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A conservative economist makes a devastating case against his own inflation fear-mongering

Stephen Moore in 2003, when he served as president of the Club for Growth, an anti-tax group he cofounded in 1999.
Stephen Moore in 2003, when he served as president of the Club for Growth, an anti-tax group he cofounded in 1999.
Scott J. Ferrell/Congressional Quarterly/Getty Images
Dylan Matthews is a senior correspondent and head writer for Vox's Future Perfect section and has worked at Vox since 2014. He is particularly interested in global health and pandemic prevention, anti-poverty efforts, economic policy and theory, and conflicts about the right way to do philanthropy.

Here's Heritage Foundation chief economist Stephen Moore, arguing in a op-ed that the official numbers understate the true level of inflation:

Nobody believes the statistics out of Washington and often for good reasons. A 2% inflation rate. Ha. Most Americans see the rate of price increases for the things they have to buy — milk, bread, vegetables, medicines, health insurance premiums, college tuitions, gas at the pump — rising at sometimes two to three times faster than the official CPI.

Here's Moore in his 2000 book It's Getting Better All the Time: 100 Greatest Trends of the Last 100 Years, coauthored with the late Julian Simon, arguing that the official numbers overstate the true level of inflation:

In recent years the official inflation rate has been overstated by about 1 percentage point per year. The inflation calculations have not properly accounted for improved quality of products and the dramatic decline in price for new products, such as cellular telephones and computer software.

Nothing significant changed in the way that the inflation rate is calculated, vis-a-vis the phenomena Moore and Simon cited, between the book's publication and today. And for what it's worth, 2014 Stephen Moore is completely incorrect. It's true that some things have seen their prices go up faster than average. That's just how averages work. But on average, prices aren't going up much at all — even for food. There are a number of cognitive biases explaining why it may not feel that way to people — for example, stuff you buy more frequently may increase in price faster, even if it doesn't make up as much of your spending as less-frequently purchased things do. But those misperceptions don't change the underlying reality that inflation is too low these days.

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