Producer Price Inflation Eases to Only 0.7% in May, The Smallest Annual Increase in More Than 3.5 Yrs.
The BLS reported today on producer prices for May, here are some highlights:
1. Prices for finished goods fell 1% in May from April, and increased annually by only 0.7% through May, the eighth straight month of slowing year-over-year producer inflation following a 7% increase for the 12 months through September 2011. It was the smallest annual increase in producer price inflation for finished goods since October 2009 more than three and-a-half years ago (see brown line in chart above).
2. Intermediate goods fell by 0.8% on an annual basis through May, the first annual deflation in intermediate goods since November 2009 (see red line in chart).
3. Prices for crude goods fell by 3.2% from May last year (see blue line), led by sharp declines in food (-2.3%) and energy prices (-5%).
MP: Overall, the ongoing, declining inflation rates for producer prices that have been happening for the last year, along with price deflation now for crude and intermediates goods, should ease some of the fears of inflationary pressures at the consumer level. Falling raw material costs for producers means that there won't be any input-cost based incentives to raise prices on consumer goods, and we can expect low and stable consumer inflation through the rest of this year.
For example, inflation expectations from the bond market, measured by the breakeven rate for 10-year treasuries (nominal yield minus the real TIPS yield) have been trending downward for the last three months, falling from 2.4% in early April to 2.1% in recent trading, see chart below from Bloomberg.
84 Comments:
What should the "natural rate" of inflation be in a productive/inventive economy? The pull of new product development/consumer demand comes from cheaper and higher quality items. Items which enhance and improve one's standard of living while costing less than previous options are those which are in constant demand. (The iPhone had tremendous sales even during the depths of the recession because of its life improving benefits.)
Shouldn't the natural pace of inflation be negative in a free market and productive society?
Inflation is the result in my view of government miss-spending without a measure of benefit obtained.
What we truly need is form of ROE measure on govt spending to reduce the inflation impact of government.
Core PPI for May is about the same as it has been since last July - virtually no change at around 3%.
And there are signs that both the CRB and CCI have bottomed.
Inflation is alive and well at over 6%, when corrected for BLS BS.
david einhorn had some interesting comments a couple months ago on CPI methodology around "quality adjustments" that i think are right on the money.
why treat innovation as something we need to try to offset with monetary policy? when you actually realize that that is what they are doing, just how insane current policy is becomes apparent.
"Some will argue that if the Fed raises rates, it will cause deflation. Just the word 'deflation' makes Chairman Bernanke break into a cold sweat and reach for the Jelly Donuts. Fear of deflation should depend on what, exactly, is deflating.
The sort of deflation that puts pressure on wages is a clear negative, as it leads to a lower standard of living. On the other hand, lower prices caused by scientific progress and higher efficiency are unambiguously positive.
Apple's newest iPhone has twice the memory, a better camera, and other small improvements and carries the same price as the prior version. Government statisticians see an improved product at the same price and count it as a price cut, or deflation.
There is no reason for the Fed to conduct monetary policy to offset advances that improve our standard of living, in particular when it results in driving up the price of something else, like oil.
Yet, while the Fed seems compelled to respond to innovation as if it were a bad thing, it throws up its hands when confronted with rising oil prices. Unfortunately, when the Fed sets policy with a goal of driving prices higher, it doesn't get to choose which prices are most affected"
david einhorn had some interesting comments a couple months ago on CPI methodology around "quality adjustments" that i think are right on the money.
Not only that, but how about going the other way? Adjust CPI down when there are quality losses.
What should the "natural rate" of inflation be in a productive/inventive economy? The pull of new product development/consumer demand comes from cheaper and higher quality items. Items which enhance and improve one's standard of living while costing less than previous options are those which are in constant demand. (The iPhone had tremendous sales even during the depths of the recession because of its life improving benefits.)
Shouldn't the natural pace of inflation be negative in a free market and productive society?
I understand what you are saying, but I think there is a rhetorical distinction that needs to be made:
Free markets reduce costs not prices. Costs are what you have to give up in order to obtain the benefit of the good or service. Price is a function of that cost, sure, but it is not analogous.
Example: the price of a new car is $20,000. The cost of the new car is the hours worked to make that money, the foregone opportunities that the $20K could have been put towards (other goods? pay down debt? Savings?), etc.
What a free market will do is reduce the costs. But as demand rises, so do prices.
A healthy economy always has some level of inflation. It signals growing economic activity (all else held equal). Too much inflation can mean an overheated economy. Too little (or deflation) can mean there is not enough economic activity.
I wish the BLS sold tires and batteries.
I noticed the price of $115 for an automotive battery that was only $85 last August when I purchased one (35% inflation). Light truck tires that were $160 each last year are $215 this year (34% inflation). Note that these products are still manufactured in the US - not Chinese imports.
For what its worth, used car index:
http://www.nowandfutures.com/images/used_car_index.png
Most recent value translates to about $12,600.
bart-
"Adjust CPI down when there are quality losses."
the bls claims to do that, but i have not seen much evidence that they do to any real extent.
airline seats would be a great test case.
personally, i'd rather they just flat out refrain from making such subjective assessments. it just adds too much bias and preconception etc into the mix. we can likely agree that a seat in coach is now worse than in the 70's. the seat is smaller, you have less legroom, you will not get a meal, you have to pay for bags, etc, so it's pretty unambiguously worse. but by how much? we can maybe price the meal and the bags, but what is an inch of legroom worth? it's just too subjective to put a % on that.
personally, i'd rather they just flat out refrain from making such subjective assessments. it just adds too much bias and preconception etc into the mix.
Totally agreed, it's a abomination at best.
And the BLS to the best of my knowledge doesn't even reveal how they do the adjustments.
Maybe they have a Ouija board? -g-
just curious....
if a manufacturer finds a way to make the same product (same quality) for less but sells it at the same price.....
how is that represented ?
and
the manufacturer makes what appears to be the same product but constructed of cheaper, lower quality materials - but sells it for the same price....
how is that represented?
it appears to me the former is increased productivity....
and the latter is basically inflation....
you guys that know this stuff.. share your views...
the manufacturer
"Maybe they have a Ouija board?"
i suspect that having a ouija board would work better than having an "agenda".
bad link to the BLS report..
i suspect that having a ouija board would work better than having an "agenda".
I'll drink to that!
Larry G:
To the best of my knowledge, the BLS most often reflects it the same way - as if both were the result of productivity. They do pick up changes in quantity though, as in adjusting for a bag of cotton balls that used to be 6 oz and is now 4 oz and being sold at the same price.
The real problem is that the BLS is not fully transparent and public, and surprisingly quite a bit less so than the Fed.
@Bart - so there is no difference between building a quality product for less money and lowering the quality of a product with cheaper materials?
If you think about it.. I would be dang near impossible for any agency to keep track of this kind of thing, right?
It's amazing some people will hold all the significant economic variables that determine inflation constant, over time, to come up with a ridiculous inflation rate, that contradicts all the other variables, like the charlatan at Staticstats.
The inflation bias is some people screaming inflation, while silent on disinflation and deflation.
larry-
there is no question that measuring inflation is difficult even with the best of intentions.
however, there are some things we can determine, like having a monetary policy that sees product improvement as deflation and therefore something to oppose with monetary policy is a bad idea.
we can also look at parts of the CPI like healthcare and rent and see that they are significantly under-weighted.
we can also see that items that go up in price (like prime meat, rib eye etc) get taken out and replaced with cheaper cuts and grades with the net effect of lower prices and that this is done formulaicly, not based on consumption patterns.
i think bart raises a valid point on transparency.
the BLS could be a great deal more forthcoming with their inputs, weightings, adjustments etc.
they could lay out their algorithm and their assumptions and let others see it.
they are supposed to be a public service. why all the secrecy?
that seems like the action of someone with somehting to hide, not someone with an interest in getting at the truth and allowing informed discussion.
the BLS would be a really interesting target for a FOIA request.
i wonder if it has been tried.
@Bart - so there is no difference between building a quality product for less money and lowering the quality of a product with cheaper materials?
If you think about it.. I would be dang near impossible for any agency to keep track of this kind of thing, right?
Right, which is the biggest problem for all economic data. Sure, you can boost GDP by building ghost cities, but are your people really better off? Sure, you can sell products of an inferior quality at the same price, but are your customers (and your company) really better off?
That's why it is so damn important to look at multiple economic indicators. To focus on just one (GDP, stock market, CPI, PPI, Industrial Production, USLI, whatever) is foolish. Any one of them can give off false signals. You must remember that each one of these are economic indicators. No single one tells the complete story. You need to look at multiple to begin to see the whole picture.
" they could lay out their algorithm and their assumptions and let others see it."
totally agree. It can and should be an open process with as many industry participants that choose to be involved.
Morganovich, you're beating your own records for false assumptions.
Why should the BLS provide a huge amount of math that few people understand?
The economics is already out there and few people understand that, except mainstream economists, who agree with the BLS.
Some people will do what they do now with information. Pick less than 1%, ignore the rest, and come up with ridiculous conclusions.
Top mainstream economists are experts in both math and econ. So, they're the ones to ask about the BLS.
John Williams of Staticstats reminds me of a crackpot yelling "fire!"
Nervous people will react strongly and sense there's a roaring fire somewhere without realizing it's just a barbecue.
John Williams of Staticstats reminds me of a crackpot yelling "fire!"
Nervous people will react strongly and sense there's a roaring fire somewhere without realizing it's just a barbecue.
I'm not taking a side in this debate, but I do just want to say this comment made me chuckle.
@Bart - so there is no difference between building a quality product for less money and lowering the quality of a product with cheaper materials?
If you think about it.. I would be dang near impossible for any agency to keep track of this kind of thing, right?
morganovich covered it pretty well.
My only comment is that behind the scenes political goals can easily affect the desire to collect accurate stats. It is far from impossible to ask if there have been quality changes on products.
t's amazing some people will hold all the significant economic variables that determine inflation constant, over time, to come up with a ridiculous inflation rate, that contradicts all the other variables, like the charlatan at Staticstats.
The inflation bias is some people screaming inflation, while silent on disinflation and deflation.
Lots more noise and spew from PeakTrader, as usual.... funny how there has NEVER been a comment or fact based answer to anything brought up about the BLS lies.
And as far as disinflation, he even
chooses not to pay attention to posts like mine where I noted that CPI w/o lies has been dropping for about 10 months - aka disinflation.
As far as the "main stream economist" horse puckey - he gets points for the logical fallacy of 'appeal to authority' - the same authorities that missed the housing bubble and the financial crisis.
-ng-
Pick less than 1%, ignore the rest, and come up with ridiculous conclusions.
I see you've finally realized what you're doing, and have done.
John Williams of Staticstats reminds me of a crackpot yelling "fire!"
Nervous people will react strongly and sense there's a roaring fire somewhere without realizing it's just a barbecue.
So many personal attacks (aka, ad hominems), so little actual facts - or even answers to the BLS lies issues.
"Quality admission" of being a complete amateur in the area.
I'm not taking a side in this debate, but I do just want to say this comment made me chuckle.
I grinned too, quality picturesque... but in my opinion it's PT's backside that's on fire and he's fanning the flames.
Here's hoping he didn't recently eat any beans... -g-
peak-
"Morganovich, you're beating your own records for false assumptions.
Why should the BLS provide a huge amount of math that few people understand?
The economics is already out there and few people understand that, except mainstream economists, who agree with the BLS."
what a pile of nonsense.
first off, the BLS is a public organizrion. i pay for it. i should get access to the data if i want it.
instead, they hide it like the GISS do, because if we could actually see how bad the model was, we might demand they change how they do it.
your argument about few people being able to understand it is absolutely ridiculous. who cares? i can understand it. i want to see it. much of wall st feels similarly. if they were academics, they'd need to publish their methodology and data so it could be checked and assessed. that's how science is supposed to work.
what's the downside to publishing the detailed model? i'm sure 99%+ of amercians would never once look at it, but to the fraction of 1% that are interested, it would be great.
your "mainstream economist" argument is even worse. how could such people have an informed opinion if all the data is not published?
your two arguments are self contradicting.
very few economists have actually studies the cpi in depth. most just go along because there is little other data.
but the actual wall st economists i know do not believe cpi. they get paid to be right, not to bicker academically.
i'm really not interested in another argument with you here peak. you know virtually nothing about this and lack the understanding of statistics and data handling to even understand the debate and a total disregard for notions of open, repeatable science that are the only way to make sure any such claims are accurate.
you're just repeating ever more shrill appeals to authority over and over and providing no data or logic.
So many personal attacks (aka, ad hominems),
I'm not sure it was an ad hominem. An ad hominem, at least in my understanding, is a fallacy that a person is wrong because of something distasteful (either real or imaginary) on his character. But just an insult is a different matter.
Let me explain it this way using myself as a personal example:
I immediately discount anything Lakshman Achuthan (of ECRI) says. I think he's a friggin' idiot.
If I said "he's wrong because he's an idiot" that's an ad hominim.
If I say "he's wrong because he only follows one economic indicator and ignores all others and because of that he's an idiot" that's just an insult.
To bring this full circle, I don't think Peak thinks Williams is an idiot and therefore he's wrong. I'm sure Peak has his reasons. That's why I don't think i's an ad hominim.
To bring this full circle, I don't think Peak thinks Williams is an idiot and therefore he's wrong. I'm sure Peak has his reasons. That's why I don't think it's an ad hominem.
Fair enough, although his "John Williams of Staticstats reminds me of a crackpot yelling "fire!" sure strikes me as a strong personal attack on the man himself ('crackpot' and 'yelling fire'), and ad hominem translates to "at/to the man".
If Peak has reasons, I sure haven't heard them and I have heard nothing but crickets on virtually every proof or chart or link I've offered.
"While the CPI is the best measure currently available, it is not a true cost of living index (this has been recognized by the Bureau of Labor Statistics for many years)."
Straight quote, directly from the Boskin Commission Report.
Both my CPI w/o lies and Williams SGS-CPI are attempts to show an actual Cost of Living Index, which is much closer to a real inflation rate than all the CPI measures.
The upward bias creates in the federal budget an annual automatic real increase in indexed benefits and a real tax cut. CBO estimates that if the change in the CPI overstated the change in the cost of living by an average of 1.1 percentage points per year over the next decade, this bias would contribute about $148 billion to the deficit in 2006 and $691 billion to the national debt by then. The bias alone would be the fourth largest federal program, after social security, health care and defense. By 2008, these totals reach $202 billion and $1.07 trillion, respectively
Another quote, straight from the Boskin Report. Someone asked about proof of the political element in the CPI lies.
This is not rocket science folks.
The proof is directly in the above. The BLS admits that the CPI does not measure Cost of Living and has not measured it (aka, inflation) for decades. Then they admit that it understates by at least 1.3%.
Case closed... at least until someone else admits that they can't see the nose in front of their face. *sigh*
"If Peak has reasons, I sure haven't heard them and I have heard nothing but crickets on virtually every proof or chart or link I've offered."
ditto.
peak seems to have very strong opinions here, but i have sure never seen him muster any evidence other than ad hominem and appeals to authority to back them up.
bart-
the problem is that no one ever bothers to actually read the boskin report.
i have repeatedly asked folks like peak to do so and to please point out to me the empirical evidence in it that supports its position.
again, crickets.
this is the real fatal flaw in boskin reasoning:
"Consumers respond to price changes by substituting away from products that have become more expensive and toward goods whose prices have declined relatively."
on it's face, this seems obvious and logical, but it's actually mostly untrue as it assumes that causality flows only one way and that price moves are supply or exogenously driven.
when price rise due to increased demand, these weighting adjustments have the wrong sign.
there is absolutely no way for the BLS to tell if a price rise comes from reduced supply, increased demand, or just dollar debasement.
thus, they actually have no idea if price is driving quantity or quantity driving price.
this makes the whole geometric weighting notion fatally flawed.
it's even bigger nonsense than the quality adjustments.
M, we're tracking virtually 100%.
The only things I can add are that the main fault with CPI for me is that it changed away from being a Cost of Living Index and actually measuring inflation, and much less importantly that it attempts to account for hedonics without dealing at all with its counterpart - when quality or usability or whatever drops substantially, airline seats being just one.
Well, there is one other. Folk who talk about how much better TVs or cars or computers are today completely avoid negative value judgements about them (much higher costs of repair and maintenance and insurance for cars as a few examples) and also that those features are unwanted or unneeded by many - and that there is zero choice about paying more for them.
Government in the business of value judgments is anathema.
Some people aren't interested in economic proof inflation is much closer to zero than 10% (which I've shown many ways).
Afterall, what does economics have to do with inflation?
And the economy is dynamic. The severe housing or financial crisis wasn't inevitable with appropriate economic policies.
Also, a milder recession or a V-shaped recovery could've been achieved (I predicted Obama would be an economic disaster in Jan '09, although I underestimated the damage).
"if a manufacturer finds a way to make the same product (same quality) for less but sells it at the same price.....
how is that represented ?"
That is represented as higher profit. Is that what you're asking?
"and
the manufacturer makes what appears to be the same product but constructed of cheaper, lower quality materials - but sells it for the same price....
how is that represented?"
That is represented as higher profits.
"it appears to me the former is increased productivity...."
The lower costs are due to increased productivity.
You said the second product appeared to be the same. If the inferior materials don't reduce consumer satisfaction with the product, the lower costs are due to increased productivity.
If consumer satisfaction or utility of the product decreases, then it's really a different product.
Most often reduced costs result in lower consumer prices as businesses seek to increase or maintain market share against competitors. This is a good thing.
"and the latter is basically inflation...."
Inflation is an increase in the money supply in excess of the demand for money.
PeakTrader: "The inflation bias is some people screaming inflation, while silent on disinflation and deflation."
Yeah, PeakTrader i agree with you on this. If I could find lots of quality economic research showing that CPI is understating price levels, I'd give these screamers a little credence. But the economists I respect have said just the opposite: that CPI is overstating price levels and has been for quite a while.
bart-
"
The only things I can add are that the main fault with CPI for me is that it changed away from being a Cost of Living Index and actually measuring inflation, and much less importantly that it attempts to account for hedonics without dealing at all with its counterpart - when quality or usability or whatever drops substantially, airline seats being just one."
yup.
and worse, it actually defines progress (a better iphone at the same price) as deflation and then drives policy makers to shape monetary policy to counter innovation. thus we get "price stability" in iphones and wild jumps in things like oil, food, and rent that are not driven by moore's law.
david is an old frind of mine. did you read his speech from grants?
i suspect you'll like it.
http://www.huffingtonpost.com/david-einhorn/fed-interest-rates_b_1472509.html
jet-
you're a smart guy.
have you ever actually read the boskin report?
i really recommend you do when you have some time.
it and the economics arguments based off of it are so deeply flawed in methodology and assumption as to make current cpi a morass of unknowns, subjective bias, and glaring weighting errors.
the whole boskin argument is devoid of empiricism.
if you read that report and still feel as you do, i will respect our difference of opinion, but i suspect reading it might be a real eye opener for you. it certainly was for me.
it's a political document, not an economic one.
also note:
there are lots of folks on the CPI understates inflation side as well. some of the worlds biggest and most successful investors (einhorn, bill gross,) and some of it's most knowledgeable and effective inflation experts (volcker, etc)
the fact is that CPI has changed. it is no longer an inflation index. it's a "cost of living" index. it does nto measure price moves, it measures "the cost to eat" etc and assume that you are just as happy eating choice flank steak as you were eating prime ribeye.
it cannot tell demand drive price moves from supply drive ones and treats both the same in terms of weighting quantities when the 2 actually have opposite signs.
it treats innovation as deflation.
i'm not trying to be snarky, i'm asking an honest question: have you ever actually worked through how the methodology works yourself?
i think it's a worthwhile exercise.
have you compared the weightings for healthcare and rent to the actual economy?
this is one of these issues it's easy to sort of go with the flow on, but if you really pull the issue apart, that becomes all but impossible (or, at least, it did for me).
eg:
For less-than-satisfactory reasons, the BLS only weights health care at 6.5% of the CPI, although it represents 17.6% of the total GDP. That's a big problem, because health care is the biggest and most consistent source of inflation over the years.
A big portion of the underweighting of medical care can be attributed to a single category: health insurance, which stands at just 0.49% of the total CPI reading, or less than half a percent.
According to the BLS, the average family is projected to have a total exposure to rising health insurance premiums at a rate of only 0.49% (out of 100%). Given a median family income of $49,077 (the 2009 value), this means that the BLS assumes that the average family contributes just $239 dollars per year towards their health care insurance premiums
jet-
you're a smart guy.
have you ever actually read the boskin report?
i really recommend you do when you have some time.
it and the economics arguments based off of it are so deeply flawed in methodology and assumption as to make current cpi a morass of unknowns, subjective bias, and glaring weighting errors.
the whole boskin argument is devoid of empiricism.
if you read that report and still feel as you do, i will respect our difference of opinion, but i suspect reading it might be a real eye opener for you. it certainly was for me.
it's a political document, not an economic one.
also note:
there are lots of folks on the CPI understates inflation side as well. some of the worlds biggest and most successful investors (einhorn, bill gross,) and some of it's most knowledgeable and effective inflation experts (volcker, etc)
the fact is that CPI has changed. it is no longer an inflation index. it's a "cost of living" index. it does nto measure price moves, it measures "the cost to eat" etc and assume that you are just as happy eating choice flank steak as you were eating prime ribeye.
it cannot tell demand drive price moves from supply drive ones and treats both the same in terms of weighting quantities when the 2 actually have opposite signs.
it treats innovation as deflation.
i'm not trying to be snarky, i'm asking an honest question: have you ever actually worked through how the methodology works yourself?
i think it's a worthwhile exercise.
have you compared the weightings for healthcare and rent to the actual economy?
this is one of these issues it's easy to sort of go with the flow on, but if you really pull the issue apart, that becomes all but impossible (or, at least, it did for me).
eg:
For less-than-satisfactory reasons, the BLS only weights health care at 6.5% of the CPI, although it represents 17.6% of the total GDP. That's a big problem, because health care is the biggest and most consistent source of inflation over the years.
A big portion of the underweighting of medical care can be attributed to a single category: health insurance, which stands at just 0.49% of the total CPI reading, or less than half a percent.
According to the BLS, the average family is projected to have a total exposure to rising health insurance premiums at a rate of only 0.49% (out of 100%). Given a median family income of $49,077 (the 2009 value), this means that the BLS assumes that the average family contributes just $239 dollars per year towards their health care insurance premiums
Peak: "Why should the BLS provide a huge amount of math that few people understand?"
Why shouldn't they? Those people who you think don't understand it are paying for it.
"Some people will do what they do now with information. Pick less than 1%, ignore the rest, and come up with ridiculous conclusions."
Then it makes no difference, does it.
Except that the credibility of the BLS would improve.
Do you favor government secrecy?
"Top mainstream economists are experts in both math and econ. So, they're the ones to ask about the BLS."
Top mainstream climate scientists are experts in both climate and science. So, they're the ones to ask about the climate.
and worse, it actually defines progress (a better iphone at the same price) as deflation and then drives policy makers to shape monetary policy to counter innovation. thus we get "price stability" in iphones and wild jumps in things like oil, food, and rent that are not driven by moore's law.
The old saw about "We're from the government, and we're help to help you" sure does come to mind.
Overall, Jet and PT etc. continue to avoid anything inconvenient (and even apparently refuse to read or acknowledge the actual facts in Boskin report as I quoted that actually prove that at least the BLS *knows* that the CPI doesn't measure actual apples to apples cost of living inflation well - good grief, talk about ostrich mode!), and continue to pretend that all the facts (primarily medical & OER housing issues and Boskin "additions") and charts and actual government statements and links don't exist - especially about how seniors on SS show purchasing power drops pretty much every year.
Sure there are some economists that believe the CPI is too high
Very inconveniently for them, the huge majority of those economists missed the dot come bubble, the housing bubble and the financial crisis... really great "authorities". /sarc
david is an old frind of mine. did you read his speech from grants?
i suspect you'll like it.
Yep, sure did - really insouciant analogy with jelly donuts. -g-
Ron H. said
Peak: "Why should the BLS provide a huge amount of math that few people understand?"
Why shouldn't they? Those people who you think don't understand it are paying for it.
"Some people will do what they do now with information. Pick less than 1%, ignore the rest, and come up with ridiculous conclusions."
Then it makes no difference, does it.
Except that the credibility of the BLS would improve.
Do you favor government secrecy?
Peak is on the run big time, and is barely able to find straws to latch onto.
Good one on how he apparently really believes in government secrecy.
bart: "Yep, sure did - really insouciant analogy with jelly donuts. -g-"
Hold on a second.
Let's see: ...insooth...insorption...insouciant!
OK, got it. Carry on.
Please try to use smaller words in the future. :)
bart: " the huge majority of those economists missed the dot come bubble, the housing bubble "
I don't think that's correct. Not sure I can prove you are mistaken, though. I read many essays and blog posts by economists who pointed to the housing bubble. I also remember many financial analysts - mostly older ones - who cautioned investors about the dot.com bubble.
morganovich: 'the BLS only weights health care at 6.5% of the CPI, although it represents 17.6% of the total GDP. That's a big problem, because health care is the biggest and most consistent source of inflation over the years."
I thought we had this discussion about healthcare and the CPI before.
Healthcare is not nearly 17.6% of consumers' direct expenditures. The costs of healthcare are, for the most part, born by the corporations who provide health insurance for their employees.
CPI should only measure prices which are directly paid by consumers.
As I see it - as I understand the purpose of a CPI - weighting healthcare at 17.6% in the CPI would be a very big problem.
Healthcare is not nearly 17.6% of consumers' direct expenditures. The costs of healthcare are, for the most part, born by the corporations who provide health insurance for their employees.
CPI should only measure prices which are directly paid by consumers. "
alternative consideration.
the cost of health care even to employers is going up - and that in turn results in whatever productivity increases going to pay for employer health care and not to employees whose wages are flat because of that.
so inflation of health care costs even if paid for by employers - directly affects the buying power of the employees who might have increased wages to buy more stuff/mitigate inflation if they had those increased wages instead of them going to pay for increased health insurance costs paid for by the employer.
wrong?
Larry G,
I agree that workers would receive higher pay if healthcare costs were not so high. So workers' paychecks are likely lower. But that's irrelevant to a calculation of CPI. CPI should measure prices consumers pay. It does not measure compensation they receive.
Some health care costs are passed through to consumers in the form of higher prices. For example, the price of automobiles are likely higer than they otherwise would be because of the cost of health care to the automobile manufacturer. But those higher automobile prices are already included in the CPI.
Please try to use smaller words in the future. :)
How about "It was gosh darn gud"? :)
morganovich: "if you read that report and still feel as you do, i will respect our difference of opinion"
So far, I've only read Boskin's and other authors' explanations of the report. If I can find time to read the report itself, I will.
Economists I respect have written that the CPI overstates inflation, and provided good explanations for their opinions. I cannot read all studies, so I often have to rely on the opinions of scholars and experts I trust.
FWIW, I also respect your opinion even though we disagree.
JB: Not sure I can prove you are mistaken, though.
I know you can't. The economists who can't see that CPI does not measure real inflation (or most anyone who can't read that the BLS admits it in the Bosking report, and many other places) are the same ones that blew it on dot com, the housing bubble and the financial crisis.
I thought we had this discussion about healthcare and the CPI before.
Healthcare is not nearly 17.6% of consumers' direct expenditures. The costs of healthcare are, for the most part, born by the corporations who provide health insurance for their employees.
CPI should only measure prices which are directly paid by consumers.
As I see it - as I understand the purpose of a CPI - weighting healthcare at 17.6% in the CPI would be a very big problem.
Yes, we had this discussion before and you not only never dealt with the main issues (health care is *only* used by humans, and someone else paying for your or others medical services does not mean they are free and not paid by consumers ), but you also provided absolutely zero rebuttal other than a bogus blow off about wages or salaries being lower due to corporate or other payments. If corporations didn't pay, the medical care percent of CPI would be WAY higher and much closer to the 16%+, rather than the ridiculously low 7%.
But those higher automobile prices are already included in the CPI.
Along with bogus hedonic values, and without counter balancing reverse hedonics to account for much higher repair costs, higher insurance costs etc.
CPI should only measure prices which are directly paid by consumers.
In other words, if someone else pays for it, it has nothing to do with total inflation. *OMG*
From the Boskin report:
While the CPI is the best measure currently available, it is not a true cost of living index (this has been recognized by the Bureau of Labor Statistics for many years).
STILL, no response - nothing but crickets.
Economists I respect have written that the CPI overstates inflation
I've linked my own work, BLS links and facts, other economists, Boskin... but we still have nothing from you or PT other than assertions.
Same with what has happened to seniors on SS and how their purchasing power drops virtually every year since CPI is not inflation. No response, nothing but the sound of crickets.
"How about "It was gosh darn gud"? :)"
Much better! :)
Thanks for the grins Ron, great change of pace... and calms the savage beast within too. :)
Bart - morganovich:
I remember the previous discussion of this topic, and I still have the same problem with it I had then, as does Jet.
Let me state the things I know and things we likely agree on, then my conclusion, then you are free to correct me.
- The term "healthcare" includes all expenditures on medical treatment including insurance.
- Yes, that amounts to 16% of GDP. (or pick any number you prefer)
- ALL costs are ultimately born by individuals as consumers or taxpayers, therefore individuals ultimately pay for all healthcare costs.
- The purpose of the CPI is to account for what consumers pay directly for goods and services, thus the name Consumer Price Index.
- The CPI figure of 7% (pick your own % if you prefer)is obviously much lower than the 16% total.
- The difference between 16% and 7% and is paid on behalf of individuals by corporations as employers, and by government.
- That cost of employee healthcare is included in the price of goods and services, as is every other cost to producers.
- Individual consumers of those products and services indirectly but most certainly pay those healthcare costs.
- Individual taxpayers indirectly pay all government costs for healthcare.
If you added the 7% direct cost to consumers, plus the amounts paid by individuals as taxpayers, and all the little pieces of healthcare imbedded in the price of goods and services that ARE paid for directly by consumers you would have a total of 16%.
You argued that CPI is not accurate, and I agree completely.
Jet pointed out that part of the cost of a new car is employee healthcare costs, and you argued that the hedonic adjustments and geometric weightings are bogus, something there is no disagreement on. But, you didn't address Jet's point.
Why do you believe the CPI should directly assign all healthcare costs to consumers? Even though they ultimately pay all costs, they don't do so directly.
Why not break out other components of the final cost of goods and services, such as labor or raw materials, or finance costs?
"Thanks for the grins Ron, great change of pace... and calms the savage beast within too. :)"
Yeah, these discussions should be fun as well as contentious and informative.
The purpose of the CPI is to account for what consumers pay directly for goods and services, thus the name Consumer Price Index.
That's one of the primary disagreements. CPI does NOT represent real changes in purchasing power (aka, inflation), and even the BLS admits it in the Boskin Report that I've quoted at least three times now.
If a real Cost of Living Index (aka, that measures real changes in purchasing power) was used for adjusting SS payments to seniors instead of the *way* too low CPI-W, then you wouldn't see seniors on SS losing purchasing power virtually every year.. and many having to "eat cat food".
In other words, by literal admission of the BLS etc., CPI does NOT measure true inflation and a *real* cost of living index (i.e., with no changes in standard of living).
Why didn't you bring that up? Neither Jet nor PT has ever addressed it (SS and seniors), even indirectly to the best of my knowledge. It's the primary issue with the problems with CPI.
If anyone wants all the hedonic etc. bias and crud left in the CPI, fine with me - as long as we have a parallel index that works and is calculated the way it used to be - pre OER, and pre 'ignoring Medicare' etc.
Jet pointed out that part of the cost of a new car is employee healthcare costs, and you argued that the hedonic adjustments and geometric weightings are bogus, something there is no disagreement on. But, you didn't address Jet's point
Fair enough, although I did answer much of it with the hedonics comment. Health insurance today does not cover anywhere near what it used to cover - higher deductibles, slower service, unnecessary tests etc. I'm sure you can think of others.
Also, for the BLS to have medical costs partly represented in airline tickets, food prices, cars, etc. etc. presents a very false and misleading picture - ESPECIALLY on the part that is not covered by corporations, like Medicare.
Primarily though, Medicare and similar costs are completely missing in any of the BLS work - and the proof is in that gigantic 7% to 16% difference... as well as the study from CMC.
Same with the absolutely gigantic debt growth over (especially) the last 10 years, part of which as you note has been used to pay for medical and Medicare, etc. That's *completely* missing in BLS medical figures, as noted above.
In other words, it's false that "Individual taxpayers indirectly pay all government costs for healthcare." - it can take decades for those costs to truly be paid, which yet again is false reporting by the BLS.
(continued)
Why do you believe the CPI should directly assign all healthcare costs to consumers? Even though they ultimately pay all costs, they don't do so directly.
I think I've covered that above, especially in how the current system hides the actual costs. Medical costs *only* apply to humans, not corporations.
I am very much not, and never have been, in favor of statistics that are so heavily biased so as to present a very false and incomplete picture.
Why not break out other components of the final cost of goods and services, such as labor or raw materials, or finance costs?
Fine with me, but I'd prefer to start with the BLS being truly open with what they're actually doing right now - in painful detail.
From all my work & experience in dealing with BLS and CPI info, and excluding hedonics, geometric averaging, substitution, medical and housing, the BLS seems to do an ok job - just in case someone thinks that I believe that they don't sometimes do a good job. Probably the huge majority of their employees are trying to do a good job, but "politics" has intervened... and it started way back in the 60s with LBJ.
As an aside, but still extremely illustrative, where the hell are taxes represented in the CPI? It's a direct cost paid by consumers, especially income and sales tax - but is nowhere to be found. Yet another "convenience" on the part of the CPI calculation and something that neither JB nor PT have even vaguely accounted for or mentioned, but it is right there on my CPI lies page and has been there for literally years.
The government is the biggest business in the whole country by far (33-50% of GDP, depending on what's included), but as far as the CPI is concerned it doesn't exist.
That's well beyond "special", and yet another example of how the CPI is bogus.
By the way, total private health insurance is only about 28% of grand total health expenditures, best I can tell.
Bart
OK, thanks. I see that a good part of my problem was failing to account for government medical payments, since taxes aren't included in CPI.
I still maintain that all taxes are paid by individuals - eventually.
"Medical costs *only* apply to humans, not corporations."
Obviously, although corporations may act as agents for their employees by collecting some of their coverage costs from customers who buy their products. :)
"Why didn't you bring that up? Neither Jet nor PT has ever addressed it (SS and seniors), even indirectly to the best of my knowledge. It's the primary issue with the problems with CPI."
I thought it was pretty obvious, something that everyone understood, and it had no direct bearing on my question.
"From all my work & experience in dealing with BLS and CPI info, and excluding hedonics, geometric averaging, substitution, medical and housing, the BLS seems to do an ok job -"
Heh. Except for all the things wrong with CPI, it's not all that bad.
OK, thanks. I see that a good part of my problem was failing to account for government medical payments, since taxes aren't included in CPI.
Bingo.
I still maintain that all taxes are paid by individuals - eventually.
Sort of. The lags can be atrocious though, and that biases the CPI greatly.
Obviously, although corporations may act as agents for their employees by collecting some of their coverage costs from customers who buy their products. :)
Yes indeed, :)
And my answer was partly addressing why I believe that if it's a medical cost, it should be attributed to the medical category
I thought it was pretty obvious, something that everyone understood, and it had no direct bearing on my question.
It sure is obvious to many or hopefully most, but I do still question their lack of any response to the SS and seniors issue.
Heh. Except for all the things wrong with CPI, it's not all that bad.
Who me? A sarcastic comment without a "/sarc"...
baret and morganovich,
The CPI is an index of prices for consumer goods paid directly by consumers. That has always been the purpose. The CPI is not a cost of living index, even though many parties misinterpret it that way.
The BLS explicitly states that income and payroll taxes are not included in the index, that such taxes never have been included in CPI-U, and that inclusion of such taxes would alter the purpose of the CPI-U.
Sales taxes are included in the CPI-U. Property taxes are included in that they are assumed to be included in property rents.
If you want to argue that a new COLA index which includes taxes, that's fine. Argue away. But please do not criticize the calculation of the CPI-U because it does not include taxes. If you believe it should include taxes, then you do not understand the purpose of the CPI-U.
bart: "And my answer was partly addressing why I believe that if it's a medical cost, it should be attributed to the medical category"
Not in the CPI-U. Not if it is not directly paid by consumers.
Again, the CPI-U is an index to measure the prices of goods and services paid for directly by comsumers. It has always explicitly excluded wages, benefits paid for by employers and government. It will include only the cost of insurance directly paid by consumers - and intentionally exclude insurance paid for by employers.
If you believe that the CPI-U should include items not paid for directly by consumers, then you are arguing that the CPI-U should have a different purpose than it has had for it's entire existence.
The CPI is an index of prices for consumer goods paid directly by consumers. That has always been the purpose. The CPI is not a cost of living index, even though many parties misinterpret it that way.
100% false. The CPI used to be and was designed to be a Cost of Living Index. Look it up yourself, you don't know your history.
It was changed for political reasons to make it look better. Look up what LBJ used to do when presented with numbers that were "too high", it's documented - just exactly like the facts I keep posting and you and PT keep ignoring.
The CPI does *not* reflect inflation, but if you want a BS stat that follows politically based Orwellian based interpretations, and sort of follows what consumers do as their standard of living drops (hedonics, substitution and all the rest of the horse puckey), be my guest.
And if your really think that OER fairly reflects what consumers actually pay for housing, I have some ocean front property in Idaho I can sell you.
Again, the CPI-U is an index to measure the prices of goods and services paid for directly by comsumers. It has always explicitly excluded wages, benefits paid for by employers and government. It will include only the cost of insurance directly paid by consumers - and intentionally exclude insurance paid for by employers.
"We've always done it that way, why should we change?" is and always has been the continuing wail of the ineffective, misguided and others who refuse to see a full picture... and those who refuse to even do basic fact checks on what the CPI originally was, and its original/real purpose.
"Funny" how you say that prices of goods and services paid for directly by consumers, and then follow it up by refusing to note that taxes are paid directly by consumers. Is there anything else that's not in CPI that's paid by consumers? (hint: yes)
If you believe that the CPI-U should include items not paid for directly by consumers, then you are arguing that the CPI-U should have a different purpose than it has had for it's entire existence.
100% incorrect, and repeating it doesn't make it true. Look it up, your command over historical facts is very poor.
And not including some direct payments means that it hides huge amount of spending and provides everyone with false data, so they can't possibly see what's really being spent or what's really going on - for many decades.
Bart,
From the BLS explanation of the CPI
"The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. The Bureau of Labor Statistics (BLS) has for some time used a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain "utility level" or "standard of living." Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing, that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this to also take into account changes in other governmental or environmental factors that affect consumers' well-being."
The CPI-U does not include income and payroll taxes, and, as far as I can determine, never has.
If you have any evidence supporting your assertion that BLS ever intended CPI tobe a complete cost of living index, please provide such evidence. I will ignore any further requests to "look it up yourself".
Jet, do you really not know that the CPI goes back to 1913 (technically one could also say during WW1, or even use 1919 as a start, but the actual index goes back to 1913) when federal and state taxes were virtually non existent, and that neither SS nor Medicare existed at all?
Is there seriously any doubt about why they weren't originally included?
Lastly, I await the results of your historical research that will show that CPI originally was about a fixed basket of goods and services, which measured a fixed standard of living, and that you're incorrect.
It didn't include horse puckey concepts like substituting chicken for beef when beef prices increased a bunch, thereby masking declines in standards of living.
This comment has been removed by the author.
If you have any evidence supporting your assertion that BLS ever intended CPI tobe a complete cost of living index, please provide such evidence. I will ignore any further requests to "look it up yourself".
As I've said numerous times, it (amongst many other things that have changed) used a fixed basket of good and services - which by definition did not fiddle with the standard of living concept.
Your quote could not possibly address that issue because it describes what the BLS *currently* does.
At least you now implicitly agree that the CPI does not reflect a stable standard of living per "A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain "utility level" or "standard of living.", etc.
That's slight progress.
And of course the CPI does not include income and payroll taxes - that's my point! You say that it should include all direct payments, but then say it *shouldn't* include taxes, which are literally direct payments by consumers. Can you not see that your view is even slightly biased and not logical?
I also note that neither you nor PT will comment on the lack of reverse hedonics in the CPI, while approving of hedonics.
It's quite "interesting" that you completely refuse to follow up on the fixed basket of good & services issue, aka do actual and real full historical research on how the CPI has changed, but implicitly assert that the current methodology of the BLS closes the issue.
Come on man, get real!
bart,
Apparently you are not going to provide any evidence to support your assertion - the assertion that the federal government intended CPI-U to be a cost of living index. The BLS website explicitly states that CPI-U is not a cost of living index.
I see no point in discussing this with you further. As far as I am concerned, your assertions about the intent of others are not facts.
I see no point in discussing this with you further. As far as I am concerned, your assertions about the intent of others are not facts.
I'm somewhat glad to see you have given up and conceded, and know that my statements about the fixed basket of goods issue (as in a consistent standard of living) are true.
Otherwise, you'd be able to prove me wrong with links (other than the statement from the BLS site about their *current* methodology, which I have not disputed at all - OF COURSE that's what's going on NOW, but the point is about the past).
I keep posting links and facts, and you have changed some of your opinions... but the moment I encourage you to actually look at the 100% verifiable data about the way the BLS used to use a fixed basket, you reject it and then implicitly admit that I'm correct by a continuing refusal to look - even after the strong hint about where to look.
I encourage anyone else to actually *look*, and see if I'm correct or not.
One more time, just so that there's zero doubt about the basic issue.
I'm talking about the PAST, not what the BLS is doing NOW.
bart: "I keep posting links and facts, and you have changed some of your opinions"
Sorry, but you've not changed my opinoion about anything.
I see no links posted by you on this thread.
The only thing I have conceded is that discussing this topic with you is a waste of my time.
Nice job, continuing to run & hide from facts, and categorically refuse to simply *look* at the past, the fixed baskets of goods concept, and what the CPI used to be.
Continue digging yourself deeper if you must, and refuse to do the most basic of research.
Perhaps someone else will help you out and actually link to the many easily locatable references that prove my point. Real education and historical facts do make a difference.
In the meantime, it's obvious that you continue to implicitly concede my points, especially about the CPI definition changes.
I see no links posted by you on this thread.
LOL, that's rich... and lame.
Are you actually admitting that you have seen no links or other facts etc. that I've posted, and have not even looked at all the proof on my site?
Bart
Not sure why this is such a contentious issue. You appear to be arguing points other than the one Jet is making, which if I'm not mistaken, is that CPI measures only things that consumers spend their take-home pay on. That would exclude employer paid benefits and taxes.
Do you not agree with that?
Whether it SHOULD measure other things is a different subject.
Whether CPI is useful, is a matter not being argued here. In my opinion, it's not very, because of hedonic adjustments - subjective values that can't possibly be quantified - and geometric weighting that assumes all price changes are driven by supply, when that is obviously not true.
Other than that, it does a fairly good job. :)
I think everyone agrees that CPI was calculated differently in the past, and may have had different purposes, but it's not clear why that matters to the current discussion about CPI as it exists now.
Are you lamenting that it has changed over time? Me too, but it is what it is, and we can each decide for ourselves how useful it is.
I think everyone agrees that CPI doesn't include all medical costs, and isn't intended to, as it includes only direct expenditures by individual consumers. If you want all medical costs included you are asking for a different report.
Jet is correct about the links. The only link you have posted on this thread is to your own used car index.
And, while I'm not questioning the information on your site, if I were disagreeing with you, I think I would expect links to independent sources as well.
Bottom line: CPI *doesn't* include all medical costs and isn't intended to. Direct payments by individuals are included, as are the indirect costs paid by employers that are imbedded in the goods and services consumers buy. Goverment payments from taxes are not.
I could just as easily say that Jet is arguing points that I'm not making.
If you don't know my opinion on all the CPI issues, I have zero clue on how to make it any clearer.
ALL I'm saying, at root, is that it is way too low. Just because it's designed that way is a point that Jet and PT refuse to see - and the fact that it's designed that way is why it is way too low.
It's literally astounding to me that neither of them get it, and every attempt to bring up OER or medical or Boskin stuff leads to inapplicable responses - or no responses at all, like on reverse hedonics or SS recipients (you excluded on those).
It is as if I designed a statistic to mislead people or incompletely/falsely state conditions (intentionally or not), and when some one pointed it out, my answer would be that that's the way it's defined and therefore is right - regardless.
There is not one question or comment that anyone has made that I haven't directly addressed, to the best of my knowledge.
The OER issue has even been totally blown off, and that's so easy to prove how far off it is (via comparison to Case Shiller etc. numbers) that I didn't think it was even vaguely necessary.
As far as why the entire issue is very important, you honestly completely lost me. If real inflation is 10% and the CPI states it is 5%, that's not extremely important?
Apparently there are too many folk on this forum with fixed ideas who are unwilling to look at truly major issues and lies.
I get criticized for not posting charts and links here on this particular thread, when I've posted them multiple times in the past???
And I have a page covering CPI w/o lies, along with a glossary of links and definitions, and many other charts (some linked here and some not), and those are all ignored as if they're not there???
And then you and Jet question the lack of links on this thread? - and then wonder why I've been contentious?
And what about the many times I've asked Jet or PT for links, and have gotten absolutely nothing - the most recent one asking for names and links to the economist who think the CPI is too low, and who did not miss the dot com bubble, the housing bubble and the financial crises, etc?
Apparently it literally makes little to zero difference that the CPI misleads the huge majority and severely understates inflation, as I've documented and proven in depth... and including many quotes and links over the weeks.
And it's all justified via "that's the way we've always done it", when even that is 100% false - as is proven by the BLS having used a fixed basket in the past.
Is there literally no one who has actually looked at previous methodologies of the CPI (as in a better attempt then now to measure changes in standards of living, and only partially shown in Boskin), and considered the political and misleading etc. issues?
It honestly reminds me of folk back in the 60s who didn't believe that the Pueblo was a set up, or that the Pentagon Papers were fake or whatever.
Wow! Bart, you have demolished a number of strawmen with your last comment. :)
I don't have the energy to respond to every line, so I'll just summarize my position, then offer opinions.
Every complaint you have about the CPI - and I mean EVERY complaint - I totally agree with, except 1.
By the way, my understanding of CPI has come from reading many previous comments by morganovich, so if you want to know my take on it, read his comments. He writes much better than I do.
The one exception is your assertion that CPI should measure all medical costs as if they were paid directly by consumers. That CPI DOESN'T measure total medical is a given. No other cost to consumers is broken out of final goods and services, and if they were, you would have a different report.
Maybe it could be called PPI, or something weird like that. :)
As to providing links and support, it is unreasonable to expect that other readers will have read your previous comments on other threads, and followed your links. You may find it necessary to provide supporting links on each thread.
Your abrasive style, which doesn't bother me, might be off-putting to other readers who would prefer a more respectful discussion. Whether you want to actually communicate with others is, of course, up to you.
Wow! Bart, you have demolished a number of strawmen with your last comment. :)
Glad to hear it. That was part of my intention. Jet's and PT's "style" do include a lot of tricks like strawmen and red herrings, as well as ad hominems.
Every complaint you have about the CPI - and I mean EVERY complaint - I totally agree with, except 1.
Cool.
By the way, my understanding of CPI has come from reading many previous comments by morganovich, so if you want to know my take on it, read his comments. He writes much better than I do.
I sure do read all his comments. He seems quite able to see the nose in front of his face, and think with the data as opposed to "reacting" or toeing an MSM (or whatever) "party line" without doing any actual research.
The one exception is your assertion that CPI should measure all medical costs as if they were paid directly by consumers. That CPI DOESN'T measure total medical is a given. No other cost to consumers is broken out of final goods and services, and if they were, you would have a different report.
I thought you agreed that all medical costs *were* eventually paid by consumers? I'm quite unsure of where the disagreement is.
Certainly Jet agreed that health insurance was totally paid by consumers when all data was added (although since he has conceded and run away, he's hardly a factor any more).
By the way, the BLS health insurance index and costs are headed for the roof! The last 4 months have increased YoY at 14%.
There's no inflation at all. /sarc
All I'm saying is that it would be my preference to *add* in another category that covers *all* of medical, and most specifically one that includes Medicare and related items. It's not even necessary to change anything else - just add the category, even as a "memo item". The current one is very much false and misleading.
Maybe it could be called PPI, or something weird like that. :)
I did give a great deal of thought to naming my work CPI w/o lies, even though it would be better and more accurately named as a purchasing power index.
"CPI w/o lies" is controversial and probably aggravates some people, but when such a key and important stat like CPI that affects literally every one has bogus data, incomplete data, spun data etc., I just can't go into kinder and gentler mode.
They are lies, by literal dictionary definition and I'm just calling it the way I see it. And again, I'm not accusing the huge majority of folk at the BLS of being liars. It's all at the top (or above the BLS), best I know and can tell.
(continued)
As to providing links and support, it is unreasonable to expect that other readers will have read your previous comments on other threads, and followed your links. You may find it necessary to provide supporting links on each thread.
I probably should put together a new page that contains at least the bare bones, even before I publish what will likely be a blockbuster article in the whole area.
But I do point out that Jet, PT, etc. do mostly refer to stuff that they've supposedly said before, but refuse to link or re-state -- and also refuse to debate the points after I rebut or smack them all down. And Jet won't even quote his so called economist sources, after at least three requests.
Your abrasive style, which doesn't bother me, might be off-putting to other readers who would prefer a more respectful discussion. Whether you want to actually communicate with others is, of course, up to you.
Abrasive is kind - I can actually be quite the *censored* and *censored*. :)
If they or others can't stand the heat and light of raw truth, then give up (as Jet has already done) - or as Truman said, "get out of the kitchen".
I may get kicked off the forum by Dr. Perry for it, but if so, not only do I hope he gives me a public warning with detailed specifics so I can at least have an opportunity to correct - but I also will know that I've given it my best shot.
If others are that uncomfortable with real facts and logic, then I don't belong here.
When someone is lying and has been for decades (like discovering a spouse has been having affairs), it is my opinion and approach that they don't deserve "kinder, gentler" treatment.
Just look at our discourse on this thread as an example of what I can easily be in a reasoned discussion where there are apparent disagreements. They've turned out to be (with 1 exception) nothing but missing data or simple misunderstandings.
And if I get attacked as Jet and PT etc., have, you can bet I'm going to respond. Or when Dr. Perry himself calls peak oil folk very *special* and negative names, that does something to set the tenor of the forum.
There's also the "gloom & doomer" accusatory phrase used by many. Were the people who were "gloom & doomers" in Rome in 300 or 400 BC correct? How about Weimar Germany "gloom and doomers" in 1920-1922?
My point is not that things like Wiemar of the fall of Rome will happen, but rather that calling someone *special* names when they are presenting facts and reasoned conclusions is very much inflammatory - and very much doofus.
And besides, it can be fun smacking others down even further into their own mud when they're unable to think or quote and link to what they think are incontrovertible facts and future events.
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