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How can you believe that inflation is only a couple of percentage points? Have you seen the price of food, energy, and housing?

It is not important whether I believe that or not. If YOU don't believe in the CPI, then YOU have no case: to discuss inflation one can compare apples to apples. To be sure, on can view apples as inferior and think that oranges are better. But then use oranges instead of apples and do so consistently. IN other words, if you are dissatisfied with the CPI, find another measure and then show from the time series of that measure that inflation is high by historical standards.

To sit in an chair with a newspaper and merely criticize the existing knowledge for being imperfect does not consitute scientific inquiry. Inflation is low to the extent the extent that it is measured by the CPI. If you have other measures, offer them. And, if you do, please publish your findings in a peer review journal and forward them to the Fed. We all will be only grateful.

House prices aren't included in the CPI, "owner's equivalent rent" is. What's wrong with that?

You appear to misunderstand the objective of the CPI and cannot therefore conclude that it fails to reach that objective.

Inflation is defined for a given commodity: it is an increase in the monetary price of that commodity. It is therefore absolutely valid to speak, as you do, of inflation in the housing market, wage inflation, inflation in apples, etc.

The CPI attempts to measure average inflation, which is then inflation in a basket of commodities consumed by a typical consumer. Of course, therein lies the difficulty: what is the "typical" consumer. One can question decisions made in answering that question. If we are to have a measure of any operational significance, we have to agree on something reasonalbe, however imperfect it may be. The current CPI is such a measure. Given the changes in the culture and wealth of the coutnry, it is adjusted from time to time.

Now, your criticism of the CPI on the basis of housing is completely invalid. You complain that it does not include house Ownership. But why should it? Apparently, only because this happens to be what YOU prefer to buy. That is fine, but your consumption is not necessarily representative. The CPI does not include the cost of graduate studies, ownership of even rent of yachts, vacations in Europe and many other things you and I might be interested in. It is simply not the objective of the CPI to include these categories. And it is the objective of the Fed to keep the OVERALL inflation low --- as it is measured by the CPI --- and not of yours or mine favorite commodities.

Once again you have argued against a straw man: you are accusing the Fed of failure to achieve something that us not its objective.

Taxes aren't included in the CPI either.

Now, this is completely ridiculous. Inflation is a change in the monetary price of a given commodity or, in the case of the CPI, a given basket of commodities. It has nothing to do with what you pay for something else. TO determine inflation of apples, you focus on apples and disregard what one pays for books, transportation, or public goods. Taxes you pay are your expenditures on public goods (defense, etc.) Prices of those goods are completely irrelevant to the question of whether there is an inflation in apples or the basket underlying the CPI.

As I said earlier, you manipulate notions you do not understand. And I can see now why so: you argue instead of inquiring. Forming opinions before understanding is bound to result in fallacious conclusions. As I also mentioned ealier, the scientific method requires one to reserve judgment until evidence is gathered. You show not even an inclination to do so. Don't be surprised therefore that almost every statement you make is problematic.

Reading what Boskin Commission says is of little use if you don't understand the terms in which it states its finding. I would suggest that you simply refrain from that until you study some economics, in which you appear to be interested.