Editorial
Keeping Up Statistical Appearances
Last week, supporters of the current administration rejoiced over job numbers released by the Bureau of Labor and Statistics (BLS). For the first time since the administration came to power, the official unemployment number fell below 8%. Keynesian cheerleaders all claimed the numbers meant we are surely on the road to economic recovery, just in time for Christmas, and also, the election. Others saw through this ruse.
The situation on the ground looks nothing like a recovery. 23 million people are still out of work or chronically underemployed. This number is expected to rise dramatically next year. The situation in Washington should not give anyone cause for optimism. Politicians refuse to look honestly and intelligently at the cause of our economic malaise, and so real solutions are not taken seriously or acted upon. It is much easier and less painful to simply recalculate the numbers and redefine the terms until a rosier picture is presented. There is only blind hope that at some point, for some reason, things might change. But nothing will change for the better if we only stay the course.
The truth is the long term solutions to our economic quagmire involve some short term pain. Re-evaluating the economic role of an institution as insidious and behemoth as the Federal Reserve will inconvenience some people, and those people happen to have a lot of power. Similarly, the idea of ending government programs and closing down superfluous departments will always upset someone because it means someone will stop getting a government check.
No one wants to upset the apple cart, even if all the apples are rotten.
Not all of the unemployed are counted in the BLS unemployment numbers. This is no secret. In 1994 government statisticians came up with the term "discouraged worker" to remove entire swaths of people from the unemployment statistic. Now all the government has to do to improve the unemployment numbers is discourage people from looking for a job.
Far more unintended consequences are created in Washington than jobs.
Ideally, the business sector should be able to depend on sound numbers from the BLS, but smart business leaders know that trust in these numbers leads to bad decisions and failure. In regards to the recent jobs numbers, investor Jim Rogers recently stated "I have learned not to take advice from the government, especially the US government, which frequently misleads its citizens." He also noted the election just around the corner, suggesting timing as an extra incentive to keep fudging the statistics.
The real drivers of the productive economy can't afford to take risks based on false numbers. This is why economist John Williams created Shadow Government Statistics, utilizing more traditional methodologies and definitions to show business decision makers the real economic picture, warts and all. He shows the real unemployment rate to be a staggering 22.8%.
This is a difficult figure to accept as the actual truth. Perhaps if the politicians did, the people would finally demand real change and real solutions. Perhaps they would consider that all of the so-called stimulus spending, quantitative easing and mountains of regulation from Washington has only crippled the economy. Perhaps people would come to understand that fewer checks handed out from the public sector would mean more checks available in the private sector, and a return to real prosperity instead of just the appearance of it.
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Posted by Just John on 10/16/12 10:39 PM
Aloha,
It is not too bad being a 'Dirt Farmer' here on the Big Island... we live in paradise. We are the Hawaiian mountain men up here on the SW flank of Mauna Loa @ 3500 feet above sea level. Like the bears in Goldiocks with their porridge. Not too hot and not too cold, yum just right. I plant mulch on bare rock and soil springs up. Growing redskin potatos, white skin purple sweet potatos, chinese white figs, purple mission figs, many herbs such as parsley, sage, rosemary and thyme. Have a Bay Tree for the bay leaf. White pineapples (although they would grow bigger and faster at lower elevation), a Gala apple, an Eva's Pride peach, a Hood pear, 2 Mamoth Lowquat and kabocha squash. Just planting Beets and am making a bed for onions. Been bringing a cubic yard of mulch home at least once a week for more than 4 years,,,greenwaste yard is 45 miles away one way in Kailua/Kona so it must be a complete trip with all shopping for the week as well. At least it is still free for the loading, yes i load myself and unload as well. Keeps me fit.
I always wish the best for ya'll or I would not be writing.
Aloha!
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Posted by dotti on 10/16/12 05:37 PM
@Dave jr.
You said: "With a little enforcement, the unemployment numbers can be brought down, catapulting our economy back to health!"
I believe that they actually do that. When someone has been unemployed for a year, don't they drop off the unemployment rolls? Or is it when they drop off unemployment payments?
I recently heard on TN news that they were implementing a policy of kicking someone off of the unemployment rolls if they turned down what the bureaucrats considered to be "suitable employment". My first thought was that it was a great way to make the statistics look better.
John, I don't know if it's true that misery loves company, but I know that you have LOTS of company out there.
I am 65 and my hubby is 71. We are on SS and Medicare. Fortunately, we have some other income, but I suspect things are going to get worse before they get better. Your garden may produce more for you than a traditional job would if things get really tough. Hubby and I have also taken up gardening with the thought that it would be especially beneficial if we hit really tough times.
Like DB, I wish you good fortune in your endeavors.
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Posted by Just John on 10/16/12 02:11 PM
Aloha,
Since I have no job or prospect of one, I work on my tiny piece of land to grow the food that will grow to feed my family. I am one of the many who last saw work of the traditional sense in 2007. Opened my B&B in March of 2008 after building it with my own hands (and that of my wife). That took more than two years as I started clearing the pad in August of 2005. It is still empty, who can go on vacation to a remote location during this downturn. If I have no income... how do they expect me to pay income taxes.
Being 58+ with no 401k or other means of future earnings (spent them building the B&B), I am prepared/preparing to live simply even if they remove my last form of future support social security. So what if I payed into it since I was 16. I can do without the lies, so can you.
Reply from The Daily Bell
Good luck!
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Posted by dave jr on 10/16/12 06:58 AM
Fed/gov has an ace in the hole (acehole?) Legislate the amount of time one can remain unemployed. With a little enforcement, the unemployment numbers can be brought down, catapulting our economy back to health!
The meme is that employment figures are a measure of economic health. We could all be bust'in rocks with 0% unemployment, but the standard of living wouldn't be so good.
Also, that government can DO anything to recover an economy if only the right man were in the oval office or there was a certain majority in congress. Government could help by DOING less. Regulation beyond protecting liberty and property does not enhance an economy in the long run, only hobbles it.
