Richardson_D wrote:
>> "The changes we have made have lowered the rate of growth [in the CPI]
>> between about half a percentage point and eight tenths of a percentage
>> point," BLS commissioner Katharine Abraham said at a press conference
>> in New York on Jan. 29 ….Abraham said the BLS planned to make a
>> much-anticipated announcement in mid- or late-March on how it would
>> employ geometric mean calculations in computing the CPI ….Among the
>> plans for changing the CPI, adopting geometric means may make the
>> greatest dent. Depending on how it is used, that adjustment alone
>> could cut up to a quarter percentage point from the index ….Earlier
>> that day, Federal Reserve Chairman Alan Greenspan told the Senate
>> Budget Committee that steps taken by BLS to improve the index probably
>> had reduced the amount the CPI overstates inflation to about
>> three-quarter of a percentage point. "They have probably cut the
>> potential bias significantly," Greenspan said ….(Reuters story, Jan.
>> 29).
So despite all Abraham's spirited defense of the CPI, Boskin & Greenspan
seem to have won the war. It reminds me of the right-wing war on public TV
- even if they fail in the goal of abolishing it, you get the institution
under attack to make all the changes you wanted in the first place. So now
we have a "bias-free" CPI and a center-right public TV system. I love
American politics.
Doug
