Right. But @dvt is correct that the Dodge Caravan example undermines that point. The author's premise is that economists' measures of inflation understate the true amount of inflation--the prices of goods grew faster than you would expect using accepted inflation measures. But the Dodge Caravan's price grew slower than economists' inflation measures would predict. It should cost $28,647 today, but costs only $26,300.
It was the author that uses the Dodge Caravan example. Obviously not every single item is going to fit the trend, but why pick such an item as your example.
Your other points are also incorrect. For example, auto loan interest rates are half of what they were in 1996: https://images.app.goo.gl/Bn3ACY7GLV8rFsxj7. The total interest paid on a 36 month loan at 8% (common in 1996) is higher than on a 60 month loan at 4.5% (common today).
For instance, I could say "Prime numbers are relatively very rare. For instance, take the first five positive integers, 1,2,3,4,5. 60% of them are prime". I'm both right about my statement and I have a bizarre choice of an example.
> 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.
Wait, what's not remotely true? That inflation also affects car prices? Is he being serious here? At the very least, can we agree that prices are comparable?
The economists are saying that due to additional features/horsepower/fuel economy etc in the base models we're getting the equivalent of 1.5 cars for 27K in 2018 vs getting 1 car for 18K in 1996, so that both 1996 and 2018 dollars buy equivalent amounts of car.
OTOH a $18K annual rent in 1996 is now $36K. So in a basket that's half car half rent, the economists calculations say that $18K car and $18K rent in 1996 is equivalent to 18K car + 36K rent in 2018 for 50% inflation.
The OP is saying that's bullshit. The car may be 50% better, but you can't buy part of a car. So the equivalent of $18K + $18K in 1996 is now $27K + $36K for 75% inflation.
But (assuming a 1996->2019 comparison) if you're looking at sedans, you can often go 'down market' for something that's objectively superior by almost every metric for very similar money.
For example, a mid-model Ford Taurus from 1996 (say $19K) is a much worse car than the base-model VW Jetta from 2020 that costs the same money. Slower, worse gas mileage, vastly inferior technology, safety equipment and so on.
Also let's not forget a good rate on a car loan in 1996 was 9%.
If you wanted to buy a BMW with 250hp in 1996 that would run 0-60 in about 5.5s and seat four adults, you were going to be buying an M3 for about $40,000.
If you want to do the same thing in 2020, you're going to buy a 330i for almost the exact same money only with a bunch more safety tech, 50% better fuel economy, more luggage space, more passenger space ...
(More on quality adjustments: https://www.brookings.edu/blog/up-front/2018/07/25/measuring... )
The use of a basket of products to calculate something that the government calls inflation (but isn't), doesn't reflect the true lost value of money and only benefits the people who get the inflation money first. If you hold on to your money, you are being basically piled. This is no service for society, but to policymakers and to business dealing with the state.
Here's an economy in, say, 1990. It has X amount of money.
Here's "the same" economy in 2020, except it has 20% more people, and 20% more produced per worker per year, so it produces 44% more output than it did in 1990. (All numbers made up on the spot for illustration purposes. Your economic growth may vary.) When I say "44% more output", I don't mean measured by dollars; I mean actual amount of stuff produced - cars and steel and food and movies.
Now, what should the money supply be in 2020? X? 1.2 X (to account for population growth)? 1.44 X (to account for amount of stuff being produced)? If the money supply is only X (no inflation, by your definition), then things that cost $1 in 1990 would cost $0.69 in 2020. That's... not what most of us consider to be "zero inflation". That's deflation.
The normal definition of zero inflation is that the cost of things remains constant, not that the total amount of money remains constant. That's reasonable because most of us get paid in a fixed number of dollars, not in a fixed fraction of the money supply.
There are different views about what inflation is, and certainly, monetary inflation is a way more useful measure than price inflation:
Also what you think is good bad depends strongly on where you fit in. If you're an economist then you think 10% year over year rent inflation is good and 10% year over year wage inflation as bad. If you actually work for a living then you think the reverse.
Even the article you linked says "However, there is a general consensus on the importance and responsibility of central banks and monetary authorities in setting public expectations of price inflation and in trying to control it." That is, economists recognize the importance and value of price inflation as a measure, while they are divided on how to consider monetary inflation.
I've given you a couple of chances to make a case that monetary inflation is the one that matters, and you have provided exactly zero (other than the bare claim that it was so). So I'm going to stick with my position, which is that your claim is wrong.
This is in keeping with the theme of the tweets that there are non-inflationary factors that are increasing costs above inflation, such as increased shared risk in health insurance driving up costs for the median. (You can't opt out of that new shared risk because some insurance powers that be have included that in the policy and premium calculations, and so you just have to pay more.)
Thus if those two minivan prices are actually identical if adjusted for inflation then that ... sort of does deflate the point he's making.
He explicitly says that right before? "4/ For example, our inflation-adjusted data say car prices have not increased since the mid-1990s."
I believe his argument is more around how we're calculating inflation, i.e. that prices have actually gone up more than economists claim through inflation. Looking at inflation adjusted numbers in the fifth thread would lead to circular reasoning and is besides his point. That said I am not great at dissecting these kinds of twitter threads and may be misinterpreting too; I agree that the way he is arguing it is confusing.