Newsflash: Governments Lie, by Ron Paul

Who knew? From Ron Paul at ronpaulinstitute.org:

Bureau of Labor Statistics head Dr. Erika McEntarfer is one of the latest persons President Trump has told “you’re fired.” President Trump said this month that he fired Dr. McEntarfer because the president believed she manipulated jobs data. Manipulations, he stated, include the updated May and June BLS numbers showing the U.S. economy created 258,000 fewer jobs than originally reported, as well as the weaker than expected July jobs report. All of this, the president suggested, was designed to make President Trump look bad.

Following Dr. McEntarfer’s firing, many commenters worried that President Trump’s actions would create the perception that government unemployment and inflation data is manipulated to produce the numbers desired by the president. A loss of confidence in government statistics could impact demand for US Treasuries. This is because the value of Treasuries is adjusted based on the BLS-issued Consumer Price Index (CPI). If investors don’t trust the CPI figures, they can demand higher returns, increasing government’s interest payments.

President Trump is correct that BLS manipulates statistics related to the economy, but it has been doing so since long before Donald Trump moved to the White House.

For example, starting in 1994, the BLS stopped including “discouraged” workers who have stopped looking for work in the official unemployment figures. The BLS also includes those working part-time as employed even if the only reason they are working part-time is they cannot find full-time work. According to John Williams, publisher of the website Shadow Stats, including discouraged and part-time workers who want full-time work in the unemployment figures increases the unemployment rate by almost 20 percent!

The government also understates the effects of inflation. One way it does this is by using “chained CPI.” Chained CPI means that even if price inflation has made steak unaffordable for most Americans, the government does not consider their standard of living lowered if they can buy a “substitute” such as hamburger.

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