New York City--Park Slope!--on less than $30,000 a year
State of the Union address

Barry Ritholtz drops one . . .

. . . badly. In "Why Michael Boskin Deserves Our Contempt", Mr. Ritholtz uses words like "absurd", "nonsense", and "fraud" to describe the work of the Boskin Commission. It's the kind of superficial, quasi-populist junk that should be far beneath a widely read writer for "investment professionals".

If most critics of the CPI had even a slight inkling of how damn difficult it is to construct a single, national measure of inflation, they'd be ashamed of themselves. For some details, and sharp replies to some of the most common criticisms and complaints, I highly recommend John S. Greenlees and Robert B. McClelland, "Addressing Misconceptions About the Consumer Price Index". (I have no connection, financial or otherwise, with the Bureau of Labor Statistics, other than I once spoke with Mr. Greenlees, for about an hour, nearly thirty years ago.)

For extra fun, critics of the CPI should look at two of William Nordhaus's papers: "Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not" and "Two Centuries of Productivity Growth in Computing". From the latter:

. . . this study develops estimates of the growth in computer power relying on performance rather than components; the price declines using performance-based measures are markedly larger than those reported in the official statistics.

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