No economist who hopes to avoid professional ridicule would try to deny that consumption is a better measure of long-term living standards than the most widely cited income distribution figures, which do not even add transfer payments or subtract taxes.
A 2005 study by Dirk Krueger and Fabrizio Perri concluded that any increase in income inequality from 1980 to 2003 "has not been accompanied by a corresponding rise in consumption inequality." In my book "Income and Wealth," I show that inequality of consumption is about 40 percent lower than inequality of income (before taxes and transfers) and that consumption inequality declined slightly between 1986 and 1999-2001.
The New York Times editorial takes sides in a little spat between American Enterprise Institute economists Aparna Mathur and Kevin Hassett on the right, and Jason Furman of the Center on Budget and Policy Priorities and Jared Bernstein of the Economic Policy Institute on the left.
Calculating the annual growth of personal consumption spending per capita for the middle fifth of households, Mathur and Hassett wrote, "The average annual consumption growth for the middle class was less than 1 percent in the period from 1990 to 1994, rose to 1.5 percent in the period from 1995 to 1999, and jumped to more than 2 percent in the period from 2000 to 2005."