Hacker News Reader

Comment by littlecranky67 | Hacker News Reader

The basket is dogshit, but not for the reason you probably think. Our lives improved tremendously by technology: internet, smartphone, videogames, netflix & co, medical progress, online shopping of any goods you can possible imagine, ability to travel the world for cheap.

The problem with the CPI basket is, it needs to be constant of products to be comparable, so NO technological advancement is considered in that basket. Instead, they use the price of butter and tomatoes. Well, a fictious 1950s person wouldn't care that is can buy more butter or tomatoes than we can, but would want smartphone and a plane ticket to thailand.

View on HN

Funny, for me it seems terrible exactly for the opposite reason. These kinds of baskets are too heavily weighted by things that go relatively down in costs like technology and airplane tickets.

The monetary reason is that the reason those things go down is because of technology advances and not because of changes in the value of the currency. Inflation should be about the currency, and less about what cool advances people are doing to make cheaper TVs and better websites

The practical reason is that if the basics like rent and food go up relative to wages, then a lot of people end up crushed by the basics alone and have no disposable income left for the cool stuff. The baskets are often too biased towards spending patterns of those who live the good life and for whom luxuries actually matter

>Funny, for me it seems terrible exactly for the opposite reason. These kinds of baskets are too heavily weighted by things that go relatively down in costs like technology and airplane tickets.

Have you looked at the actual weights?

https://www.bls.gov/news.release/archives/cpi_10142026.htm

Airline fares make up a whopping 1.04% of the CPI basket. "Information technology commodities" makes up a whopping 0.752%. Meanwhile the weights of essentials are: Food (13.507%), Energy (7.418%), Shelter (35.323%), Medical care services (6.834)

The American Dream is not to Owner's Equivalent Rent a house.

I'm sorry but videogames and Netflix have done exactly nothing for my quality of life. In fact, I wish there were less of both, and multiple other things you listed. I think we have a significantly different understanding of quality.

It is just an example, but you come to the base of my argument: CPI basket is an average - and you cannot use it to make statements about individuals. If Netflix is nothing to you, then look at houses: My granparents (born even after 1920s) had an outhouse. That means, every time you need to use the bathroom, you left your house through the garden - come wind and weather. That meant in the winter, you were walking through the snow and do your business in a small, smelly outhouse without no access to running water whatsover at sub-zero degrees. Yet there are people running around saying that our grandparents could afford houses, while we can't anymore.

The quality of the house your grandparents (for 1920 probably your grand-gran parents) is vastly different. Those houses cannot be compared at all, when I take my dump in the heated warmth in a nicely smelling place listening to some music over my airpods.

Getting offtopic... for my father growing up in the Netherlands, the early 50's was still as you describe: an outhouse with a bucket, no running water, an uninsulated house with a roof that let in snow; he caught every illness. They had electricity but no appliances (except a radio?). By the time he was 18, they had a heater, fridge, freezer, washing machine, he had a (rusty) Mercedes and they got a TV soon after. So progress has been very uneven and if you only go back 40 years goods are far more comparable.

In a video Ann Reardon, a popular Australian YouTuber, tested a vintage hand-cranked stand mixer invented in Australia. She explained the context of a hand cranked stand mixer - that rural homes in Australia didn't have electricity until well into the 1960s.

If your grandparents were born in the 1920s they'd have been adult in the 50s, and outhouses were already rare except in rural areas. The 40s/50 building boom built suburbia, not shacks with outhouses.

Let's look at some real numbers instead of a folksy parable about grandma. Here are recent stats about rent arrears:

https://www.baselane.com/resources/unpaid-rent-debt-statisti...

And rental affordability:

In 2026, a full-time worker needs to earn $34.73 per hour to afford a modest two-bedroom rental home in the U.S. and $29.19 to afford a modest one-bedroom rental.

https://nlihc.org/oor/about

And mortgage affordability:

https://www.visualcapitalist.com/median-house-prices-vs-inco...

None of these are heading in the right direction.

My grandparents’ house’s purchase price, inflation-adjusts to 3x the current average salary in the UK.

That house trades at 13x now.

There is no house of any size for 3x in most areas of the UK.

You can’t handwave that away by saying “central heating”. The cost of part-of-a-house is far less than the total - not 10x more on top.

Part of the issue is population doubled since then but house building didn’t. Part is cheap debt in the 2000s turned everyone and their dog into buy-to-let landlords then AirBnB hosts.

Here in the US there are tons of homes available for 3x median income.

... and?

You might as well complain about that the basket contains tomatoes because you don't like tomatoes.

It's a statistical tool concerning populations, not a sampling of what hacker news user cicko in their wisdom thinks increases quality of life.

Not only is CPI calculated with Hedonic Adjustments (the term they use when doing the thing you said they didn't do), those are one of the most controversial parts of the CPI calculation, because they allow CPU GHz to offset wildly inflating health care, housing, and education costs, which is obvious bullshit.

> Our lives improved tremendously by technology

Aside from technological and scientific progress in the medical field, it's generally been shown that people's lives have gotten worse.

Reply on news.ycombinator.com