Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Reply to @Investor: I'm saying prices for everything - not just medical and college - are rising at a noticeable rate over the recent short-term and the long-term.
Where prices are not rising, quality and quantity is down (less toilet paper but "now stronger", smaller boxes, smaller etc etc.) I don't exactly feel as if I'm alone in this opinion.
Additionally, as I noted above, I continue to encourage those who continually say that "inflation remains very low" to go out (a grocery store, perhaps?) and explain to the average person that the cost of many daily necessities has not gone considerably higher. If they don't want to educate the public about the lack of inflation, I'd be really curious as to why.
As for college, the issue becomes when anyone can get a loan, colleges ramp up tuition knowing that the money is there. Schools - as you said - then think they can buy up this, build that and do whatever it takes to "one-up" other schools. At some point, tuition gets too high, enrollment goes down and colleges are stuck. Monetary policy has nothing to do with it, but in a country where bubbles are not only increasingly accepted but encouraged, no one certainly seemed interested in putting forth a moment's effort (reform? who knows) to try and come up with a solution before costs have ramped a thousand %, did they? It would certainly appear they've had time.
Additionally, I find it interesting that the rate of increase in the cost of college tuition/fees appears to get noticeably steeper around 2002-2003....hmmm...
Maybe JP Morgan will be proven smart to significantly reduce their exposure to student debt last year.
"JPMorgan has been paring back student loans, which comprise a small part of the estimated $1 trillion market and the company’s $2.27 trillion balance sheet. The student-lending portfolio shrank 15 percent since 2009 to $13.4 billion as of Dec. 31 as bad debts almost doubled. Uncollectible loans climbed 72 percent since 2009 to $434 million last year, according to the bank. JPMorgan made $300 million of student loans last year, down from $1.9 billion in 2010 and $4.2 billion the prior year."
Reply to @clacy: How about this clacy just for baby step starters. If we're going to give away all sorts of perks and benefits to businesses and wealthy via the tax code then lets see all those jobs they are supposedly creating. That's their cry and yet all they do is stuff more into the pockets of a CEO and other upper levels of management and send jobs overseas. Show proof of the jobs or lose your perks.
HMO's - eliminate them. What good are they actually providing. Back when I was a kid if I got sick I went to the doctor. I didn't go to my insurance company or HMO or their lobbyists to be told what and how I could be treated for and at what cost. All I see here is an additional layer of expenses and a mountain of unnecessary paperwork.
Drug companies - why does my medicine cost 10x the amount that I'd have to pay just by stepping over either of our borders? You know the answer.
But I suppose it's better that we all just bury our heads in the sand, not bring up this class warfare nonsense, keep our mouths shut and trust that the government and corporations are doing what is best for us all.
Here's the bigger deal - if you don't think it's right to be helping the poorest among us then it's only right that we stop giving handouts to the richest. If you don't want to work there's not a lot we can do but if you do work you should share in the bounty on a more equitable basis.
Reply to @Mark: Sir: I would respectfully remind you that I am in charge of sarcastic responses on this board. However, I must concede that your product is quite respectable. Carry on.
Reply to @scott: Scott the procedures for measuring the inflation is very specific in comparisons. They do take care of the every shrinking size of the package while the price remains the same. It's a myth that such factors are not taken care of. They numbers are with that already. I agree that manufacturers are paying tricks but such tricks are not effective in the CPI numbers.
Reply to @Investor: Do you really believe the CPI is an accurate reflection of the rising costs of living? "Intervention analysis" and other tweaks are done for the best interests of the people? What about Core CPI's exclusion of food and energy? All good things? Or, better yet, do you believe that it is to the advantage of the government to accurately portray inflation?
Would there be ANY advantage for them not to portray it accurately? Even if just one or two?
Again, I want those who continue to say that the CPI should be looked at as an accurate measure of the rising cost of living to go out and explain to the average person (in a grocery store, lets say) that the CPI more accurately reflects the rising cost of living than what they may be seeing. If they believe it, why not go share this with the public?
That's something I want to see on CNBC - someone go into a grocery store and tell people that there's "little or no inflation - look, the CPI says so". I would pay to see that.
If no one's willing to do that, why not?
I'm not going to go around and around on this as I don't think we're ever going to agree that prices are rising at a rate that is not reflected by any government statistic.
I'm sure the seniors will be just happy to continue to see little-to-no COLA (Hey, CPI says no inflation.)
On a similar subject, I think it's interesting that this thread got nearly 40 comments in less than 2 days.
Reply to @scott: Scott, I've heard you often say that the governments CPI numbers are inaccurate and conscious lies, but I never see you give data supporting that. I went searching for some comparison inflation numbers that use food and energy and other items that the CPI index does not use. What I found was using food and energy and other stuff in the calculation doesn't vary from the CPI all that much.
Here is a couple articles talking about a more "total" look at consumer cost increase. In general, you are not wrong. Food moved up slightly higher and energy quite a bit more. But looking over everything consumers purchase through out the year, those items did not increase the total % that much.
Yes, people at the grocery store will tell you their food costs are higher. People always want to remember they paid 20 cents less for a loaf of bread last year, but they don't think much about paying 40% less now for a wide screen T.V. compared to just a few years ago.
Could be there is other data out there that suggests otherwise. But the quick search for articles on the subject I did suggests inflation over all consumer goods has stayed fairly low in comparison to the 3% historical average and not drastically higher then the governments CPI.
People really do disagree about CPI. I think I saw someone say Krugman thinks it is too high. (My impression was that he kind of agrees with or accepts the current estimates.)
“The debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.”
-Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003
" The Boskin Commission was an act of fraud, a backdoor method to suppress Social Security cost of living adjustments (COLAs). Rather than man up and say “fix this, its broken, we can’t afford it” the commission took a different route — they fabricated a series of nonsense adjustments that artificially lowered CPI by 1.1%.
The Boskin Commission’s massive government falsehood allowed former Fed Chair Alan Greenspan to take rates to absurdly low levels, as the official CPI data showed no inflation, despite double digit price increases.”
lol.....
Oh, and the title of Boskin's WSJ opinion piece?: "Don't Like the Numbers? Change 'Em!"
Reply to @MikeM: "Scott, I've heard you often say that the governments CPI numbers are inaccurate and conscious lies, but I never see you give data supporting that."
To pull one statistic, the FAO food price index more than doubled between 2000 and 2012.
"People always want to remember they paid 20 cents less for a loaf of bread last year,"
Of course they do - because food and energy are an increasing cost that people have to face consistently and actually need. I'm guessing that many would not want to try to tell people that their daily costs and common necessities are not noticeably higher because they know they'd get a response like the one that Dudley did in the article below.
If that's the case, might people's feelings on paying higher prices for core needs be more valid and worthy of concern? Or, does the fact that a boob tube is less than last year (and probably more crappily made) balance that out for everyone?
"The index vs. actual cost of living increases What gives? Don't food and fuel prices count in the tabulation of the index? Not really." and "But, that number is puffed up by the pesky necessities -- food and energy."
And people thought Dudley's comment in the article at the bottom was tone deaf - "pesky" necessities? Ignore the fact that those pesky necessities are more expensive, you can now watch "Dancing With the Stars" for cheaper. Wonderful.
If people have to pay more for food, gas and medical bills and other core living expenses, they have less money for other things either way.
"but they don't think much about paying 40% less now for a wide screen T.V. compared to just a few years ago. "
I tend to think people have to make the choice of a new TV far less often than they do for food, energy, heathcare and any number of things that are not a priority/core need. One could also argue with a decline in price, there's been a decline in quality with consumer electronics and any number of other similar non-core items.
"This year, an estimated 1.5 million Americans will declare bankruptcy. Many people may chalk up that misfortune to overspending or a lavish lifestyle, but a new study suggests that more than 60 percent of people who go bankrupt are actually capsized by medical bills."
As for health insurance, up another 8.6% y/o/y between 01/12 and 01/13.
_________________________________
As for cost of rents: "Despite the sluggish economy, average rents increased in all 82 markets tracked by Reis Inc., a real estate data firm. Average rents are now at record levels in 74 of those markets and now top $1,000 a month on average in 27 of them, including Miami, Seattle, San Diego, Chicago and Baltimore."
"Crone, Nakamura and Voith estimate that this and other problems bring down the government’s measure of rent increases by about 1.4 percent a year for the whole period that runs from 1942 to 1985. Nakamura outlines these findings in a very readable paper published by the Philadelphia Fed. Over such a long period, 1.4 percent into a really big number. Add that in, and instead of falling 20 percent in real-dollar terms over six decades, rents rise 50 percent.
Think about what that means for the middle class. Since 1970, the average hourly earnings of American workers (excluding managers) have stayed almost exactly flat by the official inflation measure. If, however, the cost of housing has risen faster than those measures say, then that means that many folks are actually worse off than they were then. You can see how that matters, and not just to the people in the San Remo with Central Park views."
"(Reuters) - The president of the New York Federal Reserve Bank doesn't normally face a raucous crowd.
But in Queens, New York, on Friday, William Dudley was bombarded with questions about food inflation, and his attempt to put rising commodity prices into a broader economic context only made things worse.
"When was the last time, sir, that you went grocery shopping?" one audience member asked.
Dudley tried to explain how the Fed sees things: Yes, food prices may be rising, but at the same time, other prices are declining. The Fed looks at core inflation, which strips out volatile food and energy costs, to get a better sense of where inflation may actually be heading.
So, Dudley sought an everyday example of a price that is falling.
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said referring to Apple Inc's (AAPL.O) latest handheld tablet computer hitting stories on Friday.
"You have to look at the prices of all things," he said.
This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf."
"I can't eat an iPad," another quipped. (Reporting by Kristina Cooke; Editing by Jan Paschal)"
Reply to @scott: You're so right! Point well taken. You have to not need to eat FOOD to say that there is no inflation happening. And gas at $3.71?????
Everyone's inflation is different and no CPI does not reflect anyone's personal inflation. It really depends on what you consume and what services you pay for.
That said you acknowledge the difficulty of publishing a CPI number for each individual or family. So, economists looks at the aggregate goods and services in broad categories and weight them in a basket that is representative of that aggregate. CPI number obtained for this basket is useful for making broad economical comparisons and fiscal and policy decisions.
Now there are some other CPI measures. For example CPI-W is for all urban wage earners. It tries to approximate the composition of workers use of goods and services. Still not applicable to any individual worker. There is CPI-U for all urban consumers and CPI-E for elderly.
As for core CPI which strips volatile parts of CPI. It is good for monetary policy as you do not react to short term changes in monetary policy setting. It has it's own purpose and use but that purpose is really to serve the needs of economists. Instead of core CPI some use a moving average which end up similarly acting as a low pass filter on data.
It has become popular pastime for the of people to bash the government. Everybody criticize. Few really bother to their own research use the first hand resources. Throw many talking heads, media and blog outlets here. Some have their own vested interest. Some are trying to sell you something.
Finally you can point me to a particular item increased this much or gas. In developed economies inflation is more dependent on labor cost increases. In emerging markets the inflation is driven more on daily commodities. So, in the US while food and gas is very visible, in fact they constitute a small part of a typical family expenditures. Thus, in US they have smaller effect on overall family inflation or the other CPI measures I have mentioned above.
Anyway, when you look food and gas since those are the services most visible to you it makes good headlines. But in the end you are discussing a small portion of a bigger basket.
You can now ignore all I said and go back to regular zero hedge programming and bring back the same stale stuff on another discussion again. I am done here.
Reply to @Mark: This is probably getting way off the track (and I loved the video), but I would like to respond to your comment about HMOs.
Since we're talking about "when I was a kid", when I was a kid I went to HIP - then, and I think still now, one of the largest HMOs in the country. Old style - their own staff of doctors, labs, facilities (none of this "wrap a layer of bureaucracy around individual practitioners"). At the time, it was very efficient and focused on, well health maintenance. These days, you want some of the best care in California, go to Kaiser.
At their best, HMOs can provide fine care with little overhead - since things are in house. At their worst, they are, as you described, a mess of paperwork, arcane rules on whom you can see, what levels of permissions you have to get, etc. IMHO that's what happens when veneers of insurance are layered on top of existing systems, and why the Affordable Care Act still costs more than it could have.
Reply to @Mark: I agree that the perks/benefits/tax incentives/deductions for businesses should be linked to the jobs they create here. The deductions should be based on results, not on hopes that they will create results. A rather simplistic common-sense view would be to create a metric based on percent increase year over year about number of people employed by the company and the total wages paid to decide the percent deductions you can claim the following year. I will leave it to the smart ones to figure out the formula.
Reply to @msf: Phew! I always hold my breath when I see you respond to one of my posts wondering what idiotic thing I might have said. You are always so thorough and succinct in your replies. Thank you for not ripping me a new one even though I've probably given everyone enough babble to feed off of.
My disgust with HMO's is tainted by mainly one individual who formerly ran United Health Care; a true scumbag but I digress. Suffice to say IMHO they operated on the worst end of the scale and seemed to provide no added benefit to me or my employees. Glad to be done with them. As a side note I did belong in the Kaiser network back when I resided in CA and was pleased with the service so my brush may be overly broad.Bottom line however is that I remain convinced that there is abundant room for improvement in this arena but I'm fairly clueless on how to go about it.
Comments
Where prices are not rising, quality and quantity is down (less toilet paper but "now stronger", smaller boxes, smaller etc etc.) I don't exactly feel as if I'm alone in this opinion.
Additionally, as I noted above, I continue to encourage those who continually say that "inflation remains very low" to go out (a grocery store, perhaps?) and explain to the average person that the cost of many daily necessities has not gone considerably higher. If they don't want to educate the public about the lack of inflation, I'd be really curious as to why.
As for college, the issue becomes when anyone can get a loan, colleges ramp up tuition knowing that the money is there. Schools - as you said - then think they can buy up this, build that and do whatever it takes to "one-up" other schools. At some point, tuition gets too high, enrollment goes down and colleges are stuck. Monetary policy has nothing to do with it, but in a country where bubbles are not only increasingly accepted but encouraged, no one certainly seemed interested in putting forth a moment's effort (reform? who knows) to try and come up with a solution before costs have ramped a thousand %, did they? It would certainly appear they've had time.
Additionally, I find it interesting that the rate of increase in the cost of college tuition/fees appears to get noticeably steeper around 2002-2003....hmmm...
Maybe JP Morgan will be proven smart to significantly reduce their exposure to student debt last year.
http://www.bloomberg.com/news/2012-04-10/jpmorgan-restricts-new-student-lending-to-bank-customers.html
"JPMorgan has been paring back student loans, which comprise a small part of the estimated $1 trillion market and the company’s $2.27 trillion balance sheet. The student-lending portfolio shrank 15 percent since 2009 to $13.4 billion as of Dec. 31 as bad debts almost doubled. Uncollectible loans climbed 72 percent since 2009 to $434 million last year, according to the bank. JPMorgan made $300 million of student loans last year, down from $1.9 billion in 2010 and $4.2 billion the prior year."
HMO's - eliminate them. What good are they actually providing. Back when I was a kid if I got sick I went to the doctor. I didn't go to my insurance company or HMO or their lobbyists to be told what and how I could be treated for and at what cost. All I see here is an additional layer of expenses and a mountain of unnecessary paperwork.
Drug companies - why does my medicine cost 10x the amount that I'd have to pay just by stepping over either of our borders? You know the answer.
But I suppose it's better that we all just bury our heads in the sand, not bring up this class warfare nonsense, keep our mouths shut and trust that the government and corporations are doing what is best for us all.
Here's the bigger deal - if you don't think it's right to be helping the poorest among us then it's only right that we stop giving handouts to the richest. If you don't want to work there's not a lot we can do but if you do work you should share in the bounty on a more equitable basis.
Would there be ANY advantage for them not to portray it accurately? Even if just one or two?
Again, I want those who continue to say that the CPI should be looked at as an accurate measure of the rising cost of living to go out and explain to the average person (in a grocery store, lets say) that the CPI more accurately reflects the rising cost of living than what they may be seeing. If they believe it, why not go share this with the public?
That's something I want to see on CNBC - someone go into a grocery store and tell people that there's "little or no inflation - look, the CPI says so". I would pay to see that.
If no one's willing to do that, why not?
I'm not going to go around and around on this as I don't think we're ever going to agree that prices are rising at a rate that is not reflected by any government statistic.
I'm sure the seniors will be just happy to continue to see little-to-no COLA (Hey, CPI says no inflation.)
On a similar subject, I think it's interesting that this thread got nearly 40 comments in less than 2 days.
Here is a couple articles talking about a more "total" look at consumer cost increase. In general, you are not wrong. Food moved up slightly higher and energy quite a bit more. But looking over everything consumers purchase through out the year, those items did not increase the total % that much.
Yes, people at the grocery store will tell you their food costs are higher. People always want to remember they paid 20 cents less for a loaf of bread last year, but they don't think much about paying 40% less now for a wide screen T.V. compared to just a few years ago.
Could be there is other data out there that suggests otherwise. But the quick search for articles on the subject I did suggests inflation over all consumer goods has stayed fairly low in comparison to the 3% historical average and not drastically higher then the governments CPI.
couple articles attempting to clarify.
http://inflationdata.com/articles/2012/02/27/can-we-trust-government-inflation-numbers/
http://www.bankrate.com/finance/personal-finance/is-inflation-higher-than-you-think-1.aspx
I really know nothing about what is a good number for CPI but Barry Ritzhold was ranting about Michael Boskin and said: "...they fabricated a series of nonsense adjustments that artificially lowered CPI by 1.1%." http://www.ritholtz.com/blog/2013/03/michael-boskin-wrongstradamus/
He explained why he thinks the CPI is lower than it should be in 2010:
http://www.ritholtz.com/blog/2010/01/why-michael-boskin-deserves-our-contempt/
People really do disagree about CPI. I think I saw someone say Krugman thinks it is too high. (My impression was that he kind of agrees with or accepts the current estimates.)
“The debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.”
-Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003
" The Boskin Commission was an act of fraud, a backdoor method to suppress Social Security cost of living adjustments (COLAs). Rather than man up and say “fix this, its broken, we can’t afford it” the commission took a different route — they fabricated a series of nonsense adjustments that artificially lowered CPI by 1.1%.
The Boskin Commission’s massive government falsehood allowed former Fed Chair Alan Greenspan to take rates to absurdly low levels, as the official CPI data showed no inflation, despite double digit price increases.”
lol.....
Oh, and the title of Boskin's WSJ opinion piece?: "Don't Like the Numbers? Change 'Em!"
http://online.wsj.com/article/SB10001424052748704586504574654261655183416.html
lol.
Also worth reading: http://www.ritholtz.com/blog/2010/01/economists-serving-their-political-masters/
Do I think CPI is wildly inaccurate? No. Do I think it's an inaccurate picture of the rising cost of living? Yes, I absolutely do.
Beyond that, I asked above: "Would there be ANY advantage/benefit to the government for the government not to portray inflation accurately? Yes? No?
To pull one statistic, the FAO food price index more than doubled between 2000 and 2012.
http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
"People always want to remember they paid 20 cents less for a loaf of bread last year,"
Of course they do - because food and energy are an increasing cost that people have to face consistently and actually need. I'm guessing that many would not want to try to tell people that their daily costs and common necessities are not noticeably higher because they know they'd get a response like the one that Dudley did in the article below.
If that's the case, might people's feelings on paying higher prices for core needs be more valid and worthy of concern? Or, does the fact that a boob tube is less than last year (and probably more crappily made) balance that out for everyone?
From your article above: http://www.bankrate.com/finance/personal-finance/is-inflation-higher-than-you-think-1.aspx
"The index vs. actual cost of living increases
What gives? Don't food and fuel prices count in the tabulation of the index? Not really." and "But, that number is puffed up by the pesky necessities -- food and energy."
And people thought Dudley's comment in the article at the bottom was tone deaf - "pesky" necessities? Ignore the fact that those pesky necessities are more expensive, you can now watch "Dancing With the Stars" for cheaper. Wonderful.
If people have to pay more for food, gas and medical bills and other core living expenses, they have less money for other things either way.
"but they don't think much about paying 40% less now for a wide screen T.V. compared to just a few years ago. "
I tend to think people have to make the choice of a new TV far less often than they do for food, energy, heathcare and any number of things that are not a priority/core need. One could also argue with a decline in price, there's been a decline in quality with consumer electronics and any number of other similar non-core items.
As for the cost of medical needs - http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH
"This year, an estimated 1.5 million Americans will declare bankruptcy. Many people may chalk up that misfortune to overspending or a lavish lifestyle, but a new study suggests that more than 60 percent of people who go bankrupt are actually capsized by medical bills."
"Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by nearly half."
http://www.theatlantic.com/business/archive/2011/03/did-romneycare-really-have-no-effect-on-medical-bankruptcy-in-massachusetts/72179/
As for health insurance, up another 8.6% y/o/y between 01/12 and 01/13.
_________________________________
As for cost of rents: "Despite the sluggish economy, average rents increased in all 82 markets tracked by Reis Inc., a real estate data firm. Average rents are now at record levels in 74 of those markets and now top $1,000 a month on average in 27 of them, including Miami, Seattle, San Diego, Chicago and Baltimore."
http://online.wsj.com/article/SB10001424052702303933404577505260835025948.html
http://go.bloomberg.com/market-now/2013/02/14/4-brs-29750-a-month-a-story-of-inflation/
"Crone, Nakamura and Voith estimate that this and other problems bring down the government’s measure of rent increases by about 1.4 percent a year for the whole period that runs from 1942 to 1985. Nakamura outlines these findings in a very readable paper published by the Philadelphia Fed. Over such a long period, 1.4 percent into a really big number. Add that in, and instead of falling 20 percent in real-dollar terms over six decades, rents rise 50 percent.
Think about what that means for the middle class. Since 1970, the average hourly earnings of American workers (excluding managers) have stayed almost exactly flat by the official inflation measure. If, however, the cost of housing has risen faster than those measures say, then that means that many folks are actually worse off than they were then. You can see how that matters, and not just to the people in the San Remo with Central Park views."
Seven decades of rising prices:
http://go.bloomberg.com/market-now/files/2013/02/Rent-Increase-Chart-Rev3-e1360779885611.png
=================
"(Reuters) - The president of the New York Federal Reserve Bank doesn't normally face a raucous crowd.
But in Queens, New York, on Friday, William Dudley was bombarded with questions about food inflation, and his attempt to put rising commodity prices into a broader economic context only made things worse.
"When was the last time, sir, that you went grocery shopping?" one audience member asked.
Dudley tried to explain how the Fed sees things: Yes, food prices may be rising, but at the same time, other prices are declining. The Fed looks at core inflation, which strips out volatile food and energy costs, to get a better sense of where inflation may actually be heading.
So, Dudley sought an everyday example of a price that is falling.
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said referring to Apple Inc's (AAPL.O) latest handheld tablet computer hitting stories on Friday.
"You have to look at the prices of all things," he said.
This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf."
"I can't eat an iPad," another quipped. (Reporting by Kristina Cooke; Editing by Jan Paschal)"
http://www.reuters.com/article/2011/03/11/usa-fed-dudley-ipad-idUSN1124415220110311
============
Neither here nor there:
The "I Can't Eat an IPad" line should have been made into a shirt.
Everyone's inflation is different and no CPI does not reflect anyone's personal inflation. It really depends on what you consume and what services you pay for.
That said you acknowledge the difficulty of publishing a CPI number for each individual or family. So, economists looks at the aggregate goods and services in broad categories and weight them in a basket that is representative of that aggregate. CPI number obtained for this basket is useful for making broad economical comparisons and fiscal and policy decisions.
Now there are some other CPI measures. For example CPI-W is for all urban wage earners. It tries to approximate the composition of workers use of goods and services. Still not applicable to any individual worker. There is CPI-U for all urban consumers and CPI-E for elderly.
As for core CPI which strips volatile parts of CPI. It is good for monetary policy as you do not react to short term changes in monetary policy setting. It has it's own purpose and use but that purpose is really to serve the needs of economists. Instead of core CPI some use a moving average which end up similarly acting as a low pass filter on data.
It has become popular pastime for the of people to bash the government. Everybody criticize. Few really bother to their own research use the first hand resources. Throw many talking heads, media and blog outlets here. Some have their own vested interest. Some are trying to sell you something.
Finally you can point me to a particular item increased this much or gas. In developed economies inflation is more dependent on labor cost increases. In emerging markets the inflation is driven more on daily commodities. So, in the US while food and gas is very visible, in fact they constitute a small part of a typical family expenditures. Thus, in US they have smaller effect on overall family inflation or the other CPI measures I have mentioned above.
Anyway, when you look food and gas since those are the services most visible to you it makes good headlines. But in the end you are discussing a small portion of a bigger basket.
You can now ignore all I said and go back to regular zero hedge programming and bring back the same stale stuff on another discussion again. I am done here.
This is probably getting way off the track (and I loved the video), but I would like to respond to your comment about HMOs.
Since we're talking about "when I was a kid", when I was a kid I went to HIP - then, and I think still now, one of the largest HMOs in the country. Old style - their own staff of doctors, labs, facilities (none of this "wrap a layer of bureaucracy around individual practitioners"). At the time, it was very efficient and focused on, well health maintenance. These days, you want some of the best care in California, go to Kaiser.
At their best, HMOs can provide fine care with little overhead - since things are in house. At their worst, they are, as you described, a mess of paperwork, arcane rules on whom you can see, what levels of permissions you have to get, etc. IMHO that's what happens when veneers of insurance are layered on top of existing systems, and why the Affordable Care Act still costs more than it could have.
My disgust with HMO's is tainted by mainly one individual who formerly ran United Health Care; a true scumbag but I digress. Suffice to say IMHO they operated on the worst end of the scale and seemed to provide no added benefit to me or my employees. Glad to be done with them. As a side note I did belong in the Kaiser network back when I resided in CA and was pleased with the service so my brush may be overly broad.Bottom line however is that I remain convinced that there is abundant room for improvement in this arena but I'm fairly clueless on how to go about it.