I’ll be interested in whether Dick Cheney tries to claim real wages are rising again. It is true that the BLS reporting of nominal average hourly earnings is 7% higher than it was as of December 2001, but so is its reporting of consumer prices. We have seen lots of confusion on this score including some conservatives criticizing New York Times writings for reporting real income changes. The oddest seems to be this from Donald Luskin:
Be that as it may, there is no unique virtue to inflation-adjusting — except that it makes all changes in income look worse, which well serves the liberal agenda of the Times’s economic reporting during an election year.
As he often does, Brad DeLong get the economics right. To show that this no inflation adjustment idea is a fair and balanced absurdity, Matthew Yglesias applies to nominal GDP growth under President Carter. Of course, the early 1920’s in Germany were truly the “boom years” as noted by Atrios.
Ignoring the fact that inflation has exceeded the growth in nominal income for most households serves the agenda of the Bush apologists. Let’s see if Dick Cheney continues his lies on the economy tonight. But I guess the real contest is to see whether he lies about the economy or about national security more.