Tag Archives: Government Statistics

How does anyone take these people seriously? by Simon Black

The people that nobody should take seriously always take themselves extremely seriously. From Simon Black at sovereignman.com:

Last week, just before the canceled New Year’s holiday, the US federal government released updated dietary guidelines for the next five years.

You know what I’m talking about– these are the government guidelines that recommend we consume a certain amount of Calories, fats, protein, carbs, etc. every day.

I don’t know that anyone actually pays attention to this stuff; taking diet advice from the federal government is about as sensible as seeking moral direction from Congress.

But nevertheless the government still makes a big deal about its dietary standards.

In fact the Department of Health and Human Services convened an ‘expert committee’ of PhD researchers, physicians, nutritionists, and public health officials to come up with the new recommendations.

Here’s where it gets interesting: in its final report to the Department of Health and Human Services, the committee strongly recommended that Americans should reduce their sugar and alcohol intake.

This seems hardly controversial.

Yet the Department of Health and Human Services rejected this recommendation, stating that “there was not a preponderance of evidence in the Committee’s review . . . to substantiate changes to the quantitative limits for either added sugars or alcohol.”

Really? Not enough evidence?

There have been countless studies spanning decades of research showing the harmful effects that excess sugar has on the human body, especially in children. Parents know this from personal experience.

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GDP Growth Isn’t the Same Thing as Economic Growth, by Frank Shostak

Frank Shostak explores the fraud that is the Gross Domestic Product statistic, and its wider implications. From Shostak at mises.org:

To gain insight into the state of an economy, most financial experts and commentators rely on a statistic called the Gross Domestic Product (GDP). The GDP framework looks at the value of final goods and services produced during a particular time interval, usually a quarter or a year.

This statistic is constructed in accordance with the view that what drives an economy is not the production of wealth but rather its consumption. What matters here is the demand for final goods and services. Since consumer outlays are the largest part of the overall demand, it is commonly held that consumer demand is the key driver of economic growth.

All that matters in this view is the demand for goods, which in turn will give rise almost immediately to their supply. Because the supply of goods is taken for granted, this framework ignores the whole issue of the various stages of production that precede the emergence of the final good.

However, in order to manufacture a car, there is a need for coal to be employed in the production of steel, which in turn will be employed to manufacture an array of tools. These in turn are used to produce other tools and machinery and so on, until we reach the final stage of the production of a car. The harmonious interaction of the various stages of production results in the final product.

Within the GDP framework, the aspect of funding economic activity never emerges. In this framework goods emerge because of people’s desires. In the real world, it is not enough to have demand for goods – one must have the means to accommodate people’s desires. The means are various final goods that are required to sustain various individuals in the various stages of production.

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America’s Debt Dependence Makes It An Easy Economic Target, by Brandon Smith

Can a nation whose nominal debt is over $20 trillion and unfunded liabilities somewhere between $150-200 trillion bre considered strong? No. From Brandon Smith at alt-market.com:

There is a classic denial tactic that many people use when confronted with negative facts about a subject they have a personal attachment to; I would call it “deferral denial” — or a psychological postponing of reality.

For example, point out the fundamentals on the U.S. economy such as the fact that unemployment is not below 4% as official numbers suggest, but actually closer to 20% when you factor in U-6 measurements including the record 96 million people not counted because they have run out of unemployment benefits. Or point out that true consumer inflation in the U.S. is not around 3% as the Federal Reserve and the Bureau of Labor Statistics claims, but closer to 10% according to the way CPI used to be calculated before the government started rigging the numbers.  For a large part of the public including a lot of economic analysts, there is perhaps a momentary acceptance of the danger, but then an immediate deferral — “Well, maybe things will get worse down the road, 10 or 20 years from now, but it’s not that bad today…”

This is cognitive dissonance at its finest. The economy is in steep decline now, but the mind in denial says “it could be worse,” and this is how you get entire populations caught completely off guard by a financial crash. They could have easily seen the signs, but they desperately wanted to believe that all bad things happen in some illusory future, not today.

There is also another denial tactic I see often in the world of politics and economics, which is what I call “paying it backward.” This is what people do when they have a biased attachment to a person or institution and refuse to see the terrible implications of their actions. For example, when we point out that someone like Donald Trump makes destructive decisions, such as the continued support of Israel and Saudi Arabia in Syria and Yemen, or the reinstatement of funding for the White Helmets in Syria who are tied to ISIS, Trump supporters will often say “Well what about Obama?”

This is a game of shifting accountability. Is one person worse than the other? Possibly. I say give it time and make notes. However, the negative decisions of one politician we don’t like do not diminish the negative decisions of another politician we might like. They should BOTH be held accountable.

To continue reading: America’s Debt Dependence Makes It An Easy Economic Target

Before You Tell Me What You “Know,” Tell Me Your Sources, by Charles Hugh Smith

You can trust far few “facts” and much less “information” than you think, in a world where disinformation runs rampant. From Charles Hugh Smith at oftwominds.com:

We can no longer trust data and conclusions being published as impartial by institutions that were once trustworthy.
When someone says they “know” what’s happening on the ground in Syria, how can we assess the validity of their claim to knowledge, i.e. their claim to “know” “facts” or (gasp) “truth”?
When someone says they “know” the U.S. economy is growing and unemployment is at record lows, what is the basis of their claim to knowledge?
Before you tell me what you “know,” tell me your sources. We all know how this works nowadays: the sources are rigged or gamed to support the pre-selected narrative.
In “fake news,” the sources are designed to appear legitimate via official-sounding institutional titles for the source organizations and human “experts” / researchers, and the data that’s presented to support the “fake news” is also designed to be indistinguishable from legitimate data.
The cursory consumer of such content will be inclined to grant the institution, source and data as equal in legitimacy to other accepted sources. For example, if we read that the United Nations Labor Information Council has collected data showing the U.S. unemployment rate is actually 7.2% rather than the official 3.9%, the invocation of the UN and the precision of the data point suggests a legitimate source and data base.
But it’s “fake news;” there is no United Nations Labor Information Council (at least not to my knowledge).
Official sources have learned that the most effective way to propagate the sanctioned narratives is to rig or game the data and/or its interpretation. Thus the bailouts of the U.S. “too big to fail” financial institutions in 2008-09 were purposefully obscured; it took independent researchers to assemble all the bailout guarantees and publish the staggering total of over $16 trillion.
Official data is massaged to promote the official narrative. This is well-known to anyone who digs into the actual mechanics of the adjustments made to the raw data. For example, to mask real-world inflation, big-ticket expenses such as healthcare are minimized as a percentage of the basket of expenses being measured, and hedonic adjustments reduce the sticker price we actually pay.

Things Couldn’t Be Better–Right? by Jim Quinn

There’s less, a lot less, to this economy than the Wall Street and Washington cheerleaders would have you believe. From Jim Quinn at theburningplatform.com:

Donald Trump tells me our best days are ahead. Once his tax cut plan is passed, the future will be so bright I’ll have to wear shades.

Sometimes a single chart reveals the truth being obscured by the Deep State propaganda machine, working overtime selling their economic recovery narrative. The economy most certainly is booming for Wall Streeters and D.C. parasites sucking on the teet of Federal government largess. But for the average working deplorable, this supposed recovery has passed them by.

The cognitive dissonance is strong, as average Americans want to believe what their “leaders” are telling them to believe, but their personal financial situation contradicts the narrative. Even using the highly manipulated data peddled by the BLS, any critical thinking individual can see through the lies, misinformation and bullshit.

Let’s examine what has happened since 2015 and assess the truthfulness of the purveyors of propaganda running the Deep State looting and pillaging operation.

  • There are 5.7 million more Americans employed since the beginning of 2015, a pitiful 3.9% increase. Meanwhile, 2.7 million left the workforce because they supposedly don’t need a job to make a living.
  • The amount of Federal individual income tax collected by the government only rose by 3% between 2015 and 2017. If the number of employed was up 3.9% and wages supposedly grew by 5%, how could the government’s take only go up 3%? Maybe it’s because the jobs “created” were low paying shit service jobs and part-time jobs.
  • The average workweek is lower today than it was in 2015. Does this jive with 3% GDP growth? If the unemployment rate is really 4.1%, shouldn’t workers be putting in overtime and driving the weekly hours upward?
  • Now for the best data point of them all – real wages. According to the captured government drones at the BLS, real wages are up a cumulative 1.5% over the last two years. The supposed non-existent inflation has reduced your real wage increases by 70%. And let’s remember the inflation numbers put out by the BLS have been massaged so hard to achieve a happy ending, the BLS drones could work here:

Image result for massage parlor happy ending

To continue reading: Things Couldn’t Be Better–Right?


Lies And Distractions Surrounding The Diminishing Petrodollar, by Brandon Smith

Facts are mere inconveniences for mainstream and Wall Street economists. From Brandon Smith at alt-market.com:

There are a few important rules you have to follow if you want to join the consortium of mainstream economic con-men/analysts. Take special note if you plan on becoming one of these very “special” people:

1) Never discuss the reality that government fiscal statistics are not the true picture of the health of the economy. Just present the stats at face value to the public and quickly move on.

2) Almost always focus on false positives. Give the masses a delusional sense of recovery by pointing desperately at the few indicators that paint a rosier picture.  Always mention a higher stock market as a symbol of an improving economy even though the stock market is irrelevant to the fundamentals of the economy. In fact, pretend the stock market is the ONLY thing that matters. Period.

3) Never talk about falling demand. Avoid mention of this at all costs. Instead, bring up “rising supply” and pretend as if demand is not a factor even worth considering.

4) Call any article that discusses the numerous and substantial negatives in the economy “doom porn.” Ask “where is the collapse?” a lot, when the collapse in fundamentals is right in front of your face.

5)  Avoid debate on the health of the economy when you can, but if cornered, misrepresent the data whenever possible. Muddle the discussion with minutia and circular logic.

6) When a crash occurs, act like you had been the one warning about the danger all along. For good measure, make sure alternative economic analysts do not get credit for correct examinations of the fiscal system.

7) Argue that there was nothing special about their warnings and predictions and that “everyone else saw it coming too;” otherwise you might be out of a job.

Now, if you follow these rules most of the time, or religiously, then you have a good shot at becoming the next Paul Krugman or one of the many hucksters at Forbes, Bloomberg or Reuters. A cushy job and comfortable salary await you. Good luck and Godspeed!

However, say you are one of those weird people cursed with a conscience; becoming a vapid mouthpiece for the establishment may not sound very appealing. Or, maybe you just have OCD and you can’t stand the idea of “creative math” when it comes to economic data. Whatever the case may be, you want to outline the deeper facts of the economy because the economy is life — it is the structure which holds together our civilization, and if we lie about it in the short term, then we only set ourselves up for catastrophe in the long run. Welcome to another dimension. Welcome to the world of alternative economics.

To continue reading: Lies And Distractions Surrounding The Diminishing Petrodollar

The Economic Collapse Began Long Ago, by Gerold

As SLL has argued, the US is in a slow-motion depression. Gerold at theburningplatform.com provides additional support. 

My forty-year old Godson was belly-aching about the lack of jobs. He whined it’s all the Boomers’ fault.

I tore a few strips off him. I asked him WTF am I wasting my time researching and writing these articles if he doesn’t read them. Since I had him cornered, I told him a few things he obviously didn’t want to hear.

We are in an economic depression. It was predicted in Strauss and Howe’s 1997 book “The Fourth Turning” [Link]  that occurs every four generations as a time of great turmoil. Their Generational Theory is a framework which explains where we are, how we got here and where we’re going. For more details see ‘Notes” at end.

This is a ‘Stealth Depression.’ The government is doing its utmost to hide it with fake statistics. Their ass media handmaidens are carrying their water telling us everything is wonderful. And, if my Godson believes the ass media, he deserves his fate.

At the bottom of this deception are fake inflation (CPI) statistics. They distort everything else because most economic data is ‘inflation adjusted.’ Consequently, when other economic data such as GDP growth is adjusted with fake inflation statistics, then those numbers are also distorted.

Note: there’s a difference between inflation (increased money supply) and Consumer Price Index (CPI), but I used the terms interchangeably to make it easier for my Godson to understand.

Anyone who buys stuff or reads John Williams ShadowStats [Link] knows that the actual inflation rate in 2017 is roughly 5% and NOT the bullshit 2% (or less) that the government claims. I say “roughly” because I rounded the numbers to make it easier for him to understand.

I wish I could have shown him the ShadowStats graph below.

Consequently, every so-called 2017 statistic that’s “inflation-adjusted” is off by 3%. (Hint: 2 – 5 = -3)

The government claims that (inflation adjusted) 2017 GDP growth is roughly 2%. Since it’s understated by 3%, it means the economy is “growing” at negative 1%. In other words, the economy is SHRINKING by 1%. And, that’s only this year.

To continue reading; The Economic Collapse Began Long Ago

What’s the Real Unemployment Rate? That’s the Wrong Question, by Charles Hugh Smith

If a statistic is based on a faulty model, the statistic will be faulty. From Charles Hugh Smith at oftwominds.com:

Numbers like gross domestic product (GDP) and the unemployment rate no longer provide insight into how our economy works.

As the status quo narratives and metrics lose their explanatory value, defenders of the status quo frantically leap into attack mode, declaring any skeptical inquiry as a “conspiracy” or “hoax.” A recent example can be found in that high-brow defender of the privileged status quo, The New Yorker.

(We can identify a new socio-pathological syndrome called The New Yorker Syndrome: if all is right on the Upper West Side, all is right with the world. In other words: since me and my top 2% pals are doing great, everything’s going great.)

The New Yorker writer defended the way the unemployment rate is calculated by saying “we’ve got top people on this–top people:” we should accept the official metrics as meaningful because they’re the work of PhD economists– you know, “top people” who are far above peasants’ non-expert skepticism.

The only problem with this “top people” defense is it is increasingly clear that the economic models that PhD economists claim are working well are in fact failing. They are failing for a number of reasons I list in my book Why Our Status Quo Failed and Is Beyond Reform, one of which is: the current metrics are answering the wrong questions, and as a result they’ve lost their explanatory and predictive value.

Since we optimize what we measure, the “top people” are trying to optimize increasingly meaningless metrics–GDP, unemployment, etc. The only possible output of optimizing meaningless metrics is economic stagnation and failure:precisely what the real-world economy is experiencing.

Numbers like gross domestic product (GDP) and the unemployment rate no longer provide insight into how our economy is changing. The Keynesian Cargo Cult’s insistence that “aggregate demand” is the key to “growth” and widespread prosperity, and that “aggregate demand” is a function of monetary policy, no longer tracks the real-world economy.

All that might have been true in 1933, but it no longer maps to the real economy, in which increasingly extreme Keynesian monetary and fiscal policies have done nothing but widen income and wealth inequality.

The unemployment rate is nothing but guesswork hocus-pocus. The current system has the Bureau of Labor Statistics (BLS) and other agencies guessing how many people in the workforce are “discouraged” and should be deleted from the workforce count.

Then they guess how many new businesses started up and how many closed (the birth/death model) and how many people might have been hired/let go as a result of the birth/death model guesswork.

They derive data by collecting self-reported statistics–the most unreliable source of data possible, as people will adjust their answers to avoid reporting whatever looks bad and exaggerating what looks good. Even if they are scrupulous, does collecting time sheets really provide insight into the economy, employment, and labor force utilization?

Why are we defending hocus-pocus guesswork, when the IRS has hard data on employment, wages, income and the small businesses that are paying estimated taxes for their employees and owners? This data is extracted confidentially– the taxpayers’ identities remain private.

Click on the 2014 link in All Returns: Sources of Income, Adjustments Deductions and Exemptions, and Tax Items: Individual Income Tax Returns Filed and Sources of Income (this is the latest publicly available data)

The reports can be downloaded and opened in Excel. There is a treasure trove of data on wages and other income sources. These report tell us precisely how many workers are in each income bracket.

To continue reading: What’s the Real Unemployment Rate? That’s the Wrong Question

China “Suspends” Another Unofficial PMI Data Release To Make “Major Adjustment”, by Tyler Durden

One of the better gauges of totalitarianism in a society: how much trouble do you get in for telling the truth? By that measure, nothing’s really changed in China over the last few decades. From Tyler Durden at zerohedge.com:

For the second time in two months, an economic data series that indicate drastically weak performance in China has been “suspended.” Having seen Markit/Caixin’s flash gauge of China’s manufacturing discontinued in October (having plunged notably divergently from the government’s official data), Bloomberg reports that the publishers of the alternative China Minxin PMI will stop updating the series to make a “major adjustment.”

Guess which time series was just “suspended”…

As Bloomberg details,

Release of the unofficial purchasing managers index jointly compiled by China Minsheng Banking Corp. and the China Academy of New Supply-side Economics will be suspended starting this month, the Beijing-based academy said in an e-mailed statement Monday, about six hours before the latest monthly data were scheduled for release.

Minxin’s suspension is the second in recent months as policy makers in the world’s second-largest economy struggle to arrest a deceleration in growth. Another early estimate of China’s manufacturing sector, a flash gauge of a purchasing managers index compiled by Markit Economics and sponsored by Caixin Media, was discontinued Oct. 1.

Minxin’s PMI readings are based on a monthly survey covering more than 4,000 companies, about 70 percent of which are smaller enterprises. The private gauges have shown a more volatile picture than the official PMIs in the past year.

The manufacturing PMI declined to 42.4 in November from 43.3 in October, while the non-manufacturing reading fell to 42.9 from 44.2, according the the latest release. The factory gauge fell to a record low of 41.9 in August. China’s official PMI from the National Bureau of Statistics fell to a three-year low of 49.6 in November.

For September, the now-discontinued flash Markit/Caixin PMI fell to a six-year low, while the official PMI reading showed a modest improvement.

To continue reading: China “Suspends” Another Unofficial PMI Dat Release