If one knows that the figures are cooked, one may be
able to uncook them to some extent, and have a better
idea of what is going on economically.
There are other methods. It is interesting to plot
real estate and stock prices against the price of gold or
other precious-metal commodities, or against the price
of oil or natural gas. Quite revealing.
On May 9, 9:20 am, "John Galt" <whoisjohng...@[EMAIL PROTECTED]
> wrote:
> "Jorge Cruz Rodriguez" <jxro...@[EMAIL PROTECTED]
> wrote in
messagenews:e9fb8c3e-1=
09e-4153-ad43-8db4ef7f1226@[EMAIL PROTECTED]
> I notice no one commented on this. Does that mean everyone
> agrees with it? It's old news?
>
> [JG]
>
> To me, it's one of those "if true, what can be done?" kind of issues.
>
> One can only note that the OECD hasn't sent up any sort of red flag over
> these matters, and it is their charter to do so, if true.
>
> JG
>
> On May 7, 2:56 pm, "*Anarcissie*" <anarcis...@[EMAIL PROTECTED]
> wrote:
>
> > Numbers Racket
> > Why the economy is worse than we know
> > KEVIN PHILLIPS
> > Harper's Magazine v.316, n.1896 1may2008
>
> >
http://www.mindfully.org/Reform/2008/Pollyanna-Creep-Economy1may08.htm
>
> > Mindfully.org note:
> > This article is from the original. It is not complete. To obtain the
> > complete article, please go to Harper's Magazine.
>
> > Kevin Phillips's new book, Bad Money: Reckless Finance, Failed
> > Politics, and the Global Crisis of American Capitalism, was published
> > last month by Viking.
>
> > If Wa****ngton's harping on weapons of mass destruction was essential
> > to buoy public sup****t for the invasion of Iraq, the use of deceptive
> > statistics has played its own vital role in convincing many Americans
> > that the U.S. economy is stronger, fairer, more productive, more
> > dominant, and richer with op****tunity than it actually is.
>
> > The corruption has tainted the very measures that most shape public
> > perception of the economy=97the monthly Consumer Price Index (CPI),
> > which serves as the chief bellwether of inflation; the quarterly Gross
> > Domestic Product (GDP), which tracks the U.S. economy's overall
> > growth; and the monthly unemployment figure, which for the general
> > public is perhaps the most vivid indicator of economic health or
> > infirmity. Not only do governments, businesses, and individuals use
> > these yardsticks in their decision-making but minor revisions in the
> > data can mean major changes in household circumstances=97inflation
> > measurements help determine interest rates, federal interest payments
> > on the national debt, and cost-of-living increases for wages,
> > pensions, and Social Security benefits. And, of course, our statistics
> > have political consequences too. An administration is helped when it
> > can mouth banalities about price levels being "anchored" as food and
> > energy costs begin to soar.
>
> > The truth, though it would not exactly set Americans free, would at
> > least open a window to wider economic and political understanding.
> > Readers should ask themselves how much angrier the electorate might be
> > if the media, over the past five years, had been citing 8 percent
> > unemployment (instead of 5 percent), 5 percent inflation (instead of 2
> > percent), and average annual growth in the 1 percent range (instead of
> > the 3=964 percent range). We might ponder as well who profits from a
low=
-
> > growth U.S. economy hidden under statistical camouflage. Might it be
> > Wa****ngton politicos and affluent elites, anxious to mislead voters,
> > coddle the financial markets, and tamp down expensive cost-of-living
> > increases for wages and pensions?
>
> > Let me stipulate: the deception arose gradually, at no stage stemming
> > from any concerted or cynical scheme. There was no grand conspiracy,
> > just accumulating op****tunisms. As we will see, the political blame
> > for the slow, piecemeal distortion is bipartisan=97both Democratic and
> > Republican administrations had a hand in the abetting of political
> > dishonesty, reckless debt, and a casino-like financial sector. To see
> > how, we must revisit forty years of economic and statistical
> > dissembling.
>
> > A SHORT HISTORY OF "POLLYANNA CREEP"
>
> > The story starts after the inauguration of John F. Kennedy in 1961,
> > when high jobless numbers marred the image of Camelot-on-the-Potomac
> > and the new administration appointed a committee to weigh changes. The
> > result, implemented a few years later, was that out-of-work Americans
> > who had stopped looking for jobs=97even if this was because none could
> > he found=97were labeled "discouraged workers" and excluded from the
> > ranks of the unemployed, where many, if not most, of them had been
> > previously classified. Lyndon Johnson, for his part, was widely
> > rumored to have personally scrutinized and sometimes tweaked Gross
> > National Product numbers before their release; and by the 1969 fiscal
> > year, Johnson had orchestrated a "unified budget" that combined Social
> > Security with the rest of the federal outlays. This innovation allowed
> > the surplus receipts in the former to mask the emerging deficit in the
> > latter.
>
> > Richard Nixon, besides continuing the unified budget, developed his
> > own taste for statistical improvement. He proposed albeit
> > unsuccessfully=97that the Labor Department, which prepared both
> > seasonally adjusted and non-adjusted unemployment numbers, should just
> > publish whichever number was lower. In a more consequential move, he
> > asked his second Federal Reserve chairman, Arthur Burns, to develop
> > what became an ultimately famous division between "core" inflation and
> > headline inflation. It the Consumer Price Index was calculated by
> > tracking a bundle of prices, so-called core inflation would simply
> > exclude, because of "volatility," categories that happened to he
> > troublesome: at that time, food and energy. Core inflation could he
> > spotlighted when the headline number was embarrassing, as it was in
> > 1973 and 1974. (The economic commentator Barry Ritholtz has joked that
> > core inflation is better called "inflation ex-inflation"=97i.e.,
> > inflation after the inflation has been excluded.)
>
> > I n 1983, under the Reagan Administration, inflation was further
> > finagled when the Bureau of Labor Statistics decided that housing,
> > too, was overstating the Consumer Price Index; the BLS substituted an
> > entirely different "Owner Equivalent Rent" measurement, based on what
> > a homeowner might get for renting his or her house. This methodology,
> > controversial at the time but still in place today, simply sidestepped
> > what was happening in the real world of homeowner costs. Because low
> > inflation encourages low interest rates, which in turn make it much
> > easier to borrow money, the BLS's decision no doubt encouraged, during
> > the late 1980s, the large and often speculative expansion in private
> > debt=97much of which involved real estate, and some of which went
> > spectacularly bad between 1989 and 1992 in the savings-and-loan, real
> > estate, and junk-bond scandals. Also, on the unemployment front, as
> > Austan Goolsbee pointed out in his New York Times op-ed, the Reagan
> > Administration further trimmed the number by reclassifying members of
> > the military as "employed" instead of outside the labor force.
>
> > The distortional inclinations of the next president, George H.W. Bush,
> > came into focus in 1990, when Michael Boskin, the chairman of his
> > Council of Economic Advisers, proposed to reorient U.S. economic
> > statistics principally to reduce the measured rate of inflation. His
> > stated grand ambition was to move the calculus away from old
> > industrial-era methodologies toward the emerging services economy and
> > the expanding retail and financial sectors. Skeptics, however,
> > countered that the underlying goal, driven by worry over federal
> > budget deficits, was to reduce the inflation rate in order to reduce
> > federal payments=97from interest on the national debt to
cost-of-living
> > outlays for government employees, retirees, and Social Security
> > recipients.
>
> > It was left to the Clinton Administration to implement these
> > convoluted CPI measurements, which were reiterated in 1996 through a
> > commission headed by Boskin and promoted by Federal Reserve Chairman
> > Alan Greenspan. The Clintonites also extended the Pollyanna Creep of
> > the nation's employment figures. Although expunged from the ranks of
> > the unemployed, discouraged workers had nevertheless been counted in
> > the larger workforce. But in 1994, the Bureau of Labor Statistics
> > redefined the workforce to include only that small percentage of the
> > discouraged who had been seeking work for less than a year. The
longer-
> > term discouraged=97some 4 million U.S. adults=97fell out of the main
> > monthly tally. Some now call them the "hidden unemployed." For its
> > last four years, the Clinton Administration also thinned the monthly
> > household economic sampling by one sixth, from 60,000 to 50,000, and a
> > dispro****tionate number of the dropped households were in the inner
> > cities; the reduced sample (and a new adjustment formula) is believed
> > to have reduced black unemployment estimates and eased worsening
> > poverty figures.
>
> > Despite the present Bush Administration's overall penchant for
> > manipulating data (e.g., Iraq, climate change), it has yet to match
> > its predecessor in economic revisions. In 2002, the administration
> > did, however, for two months fail to publish the Mass Layoff
> > Statistics re****t, because of its embarrassing nature after the 2001
> > recession had supposedly ended; it introduced, that same year, an
> > "experimental" new CPI calculation (the C-CPI-U), which shaved another
> > 0.3 percent off the official CPI; and since 2006 it has stopped
> > publi****ng the M-3 money supply numbers, which captured rising
> > inflationary impetus from bank credit activity. In 2005, Bush
> > proposed, but Congress shunned, a new, narrower historical wage basis
> > for calculating future retiree Social Security benefits.
>
> > By late last year, the Gallup Poll re****ted that public faith in the
> > federal government had sunk below even post-Watergate levels. Whether
> > statistical deceit played any direct role is unclear, but it does seem
> > that citizens have got the right general idea. After forty years of
> > manipulation, more than a few measurements of the U.S. economy have
> > been distorted beyond recognition.
>
> > AMERICA'S "OPACITY" CRISIS
>
> > Transparency is the hallmark of democracy, but we now find ourselves
> > with economic
>
> ...
>
> read more =BB
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