The consumer price index (CPI) for August came out today, revealing that inflation is up a tame 1.7 percent over the past 12 months. The Labor Department said that consumer prices declined 0.2 percent last month.
I expect the response to this number will be what people typically say: The government's numbers are much lower than their inflation.
Health care and education costs continue to increase at a rapid pace, so how can inflation be tame? Perhaps it has something to do with the tendency to remember price increases more than decreases.
Take this 1991 RadioShack (RSH) ad in a Buffalo, N.Y., newspaper for 15 technology items. Thirteen of the things 15 of those products did back then can now be done by just about any smartphone. By my count, the cost of the 13 items totals almost $3,055. A lower-end smartphone without a contract can be bought for less than 10 percent of this amount.
The only two items in the ad that can't be duplicated by a smartphone are the radar detector (though you can get smartphone apps that make today's radar detectors a lot more useful) and the three-way speaker with a massive 15-inch woofer.
Yet, look at what else your smartphone can do that RadioShack wasn't selling in the ad. You can get maps of anywhere, a weather station, free mail, direct access to book travel and information about anything, anywhere, at any time.
I'm not attesting to the accuracy of the U.S. Bureau of Labor and Statistics' CPI calculations. Rather, I'm suggesting that it might be our perceptions that are biased.
Research by the late Stanford communications professor Clifford Nass demonstrated that we have a tendency to remember negative experiences much more vividly than positive ones. We process good and bad information in different parts of our brains. Negative emotions involve more thinking, and we process the information more thoroughly. In short, bad has a stronger hold on us than good.
This ad is a bit of nostalgia that reminds us of products we likely haven't thought about in quite some time. For me, it sparked fond memories of my "brick" cell phone that had a 10-minute talk time and one-hour standby. And with a cost of $1 per minute to use it, maybe it was a good thing talk time was so limited.
I still think my inflation is way over 1.7 percent -- but then again, I'm human.
Author's note: Thanks to Steve Cichon at TrendingBuffalo.com for finding this ad.