> The producer price index increased 0.9% from a month earlier, the largest advance since consumer inflation peaked in June 2022, according to a Bureau of Labor Statistics report out Thursday
The more significant concern it seems to me is the rate of increase. Nearly a full percentage point in a month seems like a lot, but I'm no expert.
The fed argues that, If inflation expectations fall, interest rates would decline too. In turn, there would be less room to cut interest rates to boost employment during an economic downturn.
this economics explanation feels like gaslighting every time i hear the fed mention it. the reserve literally pushed negative rates and quantitative easing for so long that people came to expect prosperity as a feature of the economic framework of the nation, and now that we have rampant inflation that cannot be controlled by normal means (prime rate) the fed somehow wants us all to understand its our fault for enjoying affordable burger meat.
Part of those external forces involves consumers in a major way.
Being off by 40% is cause for alarm in almost any circumstance.
And then headline figure PPI was even higher at 0.9% for the month, 3.3% year.
So the real number would be 1.006^12=7.44%
And over 7% inflation is a bit more than 'pretty high' that's getting really scary if there's no clear outside reason for it
The public was so incensed that they threw out the government.
(Source: https://www.foxbusiness.com/politics/trumps-bls-pick-could-p...).
So, just like in Venezuela, that number will be delivered.
http://emilysquotes.com/wp-content/uploads/2014/09/EmilysQuo...
That said, I also think there is a good chance of that because we will be in a recession by then from the tariffs.
Only economists, policy makers, investors and people blabbing on the internet do care about stats.
Ordinary people just look at price tags; that's all they need.
But we'll never live in a place like that. We're stuck in the Facebook/Twitter/WhatsApp world.
Democracy is a circus managed by the monkey cage.
Without solid numbers I wouldn't be surprised to see a shift to "assuming the worst case" and much more conservative and lower investment.
Our main problems involve under the table unreported to the public military expenditures. If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900. Those costs are a bleeding hemorage to the middle class tax payer who aren’t getting a cut of military profiteering because they don’t own ‘defense’ stocks.
Consumer debt is almost as much of a worry as government debt.
Eventually countries that don't spend most of their treasure on their military will win. There has to be a balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc.
Your question at the end suggests those blogs and articles didn’t include compelling evidence for the case they were making. If true, then it is worth reconsidering whether it makes sense to incorporate into your world view.
For instance your initial post seems to imply that we aren't balancing our defense vs social spending and are spending way too much on the former. However, that doesn't align with our current outlays. If you check out the latest US Treasury report the outlays for the current fiscal year shows $1314bn for Social Security, $841bn for interest payments on the debt, $823bn for medicare, $805bn for health, and $758bn for defense. The primary driver of debt in the future will be the entitlement programs and interest.
Of course the unfortunate reality is that most people do not have the time to learn about everything and do their own research so we will always rely on others to some extent for our information. The danger is when your world view fills in the gaps of knowledge you lack combined with the facts you believe you know taken from someone else who may be mistaken, misleading, or outright lying.
Also, I admit to getting much of my information from professor Dr. Jeffrey Sachs, an economist.
I took an online economics class from Wharton business school, specifically on the economics of globalization. Fascinating stuff.
Anecdotal, but as a hobby for the last 20 years, I enjoy comparing the coverage of major news and economics stories in USA vs. other countries.
You're likely referring to the fact that the pentagon can't pass an audit even though there have been requirements going back to the 90s. That's more about tracking where the money they spent is going as opposed to the total quantity of money they are spending though, i.e. the $800bn is "accurate" but some portion of it may have vanished due to bad accounting, corruption, waste, fraud, etc...
Having said that any accounting for an entity the size of the US government is non-trivial. The numbers I stated above are not the final numbers. Firstly because it's YTD but also because of the complexity in the accounting. We have decades of trend lines and a lot of public data on tax receipts, bond auctions, and the like to know that defense spending isn't drastically different than what is being reported though. If you have any analysis that concludes otherwise I would enjoy reading it.
As you well know the government uses “hedonic adjustment” which is when they say a car in 2025 is so much better that a car in 1980 that higher prices should be reduced to reflect that better good.
A different model is that you need A car to participate in society so even if it’s better we just raised to the cost to exist.
Turns out, the US government is very demanding and stingy with its money for what it ultimately gets.
Calculation of CPI is deranged by the cherry picking of what they measure.
The dataset inclusions are publicly available: https://www.bls.gov/cpi/additional-resources/entry-level-ite...
There are many different measures of inflation. And they serve different purposes.
Core inflation, which I suspect is what you’re talking about when talking about removing “living necessities” is a measure used to try and understand long term stable inflation. Since oil and groceries tend to be extremely volatile, core inflation removes those items. No one is saying it’s the one holy measure of inflation. If you’re trying to understand how prices have changed for the consumer over a period of time it’s not a useful measure at all, so you don’t look at core inflation for that purpose.
You look at other measures.
Also, weights are indeed a complicated issue, but is it really surprising the weight of TVs may have increased over a period of time when owning a TV has gone from being a luxury to a necessity?
But anyways, if you don’t like the weights that are used, the underlying segment breakdown is available on the same webpage that contains the summarized calculated inflation figures. Feel free to look at the segment inflation itself.
https://www.stlouisfed.org/on-the-economy/2024/may/measuring...
Note, for example, only 2 of them even intend to measure price changes for individuals (CPI and PCEPI).
What mechanism was that done through? The census or Walmart data?
I don't think anyone has seen a staffed table outside a retail store labeled "CPI Survey". This feels like an important question.
Do you mean the other way around? The EU headline inflation rate doesn't include costs of owning a home like the US' does (owner's equivalent rent), which, as you might have guessed if you have ever wanted to own a home, is a component that has been quite inflationary, at least as far as recent memory goes. Or maybe those blogs were talking about some point a long time ago when that component pulled the US figures down (e.g. during the last housing crash)? What specific details did they give?
So just like a commenter below said, I haven't seen a single country where I spent any significant amount of time, where official inflation numbers were not seeing as a complete joke by the common folks. Everyone unanimously agreed the numbers are gamed in order to control public opinion.
I've also seen a lot of gaslighting from politicians with mental gymnastics on how the population is not poor but actually rich because "look how many (Asian made)washing machines you can buy with an average salary here today, while for previous generations this type of items was a luxury".
Yeah mate, my parent could barely afford a European made washing machine, but they could afford their own house at age 25-30, working jobs that required litte education. Must be all that avocado toast to blame.
The short answer is that they're waiting on a harmonised EU wide system for that will include housing in some measure, but that has been taking longer than expected and they didn't want to change the system in Sweden before the new system was finished...
Quite frustrating given the massive increase in housing prices since '08. Would probably have been much lower with a higher interest rate.
It may impact inflation but you seem to be claiming debt is a component of inflation calculation, when inflation is little more than the change in prices.
Debt isn't a component of inflation calculation but they are related. During Covid the US government increased the deficit (not debt, the derivative of debt) by a trillion dollars (no partisan stuff here, Trump did it first and then Biden). The infusion of money into the economy was one of the drivers of inflation between 2021 and 2025. You may ask, where did the money come from? I don't know. The government "borrowed" it, but from whom I don't know. Money "invested" does not necessarily get into the economy, but money invested in treasury bond gets spend by the government and definitely ends up in the economy.
I would love to have time (get paid?) to sit around and develop useful economic models. All I ever see is people offering simple cause and effect relationships (like I did above) without showing anything close to what I would consider a reasonable model of the economy.
Downvotes on this are weird, it’s just basic math (the deficit bar in 2025 is way lower than the deficit bar in 2021). I get FoxNews thinking math is a liberal conspiracy, but not HN.
Although without COVID Trump was definitely still on track to have significantly raised the deficit since it was falling in most years under Obama compared to 2008/2009 (before COVID he grew the deficit significantly with his first round of tax cuts, just like he just did with the big beautiful bill), and it isn’t clear that Biden would have diverged from Obama without COVID around.
Interest on 37 trillion in US government debt as well as huge consumer debt certainly is a long (and short term?) drag on the economy, but I accept your point that I don’t understand the correlation.
I have a simplistic way of thinking about the economy: I tend to view things as being healthy or unhealthy to the economic well being of all people in my country. In general, hiding information from the public is not healthy. Look, this is just my opinion, but I believe that our government is in the business of hiding information from the public; the government (both political parties) exists in its present form to protect and nurture the special interests who pay them off one way or another.
I don't see how having financial problems would make this comparison invalid.
Gemini estimated 750 to 800 total military bases.
When you say China that is incredibly disingenuous. If we said Asia yeah sure and that is effectively Japan and Korea.
Now let’s think about it more in terms of major bases/complexes. We are looking at maybe 25 in and around Japan and 10 for Korea. Still not a small number but I think a very different mental picture than 900 bases mostly around China. Also worth nothing that’s probably around 80k people deployed in those two countries.
I think there is a lot of bias everywhere, and I thought that this sort of averages some of the noise away.
I think grandparent comments about what constitutes a military base vs. a facility are interesting. I was a defense contractor from 1974 to 1998, and it seemed like all the US bases I visited were very large, but some of the NATO bases I visited were much smaller. Sorry to be anecdotal here, just explaining my own experiences.
I know my mom went to a university that she paid for with a part-time job while a student. Currently that university's tuition is 80,000 a year. When I looked at what inflation figures said for college education, it wasn't enough to account for that 10x+ increase.
I don't know how old your mom is, but it wasn't that long ago that people only went to college if they had good reason to, not because they were told they "had to" under the "A diamond is forever"-style marketing campaign. That shift in mindset enabled colleges to charge basically whatever they want. That is not a product of inflation.
That still didn't mean the workers had to comply, though. What do you think would happen, with respect to employment, if nobody attained a college degree? Not much. "Welp, no more college graduates. I guess we'd better shut our business down." would be said by nobody. Hiring would carry on as usual (aside from the lines possibly being longer, there being no legal mechanism to cull applicants early). But colleges certainly took the opportunity to present that idea and the people bought it hook, line, and sinker.
I was referring to pre-engagement. Those coding tests are generally only given after an applicant has shown enough potential to give them the time of day.
Whereas employers with tens of thousands of resumes on their desk look for a way, as to not overwhelm the process, to throw most of them out before opening lines of communication with the person. That was "No degree, garbage it goes". But yes, now that everyone and their brother has a degree, this doesn't work so well nowadays, which is why employers are quickly moving back to not caring about degrees — as you observed with said coding tests trying to stand in as a replacement. But there was that time in even more recent history...
I also said "effectively". There are technically other ways, yes, but they aren't all that practical at scale which is why a degree was settled on as the de facto solution, at least during the time it was effective.
[1] Which also further perpetuates the idea of housing being an investment with said homeowner realizing a tidy return in that ability to charge more, which sees even more people wanting in on the action so that they too can make a fortune; lather, rinse, repeat.
You can't decide that official inflation figures are inaccurate based on a specific, outlier example, when the official figures are based on averages.
And yes, absolutely, $80k a year in tuition is a massive outlier. Average in-state university tuition is closer to $12k-13k/yr, before grants and scholarships. The extreme majority of US undergraduates aren't shelling out $80k/yr for tuition payments.
From an inflation adjusted perspective, I’d actually rather pay $80K now than to have had to pay $60K in 2016 when you graduated.
You also probably know that most students don’t pay full price due to sliding scales.
I suspect this is also bimodal as well. The top universities can charge this, but the bottom probably are struggling to survive.
University tuition is a known example of an extreme inflation outlier. The cause is also known: The availability of loan dollars and the laws preventing their discharge in bankruptcy.
Tuition figures are also misleading because almost nobody pays that number. The tuition number is the maximum possible amount someone could pay without financial assistance, but when you look at the numbers you would be surprised to see that often 80% or more of students have some financial assistance. At many universities now, students with families below certain income levels have tuition adjusted down to $0.
You can’t judge university prices by the number on the website any more.
This is why the defense budget is never cut. By anyone red or blue. It's a funnel of money that can be pointed at any location in the US and give a bunch of decent full benefits jobs.
Mind you, I'm a socialist, so like, I personally wish we could move a bunch of the "jobs program" stuff over so that instead of carriers, we get well-educated, fed, and cared-for children and good medical care for all, and stuff like that. And that if we want a certain number of aircraft carriers, we should just try to actually get that many carriers on purpose for the cost that building the carriers entails. Without also trying to do 10 million other things on top of it to the point that the carrier output is a side-effect.
But like, it's probably better than no carriers at all, which is how it's going for lots of other countries. So I guess that's something to hold on to.
22%. But operations also includes civilian salaries and procurement naturally includes the labor required to produce what was procured. I would assume that R&D also includes research grants and salaries.
Almost nothing that the DoD uses is made by the DoD. It's pretty much all 3rd party contractors, and those contractors handle paying their employees.
But the confusion is that somehow, money not spent on “salaries and compensation” doesn’t go to people. All of it goes to people.
Defense spending isn’t buying “defense”, it’s buying time and effort for people to focus on and produce defense related things. This is the root of the original post that defense spending is a jobs program.
That's just straight up false.
It goes to legal entities, some of which are people.
Companies aren't people mate, and neither are investment funds.
The money might still be managed by people, but that cannot be called salary, even if you're stretching the definition.
Would you agree if I reworded my statement to “ultimately, all money eventually flows to people, whether for their labor or due to their ownership of the entities receiving the money”?
It’s not an obvious stimulus for US citizens, and in fact taking resources that would benefit other US ventures.
Also, even if you're right, the "salaries and compensation" of anyone outside the U.S. are effectively NOT that, since the thing in question is whether defense spending is mostly a jobs program.
No, almost all of it would cover your labor.
What you are describing is winning the lottery, which isn't really useful since it is a rounding error of possible scenarios. A "Having a career is meaningless because you can just win the lotto instead" kind of scenario.
In reality you would be digging for ages in your yard to find a nugget of gold. If you went to a place with gold to dig, you would be a gold miner, and no, it's not easy money, go ask them.
That's debatable. Without the labor input the product doesn't exist as far as the market knows. However, if you want to discount the labor portion, which is an equally valid take, it remains that what was said was “salaries and compensation”. Any compensation you receive for giving up the gold in your possession was already recognized. As said earlier, the exchanged value doesn't go to God, it goes to people.
> since the thing in question is whether defense spending is mostly a jobs program.
You can certainly play a game of semantics here, but generally "job" in this context refers to any kind of economic role, not necessarily labor in particular.
If you don't think it makes sense to scale it by GDP (though I do), then in real terms it has gone through cycles since 1965, with definite periods of decrease, even though the overall trend is upward: https://www.johnstonsarchive.net/policy/edgraph.html
https://www.fullstackeconomics.com/p/no-the-real-inflation-r...
It's like the traditional view on GDP growth. Be a little slower than a similar country (say 0.5% a year) wait 20 years, and your formerly similar neighbor now sees your country as quite poor.
Stipulating that they don't get eaten by their bigger neighbors. We're going to miss the Pax Americana.
Win what exactly?
Ask Ukraine how that worked out for them. While your at it, tell the Baltics they should focus on society and not the Russian world that is coming for them.
This is a common claim but I don't think it's supported. Defense spending is about 3.3% of GDP [0]. 15 years ago it was 4.9%, 40 years ago it was 6.45%, and it hit almost 10% in 1967 during peak spending in the Vietnam war. World War 2 made it around 35%. Also, what does unreported mean? Are you claiming that there is a significant amount of money being spent that isn't part of the reported military budget? How much? Defense spending was about 13% of the government budget in 2024 [1].
> If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900.
How much do those cost? I understand the claim is a lot, but how much? If you don't know, why pick this as an example?
> Those costs are a bleeding hemorage to the middle class tax payer who aren’t getting a cut of military profiteering because they don’t own ‘defense’ stocks.
Defense stocks have not performed better relative to the Dow Jones. Raytheon stock has increased 5-fold since 1985 while the Dow has increased 33-fold over the same period. If defense was easy money, you'd see hedge funds loading up on it year on year. These companies aren't valued that much. Raytheon is valued at 208B [2], which is less than McDonalds, Nestle, T-Mobile, AMD, Home Depot, and Costco individually.
> Eventually countries that don't spend most of their treasure on their military will win. There has to be a balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc.
I agree with this, but given that America only spends 13% of the budget on the department of defense, your own claim is claiming an American win. In 2021 the American Rescue Plan induced a giant amount of domestic welfare spending plans such as almost doubling the child tax credit. This was a tremendously expensive plan that cut child poverty in half, but people didn't feel strongly enough to successfully pressure politicians to keep it, which does seem pretty frustrating to me.
Also, I see you're using AI for sources below. Feed your comment into GPT 5 thinking and ask for an opinion, because it apparently thinks your inflation claim is completely reversed.
[0] https://www.macrotrends.net/global-metrics/countries/usa/uni...
[1] https://fiscaldata.treasury.gov/americas-finance-guide/feder...
I would grant them the benefit of the doubt if English wasn’t their native language, but they’d identified as a US citizen elsewhere in the thread and their name strongly implies native speakership.
In the US, this conversational construction in this context is most reasonably interpreted as the second sentence completing the thought in the first.
If a manager asks an employee “how many dents are on the bumber?” A response of “I think the total number is close to 900”, that would be in reference to just the dents on the bumper, not all over the car.
Also, elsewhere in the thread, they’ve acknowledged they simply made the number up (by just repeating what a GPT said).
I’d grant that there is a bit of ambiguity, but insinuating an “insane claim” is jumping the gun on a misreading that should have been fairly obvious in light of the “insanity”.
“Many” could be dozens or hundreds or over half. It’s poorly phrased to the point of being meaningless.
> > I think our total number is close to 900.
Total in the world.
“” If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900.””
I intended to say 900 in the entire world, but I corrected that in a comment to 750-900.
"balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc."
Spending does not equal outcomes. There doesn't need to be a spending balance, but there should be an outcomes balance. We can see this with school funding. There are some schools that are underfunded and underperform, but there are also schools with adequate funding that underperform lower funded schools. The implication that you are making is that we could fix things just by cutting back military spending. However, we are also leaders in some of the areas you mention already, such as R&D. The Pentagon fails their audits frequently and should be trimmed down in areas that it makes sense. However, just shifting that money to education isn't going to make that much of an impact.
Without linking the blogs or articles it’s hard to say much.
Inflation is a topic that attracts a lot of quackery. There are a lot of blogs and websites that go viral from time to time with claims that the “true” inflation number is dramatically higher.
There is a quick reality check you should run whenever you encounter these claims: Take the claimed inflation number over a period of time and calculate the net multiple. Then run a reality check on something like a $500,000 house or a $5 hamburger.
There’s one prolific website and author who claims the “true” inflation rate is some number like 11% going back decades. If you do the math, that means something purchased 50 years ago in 1975 would cost 185 times less. A $1,000,000 home today would have been $5,400 in 1975 and a $5 hamburger today would have been less than $0.03. Obviously these numbers don’t work, so you can discard the author’s claim.
Actual inflation numbers over long periods are very sensitive to small changes due to compounding. Even over a 10 year period. When you see someone claiming dramatically different results, run a quick math check.
Also be careful for the cherry pickers: They’ll identify one or two outlier year-over-year jumps (eggs during COVID, home prices during a housing rush, insurance prices in a city after a fire) and try to use those as their basis.
Its price goes up. "Price is what you pay, value is what you get"; houses do not increase in value over time.
Just not a very good comment in my view.
https://fred.stlouisfed.org/series/CP0000EZ19M086NEST#
https://fred.stlouisfed.org/series/SUUR0000SA0
I’m driving, it’s difficult to put them on the same chart and normalize. But they are very similar. There are differences in methodology (housing, healthcare) but those generally add a small amount to US inflation chained index vs HICP.
Being from Europe, I wish. But for now, it doesn't seem to be the case. Your military power basically allows you to bully Europe and many others, tell us what to buy and whom to buy it from, which is an enormous economic advantage. You just made our puny European leaders promise an enormous investment in the US defense industry in the moment where we would need to propel our own industry the most (it probably won't materialize, but still, we'll spend at least some of it because most of our leaders don't want to be in a bad standing with the US). You are also bullying us into signing contracts with inferior American suppliers rather than Huawei, among many other things. All of this happens mainly due to the US's disproportionate military power. Meanwhile, you can afford having a president who is borderline illiterate (and actually makes binding decisions) without the economy even meaningfully sinking (stocks at historical maximums).
So spending in the military seems to actually be a good choice, unfortunately.
> Services inflation provided much of the push higher, moving 1.1% higher in July for the largest gain also since March 2022. Trade services margins rose 2%, coming amid ongoing developments in President Donald Trump’s tariff implementations.
> In addition, 30% of the increase in services came from a 3.8% increase in machinery and equipment wholesaling. Also, portfolio management fees surged 5.8% and airline passenger services prices rose 1%.
* https://www.cnbc.com/2025/08/14/ppi-inflation-report-july-20...
> The government on Tuesday reported a mild increase in consumer prices in July, though rising costs for services like dental care and airline tickets caused a measure of underlying inflation to post its largest gain in six months.
> While financial markets have priced in an interest rate cut from the Federal Reserve next month, rising services inflation and the expectation tariffs could still significantly boost goods prices left some economists doubtful of a resumption in policy easing in the absence of labor market deterioration.
* https://www.reuters.com/world/us/us-producer-prices-accelera...
When it comes to (Fed) policy, the other thing they look at besides inflation/PCE is employment, which appears to be softening (see recent revisions which caused recent Trump-BLS turmoil).
The US risk for stagflation seems to be growing:
* https://www.investopedia.com/terms/s/stagflation.asp
* https://en.wikipedia.org/wiki/Stagflation
* https://paulkrugman.substack.com/p/its-beginning-to-smell-a-... (check out the music video link at the end)
Six chicken nuggets at McDonald’s runs you $6. Fuck that, this is just greed. The logistical argument that fake ass grinded chicken got more expensive to ship, a recipe that never changed, suddenly more expensive to make. I don’t buy it (literally).
I’ll eat water and beans until this type of economic warfare is over. Can’t stand these greedy bastards.
Those statements aren't contradictory. Pricing in non-commodity goods is always a human phenomenon, driven ultimately by the idea that a business can 'get away with it' without losing too many customers to competitors.
Tariffs, on the other hand, provide a good reason/excuse to raise prices. Affected firms see their cost structures blown up, so they have to raise prices at least somewhat. Unaffected firms see that their competitors are raising / must raise prices, so they know that they can raise their own prices in the now less-competitive market. That's how and why tariffs work: they give domestic firms protection to have profits in excess of what they would have under a free trade counterfactual.
Any argument that tariffs don't raise prices is a very long-term one, relying on the idea that it will be easy to open new firms and expand domestic production to ultimately return to a competitive market. This has nearly no effect on short-term pricing, and it's why the least-damaging changes to tariff policies are long-run and well-telegraphed plans, slowly implemented.
Tariffs
Price gouging and folks continuing to pay
Lack of alternatives - have a garden? Know how to work on a car? Etc.
Genuine competition for resources around the world and increased demand for those resourcesWe can look for mythical technical explanations as to what’s happening, but all things used to explain anything in our society is just to describe the state of your fellow man. Your fellow man is greedy. There.
After all, total profit = sales margin * sales volume. You can increase your profit by increasing your volume because you kept your prices unchanged while your competitors decided to increase prices.
I called some of these places and had to tell them to stop scamming customers. Fuck that, I’m buying a pizza oven.
Any gouging price increase is a gaping hole for a competitor (businesses are greedy and therefore will take money from other businesses) to come in and steal business. This is something that is obvious to people who have been on the business side and mostly opaque to people who have only ever been on the consumer side.
We have plenty of examples, with documentation and receipts, of businesses participating in price fixing, collusion, and other cooperative behaviors that result in higher prices for consumers and reduced competition between businesses.
You are naively assuming that all businesses express greed in the same way. Some of them realize they can make quite a lot of money with a lot less work by working together to raise prices. Not all markets are easy for a newcomer to break into, competition is far from guaranteed if the established players are cooperating.
Try going on a shareholder earnings call. They're free. It's company executives trying to impress shareholders. It's the only place I've ever heard people brag about how much they've raised their prices.
Scams are scams, man. This is not economics, it’s human nature. Tariffs did not make the price of your BLT go up, it’s greed.
What do you want to do about it, Stalin? Use the power of the state to legislate away human greed? Imprison these greedy people? Impose price controls (which have a long, storied history of not working and only leading to shortages and queues)?
We build economic policy around human nature, not otherwise. Humans will always seek to maximize profit at all costs. If you lock out foreign suppliers from competing using tariffs, local suppliers will reason that they can charge more and will rightly do so. And tariffs in one area end up affecting so many other areas in unforeseen ways. That's how tariffs on chemical fertilizer might end up affecting the price of something as mundane as bacon, lettuce, and tomato.
That's why free markets are important. They give buyers options, and sellers then have to lower their prices reasonably to be chosen/picked from that sea of options.
If you want lower prices, remove tariffs and trade restrictions.
Even for products made in the US if other things increase the cost of running a business those costs will get passed on to the buyer. It takes LABOR to get bacon, lettuce and tomato....have you heard about ICE raids and crops getting wasted because people are not showing up to work? That will affect prices as less produce = higher prices as demand increases.
If equipment gets more expensive, then cost of produce gets more expensive. I work for a manufacturing company...under Trump our cost has been spiking due to insane tariffs....those costs are passed to people who make equipment and to farmers, then to YOU.
And since this is super low qualy, there should be an additional markup of 30-50%
The purchasing power of Gold has been remarkably consistent over the long term.
That is, if you convert the gold to dollars, how many eggs could you buy?
To learn more, read up on the work of Keith Weiner of Monetary Metals, or listen to the early episodes of his podcast “The Gold Exchange”.
There's plenty of space to hide reality when building a price index.
Price index do not capture the reality of most people cost of living. They don't capture the family that have to buy margarine instead of butter, because butter became too expensive, while margarine became cheaper, Weight both items as the same, and voilá! no inflation, increases in the price of butter were cancelled by cheaper margarine, fuck you if you prefer butter.
We can also do the same with housing: Capture prices as the average of a basket of cities. In reality, some cities will have absurd price increases while others are in decadence. The average prices increase of a disputed locality like NYC metro area will probably be masked by the fact that houses in BeltRustAssEnd, MI are becoming increasingly cheap. But, for the real person, what the fuck matters if BeltRustAssEnd houses are cheap as bananas? Who can get a job there?
And of course, a single number cannot capture the subtleties of reality like the fact that while it is great that 80" TVs are now so cheap that they can be bought by the commoner, this fact means fucking nothing if having a roof over your head in a place where you don't need to spend most of your live commuting is becoming increasingly too expensive for a lot of the same folks. Too bad the commoner is just a paycheck away from being in the streets as he cannot pay for a house! He now has a TV that not even Queen Elisabeth could have just a few years ago!
The public in general can be really bad at perceiving the truth. I might take note of people's feelings to go and recheck something but I would not trust peoples feelings with stuff like this to make any sort of conclusion.
Verifiable metrics* are the only way to get any sort of objective handle on this.
* Edit: I replied below that I should have said verifiable metrics and context with discussion. Verifiable metrics are necessary but not sufficient.
But, instead a single index based on what is basically a bunch of arbitrary choices of a bunch of bureaucrats, subject to all kind of agendas and political/economical/social pressure, and based on an simulacrum of science that stands upon a bunch of questionable premises and unfalseable propositions is Truth.
The pythagorean cult of number has been a disgrace for the human race.
People usually aren't objective though even when looking around at their own lives. When evaluating inflation in groceries they'll point to a few things that have had some pretty massive spikes (beef, eggs, soda) and ignore a lot of the other things in their shopping cart that hasn't had anywhere near as much inflation (grains, pastas, lunchmeats, pork, lots of vegetables, potatoes, lots of fresh fruit, etc).
It can be pretty difficult for most people to actually be objective when looking at the world. Tons of people let emotions dominate what they see.
I'm not arguing the BLS price index numbers are entirely perfect measures of reality, but the number of times I've had people tell me things like eating out is 10x more expensive than it was a few years ago is quite high. Is that an objective reality?
Ofc one can always say that No this is not the academic way to define inflation, but who cares?
Unfortunately amazon stopped providing order reports recently...
``` $ inflation -y 2021 -f items.csv 86 successful items, 30 failed items 2256.76 total 2021 2427.62 total now +170.86 (+7%) difference ```
How is that not newsworthy, but this is?
Food prices go up because of random weather events (or locus or disease). USA beef prices are skyrocketing because of some new disease for example.
Anyone who says that a monthly food price change is an underlying indicator of overall inflation is simply lying to you.
I want to believe but I'm fear fatigued to the point I just have no fear left to give
What are you even talking about?
This is false on its face. Inflation has been a problem for years.
Before someone decides to try and explaining to me that tariffs will bring back work to the US and help our economy, I just need to say that is orthogonal to the point of inflation. It's possible that the tariffs will be a net good. I don't think they will but at least that's something that's on the table, but they will absolutely not lead to lower prices. If it were cheaper to manufacture goods in the US then we'd already be manufacturing goods in the US.
Most companies are looking for countries other than China with no tariffs and bringing it back to US is not even a consideration.
Plus, by the time you can start manufacturing in the US it would take at least 1-3 years to get a factory ready. Then, you have a new president and these might go away. Too much risk to make rash decisions on moving manufacturing.
I can't tell you how many times I've heard the idea that success in free market capitalism comes from offering goods and services to customers with the right balance between quality and price, and that good quality and price is assured because of competition in the market.
But now I see that the true path to success is to first gain favor from those who already have wealth and power, and then use their wealth and power to reduce or eliminate competition.
At a smaller scale (the majority of business, but maybe not the majority of revenue), that existing wealth and power is often much smaller and eliminating competition is much less feasible.
Like a local coffee shop, for example. Or a small industry specific software company.
Maybe they matter less in the grand scheme, but they're still a big part of things.
But I do agree with the idea that VC subsidized services to then grip the market and wring them later seem counter productive to a "free market".
> But now I see that the true path to success is to first gain favor from those who already have wealth and power, and then use their wealth and power to reduce or eliminate competition.
is attractive to the disaffected (as Nietzsche wrote on). narratives that say the whole thing is rigged are going to be appealing because they offer a non-intrinsic explanation for underperformance.
The domain name here isn't really driving the comments or content that I can tell.
Another thing to watch for is the BLS import prices which show prices excluding tariffs. If these remain flat for July as they did for June, it would be another data point suggesting tariffs induced inflation.
Unless you’re implying special credentials should be required to comment.
master_crab•3h ago