@Sclass
I’ve only had problems when the items I want are those that are coveted by richer people. Money and wealth are relative not absolute after all.
I want to make sure I understand what you are saying. Let me start with a pedantic aside just to make sure we share vocabulary. Wealth is absolute in my mind, while I agree money is not absolute. Wealth being the objects you legitimately lay claim to. Money is a medium used to trade positions of wealth with, but it is not really wealth. Money itself is variable, given time and even the act of exchange may change the value of money. During most times, money can be exchanged for wealth and visa-versa at low friction via market places, which gives the illusion that money is an absolute measure. I'm fairly certain this is what you mean, but I'm being pedantic just for clarity.
If I understand you correctly, you're saying that living with low inflation is about avoiding things other people, particularly the wealthy want? So buying computers in the 1990s was to experience high inflation because wealthier people wanted them, but they have deflated now that rich folks don't want them? Will food go to 0 inflation (other than short term events like crop failures and energy related events) once those poor of China, Africa, India, etc. become effectively middle class? Also, what do you think regarding Jacob's contention:
I'll accept that but turn it around and ask rhetorically what technological wizardry the upper classes are currently buying at the cost of a small car (2021) that the hoi polloi will eventually see in 2071 for the price of $50?
(I can think of a few science fiction ideas like gene sequencing and CRISPR cures for some genetic disease... but as far as I know, they're just that. It's not for sale at the local CRISPR shop for $2500 ... like a 1987s XT computer was.)
Does this explain the low inflation CPI suggests we've experienced over the last decade or so? Does this imply systems like FIRE/ERE only work when there is nothing exciting to buy? Will the audience go away once there are fun play things only the rich have but the middle class want? Perhaps flights to Mars, good VR tech, holodecks or some such will push inflation up and interest in ERE down?
If your view is just to look at demand side impulses, I like it as a useful mental shortcut, but is that useful for measuring long term changes? I have no idea what housing demand looked like in the spring of 1993, even though I was alive at that point. However, I can get sales prices from Zillow on specific houses back then to measure the rate of change. Is there a way to measure that sort of change via demand side thinking?
@Campitor
I've only seen CPI used by politicians on news programs to bloviate on the success of their economic policies based off the CPI numbers.
This is not to disagree with your point, but should we outlaw shovels because bad guys use them as deadly weapons then bury the victims? Or outlaw the internet because lots of stupid things are said and done via the internet? All tools have good and bad about them. Perhaps CPI is not a great measure, but given the problem space and a desire to not go too overboard with solutioning, it seems like a pretty decent compromise. Of course if the ultimate intended uses of CPI are things you are against (another place where politics enters) I can understand you might be against CPI. A sort of "starve the beast" approach of attacking the tools that enable activities you are against is a rational position, but it isn't clear that is the position you hold.
As we age, our spending patterns change. We may need expensive medicine, pay for a visiting nurse, contract labor to do work we used to do when younger...
One of the things Adam Curtis, a documentary filmmaker notes how much we revel in our sort of "independence" as unique individuals. To quote him,
I'm saying that, with the rise of individualism, you tend to get the corrosion of the other idea of social bonds and communal networks, because everyone is on their own... If you ask me what my politics are, I'm very much a creature of my time. I don't really have any.
Without going into it too deeply, one of the legitimate attacks against CPI is that our society, starting back in the 1960s, started to embrace the individualism which makes measures more difficult. You get things like
intersectionality and you start saying, you can't even do CPI based upon region or age group. If your attack on CPI is to say that our culture is much more splintered than when CPI as a measure was adopted, I'm with you on that. If then you say, that there are legitimate issues CPI is trying to solve, but fails to fully solve, I must ask, what are the alternative approaches you suggest? If a bit like Curtis, you reply you don't have any better alternative ideas, I understand your point, but I think it takes a model to beat a model. Just saying "x is no good" without resolving the underlying needs with alternatives strikes me as no solution at all. Either you are against the needs or you are against the model and if you are against the needs, you need no alternative, but if you are against the model, you must have an alternative model.
Incidentally, I include myself in this, with my solution to the problem of using raw CPI is to try to use exemplars to judge yourself against, as a sort of checksum against CPI. CPI is probably good enough for those who don't care that much on the topic, but for folks like myself, exemplars look a bit more precise and give a bit more insight into the problem. It is why I wrote this topic. It is why I point at using Jacob as a method of evaluation. I will admit everyone doing it themselves is probably more accurate, but I think exemplars are the right mix of efficient and specific enough. A "Am I like Jacob?" is probably good enough to then go measuring your own inflation, particularly over a mid-term timeframe (e.g. 20-30 years). For 60 years, you might want two different exemplars, Jacob and a older similarly conservative spender. That is the model I'm suggesting.