
StatCan (the folks folks that do Canada's CPI) release the "headline number" that all the papers publish in headlines, but in their release they also breakdown what the CPI is for each province (Chart 4), which recognizes the variance of the metric:
* https://www150.statcan.gc.ca/n1/daily-quotidien/251021/dq251...
StatCan actually also have a page where you can calculate your personal CPI given how much you typically spend on various items:
* https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020cal...
Perhaps the BLS (or some academic) should release a 'personal CPI' tool as well.
They do if they want to refinance, sell the house, or demonstrate favorable asset:debt ratios for other purposes.
> And taxes are mainly affected if your property value rises higher relative to the rest of the community.
Property taxes are usually % of value, so dependent on absolute value changes, not changes relative to the rest of the community.
I may be completely wrong, but this is what I've been told by people I've known in the past that held some local public office (such as a coworker in one case, and a neighbor in another, they were both local aldermen). I've also google searched it, and came up with similar answers.
Typically, a city / county budget is set, and they then need to collect it from the pool of property owners by taking the assessed value and using a multiplier to reach their budget target. Now the budget may increase due to inflation or other factors, but I'm not aware of any local government that suddenly finds itself flush in cash due to doubling of property values. If your elected officials do things differently and look at rising property values as their own windfall, well then you and your neighbors need to vote them out of office real fast.
I've verified this with my own house (both the last one and current one, about 30 years of home ownership). The 2008 - 2009 crash had negative affects on property values, but my property taxes didn't go down, and insurance quadrupled (because the insurance companies lost a lot on investments and had to make up for it). And plotting property tax increases over the last 10 years where my property doubled in value, the taxes were just under 5k when I bought and now are just barely over 5k.
One thing that can happen, is as budgets go up with inflation or new initiatives, absolute dollar amount taxes rise accordingly. And people don't like to pay more taxes, so a lot of people will appeal their tax assessment. And a good attorney can get it lowered to some degree. That means that everyone who hasn't fought (and won) against their tax assessment (the assessed value of their home), will see their taxes increase more as their assessed value is now higher relative to the neighbors who fought their assessment.
tl;dr Observers have been unable or unwilling to accurately read and acknowledge the circumstances many people are living with. We are firmly in a "extend, pretend, and pray" era.
drekipus•5h ago
We have a big "cost of living" concern in Australia, and it's very ripe to gaming the system through things like energy bill handouts.
I can only talk from the Australian perspective, but I think there's certain elements set up like a Ponzi scheme, and we'll need to correct it and stick to fundamentals, and that is going to break quite a few eggs.
kfterrg67•5h ago
This is what "the economy" has become.
It is supposed to be metrics for quantifying the productivity and prosperity of a nation. It has now become the target for short-sighted bureaucrats, usually at great cost to the nation.
It's much more difficult to quantify happiness, community, harmony, purpose, togetherness, connection to people and soil and history. Can't hit those KPIs.
But you can absolutely destroy a nation trying to boost the next GDP stats in time for the election.