Last month I called attention to an analysis by BLS researchers John Greenlees and Robert McClelland of some of the claims by John Williams of Shadowstats about the consequences for reported inflation of assorted technical decisions made by the BLS. Williams asked me to update with a link to his response to the BLS study. I am happy to do so, along with offering some further observations of my own.
You can follow the link to Shadowstats’ response to Greenlees and McClelland and judge for yourself, but my impression is that the response is more philosophical than quantitative. In a separate phone conversation, Williams further clarified the Shadowstats methodology. Here’s what John said to me:
I’m not going back and recalculating the CPI. All I’m doing is going back to the government’s estimates of what the effect would be and using that as an ad factor to the reported statistics.
I had formed the mistaken impression that Williams was indeed trying to go back and recalculate measures such as the CPI based on a retrospective application of the historical BLS methodology. I found the specific quantitative results provided by Greenlees and McClelland to be convincing demonstrations that this could not be the case. I take further comfort in the understanding that Williams agrees that his numbers indeed do not represent the outcome of such a procedure.