How bad can it get

NYTimes covers the issue of inflation, and just how bad it is.
Life Is Better; It Isn’t Better. Which Is It?

In an election year, for one side, the worse the picture the better "vote for me and I'll save you"

"For the last few weeks, there has been a roiling debate, both within the Democratic Party and between Democrats and Republicans, about how to describe living standards in this country. Among Democrats, the debate is really about how to talk to voters about the economy as the party tries to reclaim control of Congress this year and the White House in 2008.

One group of Democrats says that it’s time to stop pulling punches and acknowledge that, at best, life is marginally better than it was a generation ago. The other group argues that the middle class’s current problems should not obscure enormous progress made over the last few decades."


Example : Snow Blowers
"But the experts keep fighting over living standards, largely because the single most commonly used measure of well-being — how much money people make — can be very misleading. This is where inflation, the second big issue, comes in.

In the early 1950’s, Toro began selling mass-market snow blowers, which weighed up to 500 pounds and cost at least $150. As far as the Bureau of the Labor Statistics was concerned, however, snow blowers did not exist until 1978. That was the year when the machines began to be counted in the Consumer Price Index, the source of the official inflation rate. By then, the cheapest model sold for about $100.

In practical terms, this was an enormous price decline compared with the 1950’s, because incomes had risen enormously over this period. Yet the price index completely missed it and, by doing so, overstated inflation. It counted the rising cost of cars and groceries but not the falling cost of snow blowers.

The cellphone and the air-conditioner also improved middle-class life, and also took years to get into the inflation numbers, by which point their prices had plummeted. Wal-Mart’s effect on prices is another blind spot in the index, which considers something sold at a discount to be lower quality (and, therefore, not truly a bargain) than something sold at full price — even when the items are identical, like a box of Tide or a can of Campbell’s Soup."

But don't confuse the voter with facts, just reported statistics.

"Think about it: we live longer than people did in the 1970’s, we’re healthier while alive, we graduate from college in much greater numbers, we’re surrounded by new gadgets and we live in bigger houses. Is it really plausible, as some Democrats claim, that the middle class has made only marginal progress?"