A recent press release from the Bureau of Labor Statistics tells me that the cost of living is rising at only a measured pace. The latest Consumer Price Index (CPI) measurement says inflation was only 2.4% over the past 12 months. Excepting a brief spurt during the pandemic, measured inflation has been consistently tame since the late 1980’s. I don’t buy it. Let’s dig into what the inflation numbers really mean.
I like talking about inflation because it’s unintuitive in surprising ways. Too, I’m animated by what I view as a conspiracy to pretend the cost of living is rising slower than it really is. It’s a minor conspiracy. There are no robes or rituals, just a tacit agreement between politicians and economists that the country does better when inflation is perceived to be lower. Some of the downward bias exerted on the data is methodological, but this Viewpoint will focus on a deeper, philosophical bias about what the concept of “cost of living” ought to mean.
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