Hedonic Absurdity

Drawn into the stream
Of undefined illusion
Those diamond dreams
They can't disguise the truth
--Level 42

Confusing NYT piece that discusses hedonic adjustments to government-reported inflation data in the plight of poor people trying to make ends meet.

Hedonic adjustments are downward revisions that bureaucrats make to pricing data to compensate for quality improvements over time. For example, although you may have actually paid $1000 for a computer, the government might say that the 'real price was only $800 because you get more for computing performance per dollar today compared to years ago.

Bureaucrats apply hedonic adjustments to product and service categories from ground beef to law services to grass seed.

On the one hand, the NYT article suggests that the poor would be worse off if the performance per dollar of goods and services had not improved over the years. On the other hand, the article also notes that poor people still struggle to pay for basic goods and services.

This lobs a softball-sized question toward the NYT reporter that, unfortunately, is never asked. Why should the poor be struggling to make ends meet if hedonics have pushed real prices of goods and services lower?

The answer, of course, is that real prices aren't lower. Actual prices paid for nearly all goods and services are much higher now than just a few years ago.

Hedonic adjustments are a ruse--a way for officials to manipulate the data to cloak rising prices. Prices are rising because $trillions are being printed out of thin air. The dollars in our pockets buy less now than before.

The group that is hurt the most by this inflation and the hedonics charade is the poor.