The Inflation You Feel Is Not the Inflation They Measure

A lesson the 1970s already taught us—and we forgot

Every inflation cycle produces two economies.

One exists in data tables, indices, and press releases.
The other exists in kitchens, leases, and commutes.

When officials announce that inflation is “cooling,” they are speaking truthfully about the first economy.
When households say life is getting harder, they are speaking truthfully about the second.

This disconnect is not new.
We have seen it before—most clearly in the 1970s—and we misunderstood it then, too.

Inflation as measured vs. inflation as lived

Modern inflation metrics were built for macroeconomic stability, not for human experience.

CPI asks:

How fast is the average price of a broad basket of goods changing?

Households ask:

Can I still afford the life I had five years ago without feeling squeezed?

Those questions diverge whenever inflation concentrates in:

Non-optional expenses
High-frequency purchases
Costs tied to place and identity

This divergence defined the 1970s—and it defines today.

The 1970s: when the math said one thing and the public felt another

Looking back, the 1970s are remembered as an era of “high inflation.”
But that framing is too coarse.

What people actually experienced was cost-of-living instability:

Food prices spiking after oil shocks
Gas lines and price controls
Housing costs rising faster than wages
Mortgage rates destroying mobility

Even when headline inflation briefly slowed, households didn’t feel relief—because the structure of daily life had changed.

Eating out became rarer.
Driving became strategic.
Housing became something you clung to, not upgraded.

Sound familiar?

The political fallout was not caused by inflation numbers.
It was caused by the sense that the rules had changed permanently.

Food inflation: the oldest signal of instability

Throughout history, food prices have been the most politically volatile component of inflation.

From ancient Rome to revolutionary France to the 1970s oil shock, rising food costs have always mattered more than averages.

Why?

Because food:

Is purchased frequently
Is deeply remembered
Has moral weight (“I should be able to feed my family”)

In the 1970s, food inflation often outpaced CPI—and dominated perception.

Today, the pattern repeats:

Official food inflation: mid-single digits
Experienced food inflation: closer to double digits
Shrinkflation replacing outright price hikes

Statistically defensible.
Psychologically corrosive.

Housing: inflation as loss of place

Post-WWII America experienced benign housing inflation.

Homes got larger.
Mortgages got cheaper.
Rising prices were offset by rising wages and mobility.

The 1970s broke that model:

Mortgage rates surged
Homeownership became fragile
Renters absorbed sudden jumps

Today, we have recreated the worst part of that era without the wage growth.

Housing inflation now functions as existential pressure:

Rent increases arrive in shocks
Mortgage rates freeze people in place
Insurance and taxes rise regardless of income

Official shelter inflation understates this because it smooths volatility.
People don’t experience smoothing.
They experience letters and deadlines.

Transportation: from freedom to constraint

In the post-war era, transportation costs fell in real terms.
Cars became cheaper, highways expanded, gas was stable.

The 1970s shattered that assumption.
Transportation became unpredictable—and suddenly political.

Today’s version is quieter but similar:

Volatile gas prices
Expensive, fragile vehicles
Repair costs that rival monthly rent
Insurance increases that feel unaccountable

Even if averages stabilize, volatility itself is inflationary to the mind.

Instability feels like cost.

The post-2008 lesson we ignored

After the Great Financial Crisis, inflation stayed low—but something else happened.

Asset prices inflated instead of consumer prices.

Housing, education, healthcare, and insurance all rose faster than wages while CPI remained subdued.

Households adapted by:

Taking on more debt
Accepting lower quality
Delaying life milestones

This adaptation masked stress—until the pandemic shock exposed it.

When inflation finally arrived, it landed on an already stretched system.

That’s why today’s inflation feels worse than the 1970s to many people:

Less margin
More fixed costs
Fewer escape valves

The ratchet effect: why inflation never feels “over”

Historically, inflation leaves scars because prices rarely reverse.

The 1970s ended, but:

Eating out never fully returned to its old frequency
Energy efficiency became mandatory
Household budgeting became more defensive

Today’s disinflation repeats the pattern.

Prices rise quickly.
They stabilize.
Life does not reset.

Instead, households internalize austerity as normal.

That is not recovery.
That is retraining.

A human-weighted inflation index, then and now

If you weighted inflation by emotional and financial salience instead of economic theory, both the 1970s and today would look similar:

Food: overstated in impact, understated in CPI
Housing: smoothed statistically, jagged in reality
Transportation: volatile and memorable
Discretionary goods: largely irrelevant to perception

By this measure, perceived inflation in both eras runs well above official numbers—often two to three times higher.

This is not mass delusion.
It is measurement mismatch.

Why institutional messaging keeps failing

In the 1970s, officials insisted inflation was “transitory” too.
They were not lying—they were incomplete.

Today’s reassurances fail for the same reason:

They focus on rates, not levels
Averages, not constraints
Math, not memory

You cannot persuade people that life is affordable by showing them that TVs are cheaper.

The enduring lesson

Every inflationary era teaches the same lesson:

Stability is not about prices rising slowly—it’s about lives remaining navigable.

When inflation concentrates in food, housing, and transportation, it becomes political—even if CPI says it’s mild.

We learned this in the 1970s.
We forgot it in the 1990s.
We ignored it after 2008.

Now we are relearning it the hard way.

The question that actually matters

The public is not asking:

What is inflation this month?

They are asking:

Can I still live here, eat like this, and move freely without fear?

Until policy answers that question, inflation will remain “high” in the only sense that truly matters.

Not in spreadsheets.
In lives.

The Inner Monologue