Friday , July 19 2019
Home / LewRockwell / No, Autos Are Not “Cheaper Now”

No, Autos Are Not “Cheaper Now”

Summary:
According to the BLS, inflation in the category of “New Vehicles” has been practically non-existent the past 21 years. Longtime readers know I’ve long turned a skeptical gaze at official calculations of inflation, offering real-world analyses such as The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016) and Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001 (May 31, 2018). Official claims that grossly understate real-world inflation is a core feature of debt-serfdom and neofeudalism: we’re working harder and longer and getting less for our earnings every year, but this reality is obfuscated by official pronouncements that inflation is 2%–barely above zero. Meanwhile, quality

Topics:
Charles Hugh Smith considers the following as important:

This could be interesting, too:

Tyler Durden writes White House Offers Pelosi ‘Menu’ Of Spending Cuts As Debt-Ceiling Talks Enter Most Fraught Phase

Tyler Durden writes Libra Will Upset World Economy If It Isn’t Regulated Tightly, G7 Warns

Tyler Durden writes Russia Offers Turkey Advanced Su-35 Jets Day After US F-35 Program Expulsion

Tyler Durden writes On The Brink Of World War 3: Here Are 5 Major Developments Within The Last 48 Hours…

According to the BLS, inflation in the category of “New Vehicles” has been practically non-existent the past 21 years.

Longtime readers know I’ve long turned a skeptical gaze at official calculations of inflation, offering real-world analyses such as The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016) and Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001 (May 31, 2018).

Official claims that grossly understate real-world inflation is a core feature of debt-serfdom and neofeudalism: we’re working harder and longer and getting less for our earnings every year, but this reality is obfuscated by official pronouncements that inflation is 2%–barely above zero.

Meanwhile, quality and quantity are in permanent decline. New BBQ grills rust out in a few years, if not months, appliance paint is so thin a sponge and a bit of cleanser removes the micron-thick coating, and on and on in endless examples of the landfill economy, as new products are soon dumped in the landfill due to near-zero quality control and/or planned obsolescence.

Free-lance writer Bill Rice, Jr. recently analyzed shrinkflation, the inexorable reduction in quantity: What Does Your Toilet Paper Have to Do With Inflation? Manufacturers have been engaging in “shrinkflation,” leaving consumers paying more for less, but stealthily.

In the guest post below, Bill looks at new car prices, and finds that official inflation for “new vehicles” from November 1983 to November 2013 measured only 43.8 percent… while actual car inflation (based on archived price records in Morris County, NJ) is 4.85 times higher than official CPI “new vehicle” inflation.

Prices for new cars sky-rocketed over 30 years (or did they?)
A lesson in ‘hedonic adjustments’
By Bill Rice, Jr.

In addition to grocery and household staples, the Annual Price Survey of Morris County, NJ lists the prices of new cars for each year. I was curious to learn how the price of a car the year I graduated from high school (1983) compared to the price of a car 30 years later in 2013. (The MC Price Survey ended in 2014).

What did I learn? Well, I learned that car prices went up a LOT in 30 years. Between 1979-1983 the least expensive car available, at least from this price survey, averaged $6,366. By comparison, the least expensive car in 2009-2013 averaged $19,879. This is a nominal price increase of 212.3 percent.

Now here’s the head-scratcher. According to the BLS, inflation for all goods (CPI-U) from August 1983 to August 2013 increased by 133.4 percent — that is, far less than the sample of inexpensive cars from Morris County, NJ.

But that’s just part of the inflation story. The BLS also publishes indexes in the category of “new vehicles.” According to these indexes, inflation for “new vehicles” from November 1983 to November 2013 measured only 43.8 percent. That is, actual car inflation (based on archived price records in Morris County, NJ) is 4.85 times higher than official CPI “new vehicle” inflation.

Charles Hugh Smith
Charles Hugh Smith is an American writer and blogger. He is the chief writer for the site "Of Two Minds". Started in 2005, this site has been listed No. 7 in CNBC's top alternative financial sites. His commentary is featured on a number of sites including: Zerohedge.com., The American Conservative and Peak Prosperity. He graduated from the University of Hawaii, Manoa in Honolulu. Charles Hugh Smith currently resides in Berkeley, California and Hilo, Hawaii.

Leave a Reply

Your email address will not be published. Required fields are marked *