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257 comments on DrumBeat: April 29, 2008

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tstreet on April 29, 2008 - 10:50am Permalink | Subthread | Parent | Comments top

Conceptually, I have a problem with data that is adjusted because of the rise in the very commodity that is being measured. Adjusting the data is cold comfort if one's income can't keep up with inflation. For me, all of the increase in gas prices are "real". Reality bites.

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eastender on April 29, 2008 - 12:06pm Permalink | Subthread | Parent | Comments top

Sure. If your income didn't increase (or even decreased) in the period (say, over the last year) then you are experiencing the nominal price increase of 22% for gasoline and 45% for diesel (or even more if your income decreased / other expenses of yours incresed).

The table itself contains all the numbers, so you will find the nominal price increase there. It's just a question of which way you want to look at it.

If you look at it through the glasses of a US Gov inflation 'analyst', you will find an increase of 17% for gas and 35% for petrol. Should you be as 'optimistic' as to rely on shadowstat inflation data, you will arrive at a 10% for gas 30% for diesel figure, and if you go nominal it becomes 22% and 45%. You feel it even more if you earn less now than you did a year ago.

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eastender on April 29, 2008 - 11:18am Permalink | Subthread | Parent | Comments top

Conceptually, I have a problem with data that is adjusted because of the rise in the very commodity that is being measured.

I may not understand fully what you are trying to say. If that's the case, please let me know. It may be my fault. However, I think I've answered your 'conceptual problem' here in the original post:

In my opinion, the US Gov data is too low for inflation, and while the shadowstats data may be correct, it is largely influenced by fuel prices. So for determining the price increase % or the 'real value'of oil we should used 'mixed inflation data', somehwere between US Gov and shadowstats data. I'd say around 7-8% inflation if you exclude oil (fuel).

Did I get it right?

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tstreet on April 29, 2008 - 1:28pm Permalink | Subthread | Parent | Comments top

Eastender

I have no problem with what you have done and my conceptual problem has nothing to do with you or your analysis. I just think that the traditional focus on "real" increases can distort the reality to "real" people with incomes which are not keeping up. People look at "real" price increases and might think things aren't so bad after all. In addition, a lot of incomes are tied to the official CPI which apparently can't be trusted.

In fact, I think that the graphs you have put together over the last few days hae been great and provide a great service to those who read the comments on this board. Keep up the good work.

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r4ndom on April 29, 2008 - 1:45pm Permalink | Subthread | Parent | Comments top

Sounds to me like you might be happiest with a chart normalised to mean or median income rather than "inflation". Certainly I would like to see more analysis based on the income side.

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eastender on April 29, 2008 - 2:11pm Permalink | Subthread | Parent | Comments top

Good idea. I'm not sure where to find the correct data though. Any suggestions?

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r4ndom on April 29, 2008 - 2:21pm Permalink | Subthread | Parent | Comments top

I'd use this:
http://www.census.gov/hhes/www/income/histinc/incpertoc.html

Nice tables that include both baseline and "Inflation corrected" income numbers. I think the baseline numbers are the most interesting for this purpose.

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eastender on April 29, 2008 - 3:04pm Permalink | Subthread | Parent | Comments top

Thanks, I'll check it out. But I won't publish the results today, I have no intentions of hijacking this thread. ;-) I'll post the new numbers in a day or two, OK?

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r4ndom on April 29, 2008 - 3:10pm Permalink | Subthread | Parent | Comments top

No rush on my account, you're doing the work here.

Thanks for pulling these numbers together. Similar work has been done before, but each new visualisation gives a fresh opportunity for new ideas and insights.

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GreyZone on April 29, 2008 - 3:43pm Permalink | Subthread | Parent | Comments top

I would suggest that you post it on your blog then post a link to the relevant blog article here but TOD seems to vary widely on whether posting a link to your own writings is what TOD calls "blog whoring" or not. (NOTE: Researching the term "blog whoring" reveals that the apparent definition used by TOD is unique and not consistent with other use of the term.)

However, you really should get some feedback from the TOD "gods" as to whether you should do that or not.

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