We think inflation is terrible because prices are higher than we remember

I'm usually a fan of Paul Krugman. He's a humane commentator on our condition who often gets reality right. But he made an argument today in his NYTimes newsletter (link may not work as it is a newsletter, but there it is) which completely misses the point of what people are talking about when we complain about inflation.

 

He observes that he gets huge push back when he observes that inflation is coming down. He earnestly discusses the various measures of inflation; there are several and they serve different analytical and policy purposes. He assures the reader that he is not gaming the system when he chooses which measure is relevant in which context. I believe him.

 

Krugman asserts:

The question of what’s happening to inflation is, or should be, a purely technical issue.

But probably most of us don't think any of this makes any sense because we know it requires more of our dollars than it used to once to go about our daily business. I am going to a warehouse store later today; I know that I'll spend 15-20 percent more dollars than I would have in 2019.

The pandemic has left a rift in our consciousness. There was before; there is after. Everything costs more. That's what inflation means in common understanding.

"Inflation" is not whether some measures favored by economists are going up -- and are currently going down. Inflation in every day life means that prices are higher (some much higher) than "before." We simply won't notice the trend line until the disruption is further in the past -- when the meaning of "before" changes. Might that be this year?

I hope so.