Anyone who's been to the grocery store lately or gotten a full tank of gas has been blown back by sticker shock. Milk and eggs, cell phone service and the electric bill--ordinary things cost more than they did a year ago. So do luxury goods, whether laptops or convertibles. But the Bureau of Labor Statistics reports that inflation is in check, with consumer prices up only 2.8% for the 12 months ended in September. The so-called core rate of inflation, excluding food and fuel, was 2.1%.
What gives? The problem may be the way the government calculates inflation. "The numbers are so below what people are actually experiencing that they no longer have credibility," says Walter J. Williams, an iconoclastic economist who has no academic appointment but can at least claim an M.B.A. from the Tuck School of Business at Dartmouth. His Shadow Government Statistics newsletter, he says, draws 1,000 online readers every month, and has a bit of a paranoid edge. Williams contends that inflation is really running at 10%--more than triple the official rate....MORE