Andy Kessler’s column “The Fed Is Flying Blind on Inflation” overstates technology’s impact on aggregate consumer-price inflation (Inside View, May 13). The problem with the hedonic-adjusted prices is that the increased quality assumed by the government may offer only marginal benefit to the end-user or consumer. The Bureau of Labor Statistics likely overstates the quality adjustment captured by the aggregate consumer.
For example, though a larger TV may pack more value for its price, it doesn’t increase a consumer’s productivity. Likewise, is a 400-channel package an improvement over a 200-channel package? This principle can also be applied to cellphones and laptops, which offer product upgrades on a continual basis with many new features and technological improvements, but with marginal benefit to the end-user at a higher real cost.
Patrick O. Fox