Wednesday, July 25, 2012

Adjusting for the Truth

What does this sentence mean?

"Inflation-adjusted median family income has declined about 6 percent since it peaked at around $64,000 in 2000."

Do you mean that the same $64,000 adjusted for inflation is down 6% since 2000 -- or that the median is actually down 6% in current dollars, which doesn't need further adjustment for inflation to distort the number (median), which is the midpoint number adjusted equally for all current dollars (income).
But in 2000, we didn't have the smartphones -- that many people can get for 99 dollars, or even 99 cents -- with contract. Even the electricity we buy -- can be much more productive for such reasons -- nullifying the fact that we now pay 10 cents per KwH rather than 9 cents -- for the 10% increase in inflation. A barrel of oil can be made into made more products -- and not just for combustion.

So there is a self-adjusting mechanism for inflation -- that shouldn't be double-adjusted, and in the case of labor (government) negotiators, multiplied by double -- so that their median is entitled to the top 1% of their "peers" -- and all that other nonsense.

Just the facts (median) -- without adjusting it for anything one thinks it "ought" to be, would be extremely informative -- and not subject to such manipulations by anyone who will further adjust it to their expedience.


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