You: How much is this thing I need?
Cashier: It's $20.
You: But last year it was $15?
Cashier: Yes, but now it's cheaper because it's better.
You: But it's not cheaper. It's 33% more. It's $20.
Cashier: No, it's 50% better and $20.
You: What?
Cashier: Do you have an econ PhD sir?— Rudy Havenstein, wearing a jetpack near LAX. (@RudyHavenstein) June 14, 2018
Dealer: Yes, the car costs $10,000 more, but it has new safety features & a better stereo, so, after hedonic-quality adjustments, it's actually $1,500 cheaper than the old model.
You: Can I just buy the old model?
Dealer: No.
You: But my income didn't get hedonically-adjusted.
— Rudy Havenstein, wearing a jetpack near LAX. (@RudyHavenstein) July 30, 2020
If the Fed wants their model of inflation to be higher, simply stop using the BLS' ridiculous hedonic adjustments, goofy weightings, odd substitutions and outright replacement methodologies they've thrown in since the 1990's.
You'll get 6% or 8% CPI real quick.@federalreserve pic.twitter.com/DgkrEGEFU6
— Rudy Havenstein, wearing a jetpack near LAX. (@RudyHavenstein) August 25, 2020
