The Number: Why the Consumer Price Index Is Way More Important Than You Think

This is part 6 of my series on Who Is Government?: The Untold Story of Public Service by Michael Lewis.

Most chapters in this book have a person at the center. A scientist, an engineer, a government worker doing something remarkable. This chapter is different. John Lanchester’s essay is about a number. Just one number. And by the end, you’ll understand why that one number matters more than almost anything else the government produces.

That number is the Consumer Price Index, the CPI.

What Even Is the CPI?

Here’s the simple version: the CPI measures inflation. It tracks how much prices are going up over time. The official definition calls it “a measure of the average change over time in the prices paid by consumers for a representative basket of consumer goods and services.”

Sounds straightforward enough, right?

But here’s the thing: the CPI isn’t just an interesting economic stat that economists argue about on cable news. It’s wired directly into your life whether you know it or not. Social Security payments are pegged to it. Food stamp eligibility is tied to it. Pensions, tax thresholds, salary agreements for millions of workers, divorce settlements, court orders. The Bureau of Labor Statistics itself says no other federal statistic “has a direct impact on the lives of everyday Americans quite like the Consumer Price Index.”

So we’re not talking about a number that lives inside a spreadsheet somewhere. We’re talking about a number that determines how much money your grandmother gets from Social Security. Whether a family can afford groceries this month. Whether your paycheck keeps pace with rising prices.

The Cheese Problem (Yes, Really)

Lanchester is great at making abstract things concrete. So here’s how he explains the sheer insanity of what the Bureau of Labor Statistics actually has to do.

Start with cheese. How do you track the price of cheese across all of America? You don’t just pick any cheese. You go into a specific store, figure out what cheese sells the most, and use random sampling to select a specific brand, type, and package size to track. That item gets repriced every month or two, in the same store, for four years. Then you rotate in a new sample.

And that’s just cheese. The BLS has to do this for thousands of items. Not just food. Apparel, medical care, energy, transportation, rent, dog grooming services, hunting knives, scuba equipment, table tennis rackets, sheet music, outboard motors. Everything.

Here’s a detail Lanchester clearly loved: wrestling. The BLS had to decide whether professional wrestling is a sporting event or entertainment. They put it in the entertainment category, alongside flea markets and art shows. And, apparently unique among the thousands of items in the CPI database, Wrestling gets a capital “W.” Lanchester guesses there was some drama in that particular meeting.

Shelter Eats Everything

The biggest single category in the CPI is “shelter,” which is the BLS’s word for housing. It takes up 36.3 percent of the whole index. That’s more than twice what food takes up.

But here’s where it gets weird. Even if you own your home outright and have no mortgage, the CPI still counts a housing cost for you. It uses something called “owners’ equivalent rent” which is basically: what would you pay if you rented your own house? That number goes up as rents go up, even if your actual housing costs haven’t moved at all.

So yes, the CPI number might not match your personal experience of inflation. The BLS admits this openly. It “seldom” mirrors what any individual consumer actually experiences.

The Misery Index and Politics

So this one number, built from millions of data points across the whole country, gets turned into a political weapon.

Lanchester walks through the “misery index,” which is just unemployment plus inflation. An economist invented it in the 1960s. Reagan renamed it and made it famous. And it has a pretty solid historical record: when it’s in double digits during an election year, the incumbent loses. It happened to Carter in 1980, to George H.W. Bush in 1992, to Trump in 2020 (the pandemic blew the number up).

But here’s the problem, and it’s the most interesting part of the whole essay. In 2024, the misery index was 7.2. Good by historical standards. Inflation had fallen from a peak of over 9 percent in 2022 down to about 3 percent. Unemployment was low. By the numbers, the economy was doing well.

It didn’t matter.

Polls showed a majority of Americans thought the country was in a recession. Most thought inflation was still rising. Nearly half thought the stock market was down and unemployment was at a 50-year high. All of those things were wrong. The S&P was up. Unemployment was at a 50-year low.

Lanchester calls it a “vibecession” and asks the obvious question: what’s going on?

Why Your Grocery Bill Feels Like Everything

His answer is actually pretty compelling. Food inflation hits you in the face every single day. You notice it at breakfast, at lunch, at dinner. But you might buy a hunting knife once a decade. You pay for car insurance once a year. Those price changes barely register emotionally even if they’re real.

Food at home went up 28 percent over five years. Even as the overall inflation number came way down, grocery store prices were still higher than before. And crucially, when the government says inflation is falling, people sometimes hear “prices are falling.” They’re not. The rate of increase is slowing down. The sticker price is still higher than it was. That’s not a lie, but it’s a gap between statistical reality and lived experience, and it’s a wide one.

The Bigger Stakes

This is where Lanchester’s essay gets genuinely serious. He’s not just writing about economics. He’s writing about what happens when people stop believing in numbers.

He quotes Carl Sagan writing in 1995, describing a dark vision of America where “unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness.” The essay doesn’t name-check it, but you can feel the Project 2025 stuff hanging over the writing. That document literally calls for Congress to redesign the CPI basket and repeatedly calls inflation a crisis even when the data shows otherwise. Social media is full of posts calling the CPI “fake data,” “a hoax,” “propaganda.”

And that’s why it matters. The CPI is imperfect. The BLS will tell you that itself. It doesn’t perfectly capture your personal experience with prices. It’s been debated, contested, and revised constantly since it was first calculated in 1921. But it’s built on the idea that you can try to measure a complicated reality and produce a number that captures a general truth. That’s the Enlightenment project. That’s the foundation of evidence-based democracy.

So here’s what happened. John Lanchester wrote an essay that seems like it’s about a dry economic statistic. But it’s actually about whether we still believe in the idea that numbers can tell a truth worth listening to. Whether we’ll still do the hard, unglamorous work of counting things accurately. Whether a society can hold together when its shared facts keep getting contested.

The BLS has been doing that work for over a hundred years. Thousands of data collectors pricing cheese and sausage and hunting knives in stores across America. Running the numbers. Publishing everything. Making the methodology completely transparent.

That work matters. A lot. Even if most of us never think about it until inflation hits 9 percent and suddenly nobody can stop thinking about anything else.

Book: Who Is Government?: The Untold Story of Public Service by Michael Lewis | ISBN: 9798217047802

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