Is the Middle Class Better Off? Economists' Poor Logic on New Goods

Matt O'Brien treated us to a classic case of bad reasoning by economists. A survey of elite economists (you know, the type of people that couldn't see an $8 trillion housing bubble) found that the vast majority said that the official income data understated the increase in the standard of living for the middle class over the last 35 years.

The explanation for this view is that new goods like cell phones and the Internet have vastly improved our standard of living in ways that are not picked u...