The Washington Post

Dear inflation truthers: This is how averages work


Call it Amity's Law. As a debate with an inflation truther grows longer, the probability of them asking how inflation could be low when some prices are rising faster than the average of all prices approaches one.

Okay, that isn't exactly how they'll put it. Instead, inflation truthers will darkly note that the costs of stamps, coffee, haircuts, movie tickets, summer cottages, college tuition, and, of course, gasoline are all increasing more than the overall inflation rate. And they won't mention anything that's increasing less, let alone things that are falling in price. (You know, like your computer-telephone-camera-camcorder-GPS-music player-calculator-alarm clock-flashlight—aka your smartphone).

In other words, they'll say that, if you only look at the highest-rising prices, inflation is higher than the official numbers says it is. Cue the spooky music.

Then they'll triumphantly raise an eyebrow from beneath their tinfoil hats, because they're right: some prices really are increasing faster than average. And they'll tell you that you can learn all about this shocking fact, along with the rest of the government's plot to hide this secret inflation, from the internet. If, that is, you're willing to pay $175 to subscribe to "unskewed" statistics from a guy who keeps predicting hyperinflation, but never increases his subscription prices.

Game, set, and match?

Well, not if you know as much math as a third-grader. See, the inflation rate is just the weighted average of all the price changes in the economy. So unless every price is changing by the exact same amount, some of them will be increasing more than average and some of them will be increasing less. That's how averages work.

But in the hands of an inflation truther, this mathematical banality achieves a kind of totemic significance. It's the grassy knoll inside Area 51 where Janet Yellen is playing a record backwards that says hyperinflation is coming.

What inflation truthers don't understand, aside from basic math, is that this isn't an indictment of the government's credibility. It's an indictment of their own.

Matt O'Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.



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