ABSTRACT
The public would rush to pay more for much higher quality. Then the average selling price of a mattress would rise even though the cost of a mattress of constant quality had actually diminished. The BLS applies their quality adjustment math, which implies that the new mattress is ½ times as good as the old one. The problem with the adjustment is that how fast a computer carries out basic logical operations is a very poor, indeed and almost irrelevant, measure of its computing power. The price of housing that figures in the CPI is the house and apartment rental rates. The bubble has had two dimensions, as most people are aware: there has been an explosion of new building, and the prices of homes—new and old—have escalated. Shadow Government Statistics is the name of an economic consulting firm whose mission it is to reevaluate government statistics.
