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View Diary: On the Distinction Between Temporary and Permanent Substitutions (5 comments)

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  •  Very Nice (6+ / 0-)

    I am going to forward this tomorrow to some higher powered policy people/economists in DC to get their take. But it seems right to me.

    Not to put my prelim analysis in your mouth you seem to ID an essential asymmetry never acknowledged by Chained CPI advocates. For example their examples almost always "accidentally" have chicken crowding out beef while ignoring the fact there has always been a hierarchy of meat costs from bacon fat, ham hocks, chicken feet and tripe/menudo/chittlins at the bottom to porterhouse and filet mignon at the top. Maybe because in their experience they can pay $100 a plate for 'sweetbreads' while noticing that poor people can still buy flank steak. You know because animal protein is just animal protein.

    There is a reason why the Irish raised wheat and ate potatoes and why the Scotch raised highland cattle and ate Oat stuffed intestines and called it Haggis. And it wasn't because they didn't like fine wheat loafs and beefsteak respectively. History is full of peasant populations who couldn't afford the life stock and crops they grew for market. And whether you talk grain or meat the hierarchy hasn't changed much.

    From that perspective Chained CPI over the time frames you address is just a backhand suppression of consumption towards bare and cheapest subsistence, the ratchet only working one way.

    As I said: Nice One! - SocSec.Defender at - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

    by Bruce Webb on Mon Mar 11, 2013 at 08:22:54 PM PDT

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