Grade Inflation Revisited

What's in a grade? A grade is supposed to be a measure of how much one actually "understands" the material taught in a class. Right? Well then, the "best" grading policy is the one that conveys the most information about the largest number of people in a given class. Loosely anyway. Here's an information theoretic assessment of grades at Princeton: [Information Theory]. The actual faculty proposals: [Grade proposals].

I wonder about the efficacy of combating grade inflation at the level of policy. Perhaps what's really required is some kind of instruction for professors/TAs in how to grade.