Nathan Newman wrote:
> >On Behalf Of Enrique Diaz-Alvarez
> > Cool! There's no inflation! And if anything goes up then we call it a
> > "sharp movement" and it doesn't count.
> > http://nypostonline.com/business/25545.htm
> > Doug, are things really *this* bad at the BLS? This Crudele guy tends to
> > exaggerate;is it true that without those "ex-anything that goes up"
> > adjustments inflation would have been an annualized 12% last month?
> Whether this is screwy depends on why we care about inflation. If we care
> about it in order to adjust social security and other spending to help
> people pay the bills, then it's a terrible distortion.
> But if it's to guide monetary policy, it seems like there is more argument
> for it. At least from the Greenspan-conventional wisdom perspective, the
> fear of inflation is largely based on the fears that "excess income" by
> consumers will bid up prices and ignite an inflationary cycle. Since the
> oil price spike is completely independent of consumer actions, it does seem
> that factoring out the OPEC oil price spike makes sense for a lot of policy
> -- Nathan Newman