Jason Furman Weighs in

He writes:

1. I agree with Jared that the 30-year debate is a distraction. Worse than that, it lets Bush off the hook by making the last six years look like a continuation of a long-standing trend rather than something peculiarly bad. This was the point I tried to make in my TAP posting.
2. I've never had a problem in the past making arguments about growing inequality and the minority of the gains going to the bottom 80 percent of Americans. I don't see why we need to make a levels argument to communicate this essentially relative point.
3. I agree with Dean that we're far from certain about the magnitude or meaning of new goods bias, variety bias, outlet substitution bias, or quality bias.
4. But I'm quite certain about upper-level substitution bias in the CPI. And unless someone tells me otherwise, I assume 0.34 percentage point per year is a reasonable estimate for it -- based on the first five years of the C-CPI-U. If we had a backcasted version of this we should all use it for intertemporal comparisons.