These past couple of days, we've seen this argument that inflation numbers are fake (which they are) because the powers that be manipulate them through the substitution effect.

You know: "Your grandfather used to eat grass-fed ribeye. You eat industrial chicken instead because that's what you can afford for the same amount of money. So you spend the same amount of money, so "no inflation"."

Which is true, as I said. But it also works the other way around: your grandfather couldn't even dream of buying a computer, or flying regularly, or many other things that are now orders of magnitude cheaper.

What % of your grandfather's income was spent on that ribeye? How much did he spend on internet, mobile and travel? Are you sure if you completely eliminate all the things that your grandfather just did not buy, and you lived like he did, you wouldn't be able to afford grass-fed ribeye?

So either way, all we can do is compare the basket of goods that we actually buy. If you want to add a measure of the quality of those goods, you may think it's very straightforward, but I wouldn't be so sure about that.

And again, I'm not defending the obviously fake and manipulated official "data", I'm just saying that people tend to oversimplify too much, too often.