tag:blogger.com,1999:blog-4900303239154048192.post1355013209421768146..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Words to Hide the Obvious in EconomicsUnknownnoreply@blogger.comBlogger12125tag:blogger.com,1999:blog-4900303239154048192.post-24045175070153789542012-07-20T08:20:57.700-04:002012-07-20T08:20:57.700-04:00Will said: "I don't understand the sugges...Will said: "I don't understand the suggestion about the European Common Market..."<br />Sorry, I meant to write "<b>Eurodollars</b>". They began to explode in their quantity in early 1971, I understand.<br /><br />Re: "I think "elites" have always wanted price stability...." As long as they're not in business, I suppose. It wasn't the commoners who raised oil prices 9 fold in the 1970s. When global interest rates (the price of money) began to rise to such extraordinary heights in late 1979 and 1980/81 the pleas for restraint came from <i>poor</i> nations.Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-91516581580611771202012-07-19T17:43:03.538-04:002012-07-19T17:43:03.538-04:00"The change in the elites response to inflati..."The change in the elites response to inflation may have a lot to do with the explosion in the size of the EuroMarket and in the price of oil at the time."<br /><br />I don't understand the suggestion about the European Common Market.<br /><br />I think "elites" have always wanted price stability. I'm mainly familiar with American history, but it was not the elites who supported William Jennings Bryan in 1896 or Franklin Roosevelt in 1933. <br /><br />It seems amusing now that when my economics professor at college walked us through the CPI in the late 90s, the complaints he mentioned about it were all the opposite of what you hear now: people worried that it *exaggerated* inflation, leading Social Security adjustments to be too generous.Willhttps://www.blogger.com/profile/14943136764424893492noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-77748947845153374962012-07-19T10:08:02.239-04:002012-07-19T10:08:02.239-04:00Re: "Are you really ready to believe that tru...Re: "Are you really ready to believe that true inflation is 10% and the economy is still not in a massive freefall?"<br /><br />The level of 'inflation' a household is subjected to depends on their circumstances. For instance, look at today's headline at Doctor Housing Bubble: www.doctorhousingbubble.com/<br /><br />A $226,000 starter home for a family on $33,000. Is this affordable? Some commercial interests say that it is. However, house-price inflation has occurred and housing is now unaffordable for a sizeable proportion of the population. In Australia the situation is even worse.<br /><br />Perhaps the truth is that no one knows how to measure inflation appropriately, but there's no doubt that household income buys a lot less of the essentials (energy, food, housing) than it used to.Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-88956661800961979332012-07-19T09:55:03.011-04:002012-07-19T09:55:03.011-04:00There was no measure of core inflation before the ...There was no measure of core inflation before the mid-1970 when it was first introduced.<br /><br />Are you really ready to believe that true inflation is 10% and the economy is still not in a massive freefall.<br /><br />I never take anyone seriously who takes shadow stats seriously.spencerhttps://www.blogger.com/profile/09040914017546442297noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-864689483383496722012-07-19T09:27:37.421-04:002012-07-19T09:27:37.421-04:00Re: "shadowstats is a highly questionable sou...Re: "shadowstats is a highly questionable source.."(unlearningecon). I've had a closer look at ShadowStats tonight. There does appear to be a certain amount of judgement call in assertions made about what may be a 'better' measure of inflation. However, the site is helpful for the history of changes to the CPI and other measures of inflation. And the text there makes it clear just how subjective the measurement is for everyone involved in the compilation of inflation measures. The prime message of ShadowStats is that later measures of inflation tend to understate it relative to earlier measures.<br /><br />Re: "I guess we need to define competition itself." (Don Levit). Yeah. Forget the terminology and concentrate of meanings, in general.<br /><br />'Will', thanks for your helpful comments. Re: "Inflation transfers wealth from creditors to debtors, from savers to borrowers, and in the short term allows people who would be unemployed to find work. In the United States, this framing had a huge constituency from colonial times up through World War II. I am uncertain why it was forgotten." The change in the elites response to inflation may have a lot to do with the explosion in the size of the EuroMarket and in the price of oil at the time. <br /><br />Sergie2b471, do you have more information about the nature of this change in 1980?Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-16171143127629759922012-07-19T00:59:44.112-04:002012-07-19T00:59:44.112-04:00The government change of CPI in 1980 was so powerf...The government change of CPI in 1980 was so powerful that it also managed to cause the GDP deflator to report drastically reduced inflation!A Hhttps://www.blogger.com/profile/06916657901677009228noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-87211062275438664032012-07-18T17:48:40.065-04:002012-07-18T17:48:40.065-04:00Correction: there was simply not "hyperinflat...Correction: there was simply not "hyperinflation" in the US or other developed countries in the 70s. To use "hyperinflation" to describe what happened would be to redefine it. The annual inflation rate in the 70s got slightly north of 10 percent. In a true hyperinflation, the currency depreciates more than 100 percent many times over, over much shorter stretches of time. What developed economies experienced in the 70s was mild compared to what Brazil and other countries tolerated for many decades. <br /><br />I would also note that while the framing of inflation as a bad thing is conventional wisdom, there is another approach out there. Inflation transfers wealth from creditors to debtors, from savers to borrowers, and in the short term allows people who would be unemployed to find work. In the United States, this framing had a huge constituency from colonial times up through World War II. I am uncertain why it was forgotten.Willhttps://www.blogger.com/profile/14943136764424893492noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-20399232134346135432012-07-18T14:27:24.342-04:002012-07-18T14:27:24.342-04:00I like the part of the capitalism definition regar...I like the part of the capitalism definition regarding competition.<br />I guess we need to define competition itself.<br />For example, are health insurers really competing with each other, when they all offer basically the same "stuff?"<br />In 1986, Blue Cross and Blue Shield lost its federal tax exempt status with the passage of IRC section 501(m).<br />The primary reason for the loss of tax-advantaged status was that the Blues had morphed into their for-profit competitors; it was no longer the distinctive company it had been originally.<br />This was a wake-up call for not-for-profits to enter the market, offer innovative products and services, and really compete in the market. Yet, here we are 26 years later, and almost miraculously, every insurer, to my knowledge, has "toed the line."<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-7730585187377715902012-07-18T11:54:20.683-04:002012-07-18T11:54:20.683-04:00There is some truth in this post but shadowstats i...There is some truth in this post but shadowstats is a highly questionable source. One need only google it to find many people questioning their methods - at worse, they simply take CPI and add 7-8%.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-77809003959485827582012-07-18T11:06:40.004-04:002012-07-18T11:06:40.004-04:00The quote in the article is: "“The government...The quote in the article is: "“The government used the same calculation for the CPI from 1913 to 1980. In 1980, after seeing hyperinflation in late 1970s, the government changed the calculation and dropped food and energy from the Core Inflation Index.."<br /><br />Yes, there does seem to be an inappropriate mixing of the terms 'cpi' and 'core inflation. but Wikipedia confirms that 'core inflation' measurement excludes food and energy.<br /><br />I'm not sure why you are being so reactive. I was trying to emphasise the importance of focussing on the 'meanings' of terms used. Especially in the political arena of economics.Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-75003089009711987532012-07-18T10:59:20.666-04:002012-07-18T10:59:20.666-04:00I stand to be corrected, EL. If I've misrepre...I stand to be corrected, EL. If I've misrepresented the CPI. Will look into it further tomorrow. It past midnight in Australia...Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-41761238874944855222012-07-18T10:50:26.262-04:002012-07-18T10:50:26.262-04:00What a horrible post. Congratulations for falling ...What a horrible post. Congratulations for falling into all sorts of conspiracy theories.<br /><br />For starters, I do not see a change of definition for the retirement age. People get older, they have less strenuous jobs, it is normal that the retirement age changes.<br /><br />The CPI has always included food and energy. Core inflation has been used by central banks to avoid *seasonal fluctuations* and large *short-term* price movements typical of food and energy to influence monetary policy.<br /><br />Etc.Economic Logicianhttps://www.blogger.com/profile/10171296292101248614noreply@blogger.com