Post-crash review: What if our inflation measurements were terribly wrong?

We're still fighting over the causes and remedies of the Great Depression -- 80 years later after the crash of '29.

I'll be pleasantly surprised if humanity is still able to debate the causes of the crash of '08 in 2088. In the happy event that any sentience is around for that discussion, I wonder if they'll consider systemic errors in measuring inflation to be significant contributors to a "complexity crash".

We're not there yet. A Google Scholar search on inflation rate" "cost of ownership" corrected doesn't return anything interesting as of 11/30/08. My May 2007 and June 2007 posts appear to have been rejected by the meme-space meta-mind (love the sound of that!).

That's ok, I can be persistent.

I'll try another example.

I last bought a SONY Trinitron CRT TV about ten years ago. It cost me about $350 at the time and has not cost me a moment's time post-purchase. It will probably work 20 years from now, though by then it will only work with illegal DRM-stripped media.

Today, by contrast, my neighbor asked my advice on his TV purchase. LCD or Plasma? Should he invest in software to do computer-based image calibration? Will the LCDs really last 60,000 hours, or will they need maintenance within 5 years? Will the embedded OS crash and how often? When current DRM barriers are hacked, will the TV become obsolete? Assuming my neighbor's hourly cost is $70/hour, how much will his TV service cost him over his lifespan?

Does anyone lucid imagine that the lifecycle total cost of ownership of his TV will be comparable to the TV I bought ten years ago? Will the increased enjoyment (dubious, since humans adopt rapidly to such changes) justify the massively increased cost of ownership?

Now, I suspect we're hitting rock bottom in terms of the cost of ownership. I believe the quality of Chinese exports (probably including food) is improving from a very low nadir, and I think (pray?) consumers are beginning to consider life cycle costs.

From the perspective of understanding the crash '08, however, it's the past decade that counts. During that time we've supposedly had an adjusted inflation rate of less than 3%. What if we were measuring the wrong numbers? What if the life-cycle adjusted cost-of-ownership inflation rate were really 3-8%? What would that say about what our monetary policy was doing? Could our historically low fed rates, based on the published inflation rates, have been ridiculously low compared to the adjusted rate? If the true inflation rate were 6-7%, what would that say about middle-income wage collapse? How would such an economy have reacted to a sudden contraction in credit?

Ok, I tried! I hope my Google Scholar search turns up more articles in a few months.

Update: Thinking about this, I wonder how long after the technology explosions of the early 20th century people began making intelligent purchases. There must have been a time when most people didn't really know what they were buying, when they couldn't have been making very wise choices ...