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I think there is a lot of inflation if you measure it properly. We say inflation is low because we adjust for quality. So they say sure, a car costs more now th

I think there is a lot of inflation if you measure it properly. We say inflation is low because we adjust for quality. So they say sure, a car costs more now than in 2000 but it has more features so if you adjust for quality it is cheaper. Same goes for other goods like computers, smartphones, etc. The problem is, the cheaper versions of these goods don't exist anymore, because the more expensive version is effectively required to not handicap yourself. Similarly, things like housing, healthcare costs, schooling costs, etc. are not well captured by the inflation metric, but have grown wildly in the last few decades. The purchasing power of the average person is probably worse now than it was in 2007 if you look at what people actually have to spend money on versus the artificial basket of quality adjusted goods used to measure inflation.

jennyyang 7y ago
The government changed the way they measured inflation to purposefully downplay it. For example, if they were measuring the cost of Levi's jeans, and they went up too high, they would replace them in their index with cheaper non-name brand jeans to show that inflation didn't occur. And same thing goes with groceries. When ice cream used to be a pint, it's now 14 oz. They have decreased the size of things like food packages over the last 15 years, and I don't think that's taken into consideration in the inflation index. Recently they decreased the size of orange juice by 15% but kept the price the same. That is the definition of inflation.
vertak 7y ago
I recently read of an alternate measure of inflation called the "Cost of Thriving Index" which aimed to capture the astute point you're making. See page 18 of this document: https://media4.manhattan-institute.org/sites/default/files/the-cost-of-thriving-index-OC.pdf https://media4.manhattan-institute.org/sites/default/files/t... I'm not economist but I've found this captures the feeling that although we're more productive and wealthier, it still feels harder to get ahead and live an average life.

jennyyang 7y ago

The government changed the way they measured inflation to purposefully downplay it. For example, if they were measuring the cost of Levi's jeans, and they went up too high, they would replace them in their index with cheaper non-name brand jeans to show that inflation didn't occur. And same thing goes with groceries. When ice cream used to be a pint, it's now 14 oz. They have decreased the size of things like food packages over the last 15 years, and I don't think that's taken into consideration in the inflation index. Recently they decreased the size of orange juice by 15% but kept the price the same. That is the definition of inflation.

vertak 7y ago

I recently read of an alternate measure of inflation called the "Cost of Thriving Index" which aimed to capture the astute point you're making. See page 18 of this document: https://media4.manhattan-institute.org/sites/default/files/the-cost-of-thriving-index-OC.pdf https://media4.manhattan-institute.org/sites/default/files/t... I'm not economist but I've found this captures the feeling that although we're more productive and wealthier, it still feels harder to get ahead and live an average life.