JF

4/ For example, our inflation-adjusted data say car prices have not increased since the mid-1990s. Obviously, that's not remotely true. What economists are saying is that cars have gotten better so the higher sticker price doesn't reflect inflation, it reflects higher quality.

5/ Fair enough. But, if you're a family that needs to buy a minivan, while it's nice that the 2018 Grand Caravan ($26,300 in 2018) has many features the 1996 Grand Caravan ($17,900 in 1996) did not, you still face the problem that you need an extra $8,500 to buy one.

6/ A key assumption of our inflation-adjusted analyses is that old products are still available. Don't like / can't afford the $26K 2018 Grand Caravan, go buy the $18K 1996 one instead. Except you can't. Same problem is even more pernicious in areas like housing and health care.

7/ Another huge problem with health care, especially, is that everyone has to pay for shared risk. If a million-dollar miracle cure needed by 1 in 1,000 households drives up everyone's insurance premium, that's not inflationary. You now have access to the million-dollar cure.

9/ So, start putting these things together, and you find a situation where major costs facing families have skyrocketed unsustainably in ways our economics is incapable of acknowledging. Then we gloss over the underlying assumptions and say "inflation-adjusted wages look good."

10/ When we say "inflation-adjusted wages look good," we are actually saying "if you could take your wage back to 1970 and spend it, you'd be better off than you were at the time with a 1970 wage." I mean, maybe that's interesting. But it doesn't describe lived experience.

11/ There are lots of good reasons to have our existing technical measures. Macroeconomists need them. But alongside them, we need a perspective that looks at the costs households actually face as compared to the wages that workers actually earn.