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> US real median household income has been steadily rising[1] for the last 40+ years. Compare it to the Consumer Price Index: https://fred.stlouisfed.org/seri

> US real median household income has been steadily rising[1] for the last 40+ years. Compare it to the Consumer Price Index: https://fred.stlouisfed.org/series/CUUR0000SA0R https://fred.stlouisfed.org/series/CUUR0000SA0R

ch4s3 2mo ago
REAL income is adjusted for inflation. If real median income is increasing then it is outpacing inflation by definition.
- senordevnyc 2mo ago
  Why is it that the cynics and doomers always have such a poor grasp of the data?
  - ch4s3 2mo ago
    I think once you have a good command of data and broader trends its harder to be cynical or a doomer. You just see that things aren't perfect but are larger better than the past on most metrics.
    - senordevnyc 2mo ago
      I completely agree, especially if you consider humanity as a whole. I have asked this question many times to the doomers, and honestly don’t think I’ve ever gotten a good answer: if you had to be born as a random human somewhere on earth, and the only thing you get to choose is the year in which you’re born, what year would you choose? You can’t choose your race, intelligence level, physical abilities, parents, socioeconomic status, country, gender, sexual orientation, etc. Only the year. So doomers: if the world is completely fucked up and going down the tubes, when would you prefer to have been born? Huge bonus if you can actually give some data showing that the average human was better off during whatever time you choose.
      - tsimionescu 2mo ago
        The discussion here was about the USA, not the world.
        ch4s3 2mo ago
        That's why I pointed out that US real income, employment, and inflation figures all beat the OECD average.
        senordevnyc 2mo ago
        OK, feel free to answer the same question for the USA.
    - yoyohello13 2mo ago
      I think it's the dissonance between what the data say and just looking around. I see far more homeless, friends and family are more stressed, life in general just feels harder with less opportunity. Then you have the data people saying "no your life is actually great." So why the dissonance? I don't think it's just social media brainwashing.
      - ch4s3 2mo ago
        I'm not saying any one person's individual life is necessarily better or worse, just that the median person is doing a little better than a few years ago. obviously there are long tails of outcomes in the US. I'd also point out that the US has seen better wage growth and less inflation in recent years than the rest of the OECD, by comparison we're doing OK-er than our peers.
      - sarchertech 2mo ago
        The reason we have data is because of all the biases that come with “just looking around”. Confirmation bias and selection bias are very powerful. I strongly dislike Donald Trump, and he has done some terrible things to our country. But my dislike of him also makes me more likely to notice the bad things happening around me. It happens with conservatives too. Ask my conservative family about how frequently men pretend to be trans and go into women’s bathrooms to get a peek. Ask them how often non-citizens vote. Ask them how the current crime rate compares to when they grew up.
        yoyohello13 2mo ago
        Yeah this seems right to me. Politics is so polarizing it's a guarantee that half the country is going to be pissed no matter who is in charge. Most of my family leans left, it's hard to stay positive when the leader of your country actively and proudly hates you while also making terrible policy decisions.
        ch4s3 2mo ago
        It's much easier if you don't spend all of your free time mainlining negative national partisan news straight into your face. All of the most miserable people I know are very online and very into politics. It's not to say that you shouldn't care, just that the vast majority of the time you can do anything about it, so you're better served to focus elsewhere.
  - nixon_why69 2mo ago
    Because the basket of goods for inflation doesn't separate optional from mandatory consumption. If housing, healthcare and education are outpacing the topline inflation number, a lot of marginal families will be squeezed. The cheap LG TV doesn't really make up for it.
    - ch4s3 2mo ago
      Nevertheless if you lump those costs into an inflation number it won't be a lot higher, the Total Living Cost calculated for 2023-2024 showed 4.4% inflation vs 3% CPI. There are a lot of ways to slice and dice this, which is why people stick to the classic CPI.
      - nixon_why69 2mo ago
        Yes, if I ignore that point then the top line number is the same. But it's a choice to compute top line CPI the way they do. I'm explaining why people are still squeezed despite the top line number saying they shouldn't be. When data and anecdotes disagree, then double check the way you compile your data.
        ch4s3 2mo ago
        The data shows that inflation inclusive of housing, education, and healthcare isn't that much higher than CPI, which is because CPI already includes shelter, which accounts for ~36% of CPI. You assertion that CPI doesn't include housing is just wrong.
        nixon_why69 2mo ago
        I'm not asserting they don't include housing. I'm saying housing is non-optional, so having low inflation on flat screen TVs is cold comfort if you're struggling to pay rent. The basket of goods isn't the same for everyone. It's been like 5 years now of low consumer sentiment and increasing consumer debt while people who don't feel it are flabbergasted, the top line CPI number is fine, why aren't people happy?
rustcleaner 2mo ago
I think CPI is a poor measure, because it's a moving meter stick that understates inflation. When beef is overpriced, hamburger switches into the basket. When hamburger is a luxury, then chicken swaps into it instead. It understates inflation. M2 change is a much better measure in my opinion. Using M2 is literally comparing supply of item to supply of cash which could immediately buy it. When scaling SPX or GC1! by M2SL[0]/M2SL, you get a surprisingly flat time series over decades, which reads to me that the effects of the change in M2 are being filtered out of an otherwise exponential price curve.

ch4s3 2mo ago

REAL income is adjusted for inflation. If real median income is increasing then it is outpacing inflation by definition.

senordevnyc 2mo ago
Why is it that the cynics and doomers always have such a poor grasp of the data?
- ch4s3 2mo ago
  I think once you have a good command of data and broader trends its harder to be cynical or a doomer. You just see that things aren't perfect but are larger better than the past on most metrics.
  - senordevnyc 2mo ago
    I completely agree, especially if you consider humanity as a whole. I have asked this question many times to the doomers, and honestly don’t think I’ve ever gotten a good answer: if you had to be born as a random human somewhere on earth, and the only thing you get to choose is the year in which you’re born, what year would you choose? You can’t choose your race, intelligence level, physical abilities, parents, socioeconomic status, country, gender, sexual orientation, etc. Only the year. So doomers: if the world is completely fucked up and going down the tubes, when would you prefer to have been born? Huge bonus if you can actually give some data showing that the average human was better off during whatever time you choose.
    - tsimionescu 2mo ago
      The discussion here was about the USA, not the world.
      - ch4s3 2mo ago
        That's why I pointed out that US real income, employment, and inflation figures all beat the OECD average.
      - senordevnyc 2mo ago
        OK, feel free to answer the same question for the USA.
  - yoyohello13 2mo ago
    I think it's the dissonance between what the data say and just looking around. I see far more homeless, friends and family are more stressed, life in general just feels harder with less opportunity. Then you have the data people saying "no your life is actually great." So why the dissonance? I don't think it's just social media brainwashing.
    - ch4s3 2mo ago
      I'm not saying any one person's individual life is necessarily better or worse, just that the median person is doing a little better than a few years ago. obviously there are long tails of outcomes in the US. I'd also point out that the US has seen better wage growth and less inflation in recent years than the rest of the OECD, by comparison we're doing OK-er than our peers.
    - sarchertech 2mo ago
      The reason we have data is because of all the biases that come with “just looking around”. Confirmation bias and selection bias are very powerful. I strongly dislike Donald Trump, and he has done some terrible things to our country. But my dislike of him also makes me more likely to notice the bad things happening around me. It happens with conservatives too. Ask my conservative family about how frequently men pretend to be trans and go into women’s bathrooms to get a peek. Ask them how often non-citizens vote. Ask them how the current crime rate compares to when they grew up.
      - yoyohello13 2mo ago
        Yeah this seems right to me. Politics is so polarizing it's a guarantee that half the country is going to be pissed no matter who is in charge. Most of my family leans left, it's hard to stay positive when the leader of your country actively and proudly hates you while also making terrible policy decisions.
        ch4s3 2mo ago
        It's much easier if you don't spend all of your free time mainlining negative national partisan news straight into your face. All of the most miserable people I know are very online and very into politics. It's not to say that you shouldn't care, just that the vast majority of the time you can do anything about it, so you're better served to focus elsewhere.
- nixon_why69 2mo ago
  Because the basket of goods for inflation doesn't separate optional from mandatory consumption. If housing, healthcare and education are outpacing the topline inflation number, a lot of marginal families will be squeezed. The cheap LG TV doesn't really make up for it.
  - ch4s3 2mo ago
    Nevertheless if you lump those costs into an inflation number it won't be a lot higher, the Total Living Cost calculated for 2023-2024 showed 4.4% inflation vs 3% CPI. There are a lot of ways to slice and dice this, which is why people stick to the classic CPI.
    - nixon_why69 2mo ago
      Yes, if I ignore that point then the top line number is the same. But it's a choice to compute top line CPI the way they do. I'm explaining why people are still squeezed despite the top line number saying they shouldn't be. When data and anecdotes disagree, then double check the way you compile your data.
      - ch4s3 2mo ago
        The data shows that inflation inclusive of housing, education, and healthcare isn't that much higher than CPI, which is because CPI already includes shelter, which accounts for ~36% of CPI. You assertion that CPI doesn't include housing is just wrong.
        nixon_why69 2mo ago
        I'm not asserting they don't include housing. I'm saying housing is non-optional, so having low inflation on flat screen TVs is cold comfort if you're struggling to pay rent. The basket of goods isn't the same for everyone. It's been like 5 years now of low consumer sentiment and increasing consumer debt while people who don't feel it are flabbergasted, the top line CPI number is fine, why aren't people happy?

rustcleaner 2mo ago

I think CPI is a poor measure, because it's a moving meter stick that understates inflation. When beef is overpriced, hamburger switches into the basket. When hamburger is a luxury, then chicken swaps into it instead. It understates inflation. M2 change is a much better measure in my opinion. Using M2 is literally comparing supply of item to supply of cash which could immediately buy it. When scaling SPX or GC1! by M2SL[0]/M2SL, you get a surprisingly flat time series over decades, which reads to me that the effects of the change in M2 are being filtered out of an otherwise exponential price curve.