Thursday, August 17, 2006

Can we get our stories straight here?

Cracks are beginning to surface in the edifice of conventional wisdom when it comes to inflation. The New York Times says everything is still hunky-dory, don't worry, be happy -- as does nearly everyone else, to Chuck Butler's understandable consternation. But the Washington Post has a story headlined "Cost of Living Gets Costlier:"

Despite efforts by the Federal Reserve to bring the increases under control, consumer prices rose twice as fast in July as in the month before. So far this year, inflation is running at an annual rate of 4.8 percent, higher than any yearly increase since 1991.

Is my profession at least starting to wake up to reality? Could it be that all the hedonics, substitution, and other feats of statistical legerdemain are starting to run out of steam?

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