The CPI is misleading because it does silly things such as counting increases in CPU speed as “getting more computing for your money.” If all you use your computer for is word processing then you’re really not getting 1000x “more computing” for your money today than you were in the 1980s, you’re getting only minor increases in productivity.
If all you use your computer for is word processing then you can buy a low-end desktop for very little money. Computers (and other consumer electronics) are cheaper now than they have ever been. Uninformed whining about hedonic adjustments in CPI is so tiresome.
How many average home computer users are 1000X more productive with a computer today than they were with a 1980s computer? The CPI is the consumer price index. It doesn’t cover business uses of computers which take more advantage of the improved performance.
No it measures CPU speed, memory, etc under the assumption that scaling these provide some kind of tangible benefit to warrant the idea that we’re getting “more computer for less money” but these benefits are clearly nowhere even close to a linear relationship with CPU speed.
Productivity was an example of a benefit I chose off the cuff but you could choose others. Are today’s video game consoles 1000X more fun than a NES? Given that many people actually prefer old NES games and are even willing to pay inflated prices to collect them suggests the answer is a resounding no.
You are getting more computer for your money. And only a tiny niche of collectors are foolish enough to waste a lot of money on old video games. You can find the same hobbyist collectors for anything: figurines, model trains, coins, etc. Collectors are economically meaningless.
The question is not: "are you getting more computer for your money?"
The question is: "are you getting (anywhere near) a linear scaling of computer for your money?"
Because to me the answer to the second question is a resounding "no" and the strongest evidence of that is all the people walking around with high-end iPhones who can barely afford rent on tiny single-bedroom apartments.
Nothing on FRED suggests you're correct.