The fight on the right over inflation has only heated up since I last wrote about it here. Among the other recent developments, the American Enterprise Institute's James Pethokoukis had an article in The Week under the headline "The weird obsession that's ruining the GOP." David Leonhardt weighed in in the New York Times on the side of Pethokoukis against Amity Shlaes.
In my view, though, the debate is far from resolved. Here's the latest good example of why. In a post at the American Enterprise Institute, Mark Perry listed airfare as one of the reasons "why Amity Shlaes is dead wrong about inflation." Not just wrong, mind you, but "dead wrong." Professor Perry writes:
If you're flying, you'll save a lot of money today compared to 2000. Adjusted for inflation, the average airfare in 2000 was $434.44 according to data from Airlines for America, compared to the average price of a ticket in 2013 of $362.85 (most recent data available). Therefore, your real airfare is 16.5% lower today than in 2000, and you'll save about $72 per person, and $286 for a family of four if you travel by air for your summer vacation.
(I think there may be some issues with Professor Perry's use of data here — click through and have a look yourself if you are so inclined. I have emailed him a query and will update if I hear back from him. Update: Professor Perry, in response to my query, has revised his post so that it now reads:
If you're flying, you'll save a lot of money today compared to 2000. Adjusted for inflation, the average airfare in 2000 was $425.44 (expressed in 2013 dollars using the CPI) according to data from Airlines for America, compared to the average price of a ticket in 2013 of $362.85 (most recent data available). Therefore, your real airfare is 14.5% lower today than in 2000, and you'll save about $62 per person, and $246 for a family of four if you travel by air for your summer vacation.
But that's beside the point for now.)
Meanwhile, here is an Associated Press news article from yesterday headlined "US Airfares on the Rise, Outpacing Inflation":
The average roundtrip ticket within the U.S., including taxes, reached $509.15 in the first six months of this year, up nearly $14 from the same period last year. Domestic airfare continues to outpace inflation, rising 2.7 percent compared to the 2.1 percent gain in the Consumer Price Index.
Airfare has gone up 10.7 percent in the past five years — after adjusting for inflation — according to an Associated Press analysis of data from the Airlines Reporting Corp., which processes ticket transactions for airlines and more than 9,400 travel agencies, including websites such as Expedia and Orbitz.
… The airfare figures don't take into account the slew of fees travelers now face for checking bags, getting extra legroom, boarding early or purchasing a pair of headphones. Those fees now bring in $3.3 billion a year for U.S. airlines and have helped them return consistent annual profits for the last four years.