> Right. I am referring to all those who want to know only this, along with everyone else.
"along with everyone else" is incorrect, because you have no way of knowing what other people want (and worse, maybe no way to know that). And the only way you "know" what "all those who want to know only this" is because it is a tautology, it is necessarily true. Though, you have no way of knowing what percentage of the population thinks like you do, so it is not particularly informative knowledge.
> Because those who want to know something else would use another measure.
Some people (me) would like to see all methodologies maintained indefinitely on a chart, so we can see how different versions of The Truth vary over time. I am interested to see if changes in methodology tend to correlate with changes in the "vibe" of the cost of making ends meet people are experiencing. I prefer this approach because it is more transparent, and because I do not trust my government, or the perceptions of my fellow Westerners (because of the way they think: how it "is", is how it seems to be....which tends to correlate quite nicely with how it is said (repeatedly) to be).
> Those complaining that inflation doesn't give you some other economic indicator is like someone complaining that temperature is not a good measure of distance.
It is also "like" someone whining about how appliances don't last as long as they used to, but "is likes" are often more misinformative than informative (perhaps why they are so popular?).
> Well... duh.
Are you blaming others for the way you think?
> Absolutely. Which is why we have many different ways to look at inflation.
And also why I do not want historic "truth discovery" methodologies memory holed.
> In fact, don't White House economists use 30-some-odd different measures of inflation throughout the course of their work?
Don't know, but I do not trust them.
Also, "in fact" terminating with "?" is a rather interesting approach.
> But eventually you are going to want to put it to practical use, mathematically, and our formulas require a single number.
Maybe we should get better formulas, because reality does not fit so nicely into simple, reductive, misleading models.
> CPI is the one we picked to standardize on
No, "we" did not pick it, someone else picked it "on our behalf"...according to "democracy" we are trained to believe, though it is not both flawlessly true and not misinformative.
> (but, of course, you can choose another if you want).
I can't get it published as "fact".
> It won't be 100% accurate – determining that is fundamentally impossible and you know that going into it – but it will be good enough.
Good enough to satisfy people that want to be satisfied, but not good enough to satisfy all.
> No, "we" did not pick it, someone else picked it "on our behalf"
With a gun to your back, eh? We can use whatever source of inflation we want. Nobody is selecting for us. But, as it happens, CPI is the one we've chosen as the default. If we change our minds, we don't have to default to it forevermore. It's up to us.
> Are you blaming others for the way you think?
I don't think. You do enough of that for all of us. No need for me to duplicate efforts.
I relay the state of the world to the thinkers so they don't have to. The efficiency of specialization!
> Good enough to satisfy people that want to be satisfied, but not good enough to satisfy all.
Which, again, is why we have many sources of inflation. Pick a different one if need be. Indeed, there is good reason why there is more than one.
And if inflation isn't the right tool for the job, which is probably the case, use a different economic measure. There are many tools in the toolbox. You don't have to measure distance with temperature.
Let's be real, the only reason we talk about inflation at all is because it is shares a relationship with interest rates. Interest rates are what people actually care about here. As principal value declines with inflation that makes borrowing more attractive, thus interest rates need to compensate, thus a change in inflation rate serves as a useful leading indicator of interest rate movement. If it weren't for that, it is doubtful that anyone, economists and statisticians aside, would even know that inflation is a used measure.
Beyond interest rates, it doesn't mean much to Average Joe. Average Joe is more worried about things like cost of living. Inflation isn't meant to be useful to Average Joe, though, it is for economists who need to look at much more than Average Joe. Average Joe is free to use it if we wants, but it's funny when he starts complaining that it doesn't work right when misapplied.
People discuss inflation because everyone from the Economist to Yellen to the President brings up inflation numbers whenever people start feeling their COL increase, or when people demand better state services etc. It is one of the most widely publicized economic indicators, along with GDP, unemployment rate, and foreign debt.
But in many of these discussions, it is deliberately being presented as equivalent to COL, which is never addressed separately. So, in reality, for the vast majority of people who learn about these numbers from the media, not economics degrees, "inflation" actually refers to COL, except that the numbers they are given are the ones for what economists call inflation.
Given that a word is defined by what the majority of the people using it mean by it, I think inflation in common English is closer in meaning to COL than to the technical economics term inflation.
> it is deliberately being presented as equivalent to COL
It kind of is. That's what makes it confusing, I suppose.
If you buy a house of equal value as compared to 60 years ago, then the amount in dollars you will pay, when adjusted for inflation, will be equivalent to 60 years ago (within some margin of error; inflation is impossible to calculate perfectly). If we live exactly like they did in 1960, then inflation and the change in cost of living are the same thing.
But, people expect more today. As mentioned in several comments up-thread, take housing: They are bigger, safer, more energy efficient, more attractive, more comfortable, etc. Alongside that, the married family unit is quickly dying – people are more likely to be single nowadays, so we place more value on being able to live alone. Land is more valuable too. This is particularly noticeable anywhere near agricultural areas, where climate instability and more mouths to feed in the world has made food more valuable, making farmland more valuable, making urban sprawl out into the farmland more expensive. It goes on and on and on. So, even if the dollar was of constant value, you would unquestionably paying more for a house today as compared to in the past. But you're getting more! People are willing to pay more, in constant dollars, because it is worth it.
Only on the dollar side are you getting less. The so-called 'hidden tax'. This is what inflation tries to find. If you are a politician speaking to the people, especially on a national scale, this is the only thing in your control, the only thing that is relevant to you. People choosing to buy bigger and better things is not really of your concern. Why shouldn't someone be able to buy something nicer if they want to?
> Given that a word is defined by what the majority of the people using it mean by it
In the absence of any other definition, that is true. If a speaker defines a word, though, then that new definition takes force while they are speaking. And economists and the President have most definitely provided a specific definition for "inflation".
> I think inflation in common English is closer in meaning to COL than to the technical economics term
I'm quite sure the most common definition is "that single number they talk about on the news", which is equivalent to CPI, which is most definitely not a cost of living measure.
> We can use whatever source of inflation we want. Nobody is selecting for us. But, as it happens, CPI is the one we've chosen as the default. If we change our minds, we don't have to default to it forevermore. It's up to us.
a) Who, specifically, is "we" in this context?
b) What is your information source for these facts?
> Beyond interest rates, it doesn't mean much to Average Joe.
What is your information source for the meaning contained within the minds of the average Joe? Please be specific, please at least try to speak truthfully.
"along with everyone else" is incorrect, because you have no way of knowing what other people want (and worse, maybe no way to know that). And the only way you "know" what "all those who want to know only this" is because it is a tautology, it is necessarily true. Though, you have no way of knowing what percentage of the population thinks like you do, so it is not particularly informative knowledge.
> Because those who want to know something else would use another measure.
Some people (me) would like to see all methodologies maintained indefinitely on a chart, so we can see how different versions of The Truth vary over time. I am interested to see if changes in methodology tend to correlate with changes in the "vibe" of the cost of making ends meet people are experiencing. I prefer this approach because it is more transparent, and because I do not trust my government, or the perceptions of my fellow Westerners (because of the way they think: how it "is", is how it seems to be....which tends to correlate quite nicely with how it is said (repeatedly) to be).
> Those complaining that inflation doesn't give you some other economic indicator is like someone complaining that temperature is not a good measure of distance.
It is also "like" someone whining about how appliances don't last as long as they used to, but "is likes" are often more misinformative than informative (perhaps why they are so popular?).
> Well... duh.
Are you blaming others for the way you think?
> Absolutely. Which is why we have many different ways to look at inflation.
And also why I do not want historic "truth discovery" methodologies memory holed.
> In fact, don't White House economists use 30-some-odd different measures of inflation throughout the course of their work?
Don't know, but I do not trust them.
Also, "in fact" terminating with "?" is a rather interesting approach.
> But eventually you are going to want to put it to practical use, mathematically, and our formulas require a single number.
Maybe we should get better formulas, because reality does not fit so nicely into simple, reductive, misleading models.
> CPI is the one we picked to standardize on
No, "we" did not pick it, someone else picked it "on our behalf"...according to "democracy" we are trained to believe, though it is not both flawlessly true and not misinformative.
> (but, of course, you can choose another if you want).
I can't get it published as "fact".
> It won't be 100% accurate – determining that is fundamentally impossible and you know that going into it – but it will be good enough.
Good enough to satisfy people that want to be satisfied, but not good enough to satisfy all.