My guess is that they do. Which makes me wonder why market commentators don't seem familiar with the concept. The immediate target of my wrath is Allan Sloan, who was on Market Place radio this morning celebrating the fact that the Wilshire 5000 index (the most broadly based index for publicly traded stocks) had crossed its 2000 peak. While this is true in nominal terms, if you adjust for inflation the Wilshire index is still about 20 percent below its 2000 peak. I don't attach any great significance to the stock market -- it is a measure of expected profits (insofar as investors are not high on irrational exuberance), not the well-being of the economy. But the media should at least get the numbers right. If someone needs a reason to party, go ahead and celebrate the new high for the Wilshire, but any real comparison adjusts for inflation.
--Dean Baker