Quantum Windbag
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- May 9, 2010
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- #21
And the theory that "SUBSTIUTION" needs to be taken into acount when computing CPI is a perfect example of how state economists are moving the goalposts to obfucate the truth.
If steak cost X dollars one week, and it cost $X + Y dollars the next week, claiming that substiuting hamburger for steak means there was NO PRICE RISE is intellectual hooey!
Pretending that fuel prices are somehow not part of the cost of living, or that those rising prices are captured in everything else is another example of the flim-flammery of our reporting agencies.
I don't think it's intellectual hooey at all. The CPI is meant to measure an average basket of goods that a consumer might actually buy. Wen people substituted out of Compact Discs into less-expensive MP3's, or when people substitute out of old and expensive computer memory and into less expensive more modern memory, why shouldn't the CPI reflect that?
How often do you buy new clothes, a new car, and a new TV? Factoring all of those into an inflation index distorts it because high ticket items have been going down in price faster than every day items have been going up.