Hedonic Adjustments

Because it's the quality that matters.

Now that we're on the downside of the Hubbert Oil curve, the prices of petroleum and petroleum-based products will inevitably rise.

So how do Greenspan and Bu$hCo get away with the lie that inflation is under control?

Uggabugga points out how the main$tream media propagates the disinformation, but if you read the fine print you can find the spin source:

Gasoline has risen $1.00 from $1.50 to $2.50 in three years, a 66% increase, or 18% per year. And that's just gasoline at the pump. Higher gasoline prices also affect what you pay for other goods since transportation costs are folded into food and other merchandise.

How come the inflation rate is reported to be so low? Samuelson gives a hint with this line: (emp add)

"In June new car prices -- after adjustment for quality improvements -- were actually 2.1 percent lower than 10 years earlier, according to the Bureau of Labor Statistics."

That's the controversial "hedonic adjustments" you've heard about. A new computer comes out with double the CPU speed, but has same retail price as a similar model a year ago. The adjustment by the BLS results in a computer at half the price! This didn't happen in the past. Improvements in performance had been assumed to be part of the territory and not something to be "adjusted" for.

Hedonic adjustments are an economic tool used to compare actual prices with the quality of what you're enjoying right now.

So if you're paying $2.50 a gallon for gasoline, it's obvious that you're only really paying a dollar or so, because with that gasoline you're buying a Righteous Dear Leader and everything the Company has to improve your life.

If your vote is vaporized into the ether by an algorithm from the Diebold Corporation, you are actually more empowered than ever before, because you've $elected a popular president.

Or at least that's what the hedonic adjustment says.