We have wondered how the market, the unemployment statistics and other indicators seem to be getting better while looking at our neighborhood and locale, it doesn't seem so.
Dick Morris writes a fine article that validates our feelings. It is well worth reading.
It all leads to our understanding that the statistics are being adjusted to make things look better to help Obama get re-elected. So much for the most ethical administration in the history of the country!
It is time to let Mr. Obama go back to being a Constitutional instructor, maybe he will learn something this time through!
Conservative Tom
President Obama, faced with no recovery from the recession as he enters an election year, has come up with a handy political gimmick: Fake the statistics.
The economic data that portend recovery are totally and completely inventions of Obama's political operation. The reality is that no recovery is taking place!
Economist James Fitzgibbon, of the Highlander Fund, explains how cooked the economic statistics on which the president bases his claims of recovery really are.
Begin with "gains" in the stock market. Fitzgibbon explains that they are no indication of changes in the public mood because the public isn't doing the investing anymore. He notes that HFT (high frequency trade computers) now "account for 80 percent [of the market's] daily business. No one else is left because they lost their money in 2008 and the public has fled the market ... Total NYSE volume is 67 percent lower on average than in 2008. Volume is 29 percent lower this year compared to 2011. The prices [have] no serious meaning."
Have consumers, as alleged, started borrowing again? Not really. Fitzgibbon explains that "credit use has surged only because the Obama administration changed the student loan program to a direct program and those loans are now counted as part of this metric. It is not comparable to anything prior to 2011." And, he adds ominously, "massive credit card use as measured against actual verifiable sales shows the increase is in borrowed funds to pay for food! Not my idea of a healthy sign."
How about lower unemployment figures? Fitzgibbon says they are a "joke." He says that the Bureau of Labor Statistics has "completely changed the ... metrics as of January 2012. None of the current percentages are relatable to anything prior to 2012!" He points out that the January unemployment data are heavily adjusted for "seasonal variations." He notes that "the actual data [show that the economy] lost 2.7 million jobs in January." And that's just the numerator. For the denominator -- the number of people in the workforce -- the data "also shows about 1.2 million people magically left the workforce." He says one has to go back to the early 1980s to see labor force participation as low as it is now.
Auto sales? He says "auto sales are when the manufacturer dumps cars and trucks on a dealer. Inventory stuffing! It has no relationship to actual sales to a consumer. Thanks to Obama, GM dealers are drowning in product no one wants to buy. It is a meaningless data point. Only dealer-to-consumer data is useful. It is not showing any growth at all."
Housing? He says positive news in this sector is unreliable. "The raw data we get shows it is worse than last year and in some regions [the] worst ever since the '60s."
So it appears that Obama's reelection strategy hinges on asking people to believe the data he puts before them rather than the evidence of their own eyes. It won't work.
Any economic recovery is only publicly noticed eight to 12 quarters after it has taken place. Ask George H.W. Bush, who lost the 1992 election despite very positive economic news at the end of his term. Or ask Clinton, who lost Congress despite two years of favorable job-creation numbers. It takes awhile for the good economic news to sink in. And, when there is no good news, just faked government propaganda, it takes even longer to sink in!
Dick Morris writes a fine article that validates our feelings. It is well worth reading.
It all leads to our understanding that the statistics are being adjusted to make things look better to help Obama get re-elected. So much for the most ethical administration in the history of the country!
It is time to let Mr. Obama go back to being a Constitutional instructor, maybe he will learn something this time through!
Conservative Tom
President Obama, faced with no recovery from the recession as he enters an election year, has come up with a handy political gimmick: Fake the statistics.
The economic data that portend recovery are totally and completely inventions of Obama's political operation. The reality is that no recovery is taking place!
Economist James Fitzgibbon, of the Highlander Fund, explains how cooked the economic statistics on which the president bases his claims of recovery really are.
Begin with "gains" in the stock market. Fitzgibbon explains that they are no indication of changes in the public mood because the public isn't doing the investing anymore. He notes that HFT (high frequency trade computers) now "account for 80 percent [of the market's] daily business. No one else is left because they lost their money in 2008 and the public has fled the market ... Total NYSE volume is 67 percent lower on average than in 2008. Volume is 29 percent lower this year compared to 2011. The prices [have] no serious meaning."
Have consumers, as alleged, started borrowing again? Not really. Fitzgibbon explains that "credit use has surged only because the Obama administration changed the student loan program to a direct program and those loans are now counted as part of this metric. It is not comparable to anything prior to 2011." And, he adds ominously, "massive credit card use as measured against actual verifiable sales shows the increase is in borrowed funds to pay for food! Not my idea of a healthy sign."
How about lower unemployment figures? Fitzgibbon says they are a "joke." He says that the Bureau of Labor Statistics has "completely changed the ... metrics as of January 2012. None of the current percentages are relatable to anything prior to 2012!" He points out that the January unemployment data are heavily adjusted for "seasonal variations." He notes that "the actual data [show that the economy] lost 2.7 million jobs in January." And that's just the numerator. For the denominator -- the number of people in the workforce -- the data "also shows about 1.2 million people magically left the workforce." He says one has to go back to the early 1980s to see labor force participation as low as it is now.
Auto sales? He says "auto sales are when the manufacturer dumps cars and trucks on a dealer. Inventory stuffing! It has no relationship to actual sales to a consumer. Thanks to Obama, GM dealers are drowning in product no one wants to buy. It is a meaningless data point. Only dealer-to-consumer data is useful. It is not showing any growth at all."
Housing? He says positive news in this sector is unreliable. "The raw data we get shows it is worse than last year and in some regions [the] worst ever since the '60s."
So it appears that Obama's reelection strategy hinges on asking people to believe the data he puts before them rather than the evidence of their own eyes. It won't work.
Any economic recovery is only publicly noticed eight to 12 quarters after it has taken place. Ask George H.W. Bush, who lost the 1992 election despite very positive economic news at the end of his term. Or ask Clinton, who lost Congress despite two years of favorable job-creation numbers. It takes awhile for the good economic news to sink in. And, when there is no good news, just faked government propaganda, it takes even longer to sink in!
The BLS does not fake data. My $20 bet with you is still on the table that the unemployment rate will not be -- as you said -- "near 5%" on election day. This would be the safest bet I have ever made in my life. Seriously.
ReplyDelete--David
That would be the easiest $20 I ever made. BLS does not fake data, it adjusts the data to make their bosses happy!
ReplyDeleteLet me rephrase that: BLS does not adjust the data to make their bosses happy.
ReplyDeleteIf you want to bet me $20 that BLS reports unemployment "near 5%" before election day, let me know.
--David
BLS DOES adjust the numbers, just like the CPI is adjusted. It does not include gas and food. Please tell me what two products does the average American family use every day other than those two? It is called manipulation.
ReplyDeleteFood prices are up as well as gas, 7-8%. It is called manipulation.
So, the proposed $20 bet is over your claim that BLS will report -- as you predicted -- unemployment "near 5%" by election day. Are we on, or not?
ReplyDeleteThis has nothing to do with how the CPI is calculated. Economists calculate "core inflation" (what you are talking about here) in order to get a better indicator of underlying long-term inflation, because food and gas prices are subject to big short-term swings. For other purposes, measures of overall inflation (which includes food and gas) are used and readily available. This article explains how, and why, economists use both measures of inflation...
http://www.frbsf.org/education/activities/drecon/2004/0410.html
Anyway, the BLS is not going to change their formula between today and November on how they calculate the unemployment rate. There have been no significant changes in the Current Population Survey in the last 12 years.
The unemployment rate always comes down in the years following a recession. It is taking longer because 2008 was the worst recession since the Great Depression. The housing market is usually a big factor in pulling us out of recessions, but this time, it was so screwed up by Wall Street banksters, it will take 10 years --not 10 more months -- to recover. You blame the government for this mess. I blame Wall Street (with assistance from the government). Wall Street is still pulling the strings in Washington, D.C., and it really doesn't matter whether we have Bush, Obama, or Romney. Vote Ron Paul!
--David
P.S. I am now firmly in the "not Mitt" camp. He has become the Wall Street candidate par excellence. Follow the Super PAC money.
David, they changed the way they calculate the data in JANUARY 2012!Who is to say they cannot and will not change it in the next ten months? Tell me that is not political. Additionally, the Wall Street Journal today reported that a new study showed unemployment at 9%+ and long term unemployment approaching 18%, a number no one in the Administration has the guts to touch!
ReplyDeleteCheck out Gallup poll:
ReplyDeletehttp://www.gallup.com/poll/125639/gallup-daily-workforce.aspx
Here is the BLS January report....
ReplyDeletehttp://www.bls.gov/news.release/pdf/empsit.pdf
There is nothing sinister in it. They make the same seasonal adjustments as always. The only unusual thing is that they incorporated the 2010 census data, and since the December, 2011 report was still using the 2000 census, you need to consider that when comparing changes from December to January.
They would have to do something REALLY bizarre with the data to get the reported unemployment down to your predicted "near 5%" by November. No way that is going to happen, and I'll put my $20 on that.
Are you taking the bet, or not?
--David
"U.S. unemployment, as measured by Gallup without seasonal adjustment, increased slightly to 8.6% in January from 8.5% in December, but was down from 9.9% in January a year ago."
ReplyDeletehttp://www.gallup.com/poll/152432/Unemployment-January.aspx
So, Gallup's unadjusted rate for January was 8.6%, and BLS adjusted rate was 8.3%.
Note also that the Gallup rate a year ago was at 9.9% and was at 10.9% in 2010. Gallup must be rigging their data to help Obama!
--David
David, send your money! We saw the difference between the BLS (Bullshit Labor Statistics) and the Gallup poll. I would believe Gallup, with its problems, over the BLS.
ReplyDeleteIn between December and January we saw a .5% decrease and a .3% decrease between january and February. That is just short of 1%. Should the trend continue, 5-6% is very possible. If you will go back to my original statement you will see there will be a couple months when it will jump up, just to make people like you think they are on the up and up. However, it is very conceivable (without contraceptives) that we could see 5-6% in 8 months.
Figures don't lie but liars figure.
BTW, the bet is on. By election day, we will be in the 5-6% range!
The 5-6% number is the BLS (Bullshit Labor Statistics) as measured by the Commerce Department and not real numbers as measured by some other credible sources.
ReplyDeleteThe BLS stats are the numbers that every economist in the world cites and uses in their research. You are the only guy I know who doesn't think their data is credible.
ReplyDeleteBe that as it may, I guess we need to decide what data source we will agree upon for purposes of the bet. I have no idea what source for the unemployment rate you consider credible. Gallup? Let me know.
I just checked the Congressional Budget Office's January report. They forecast end of 2012 unemployment at 8.9% and they do not expect it to get to 5%-6% until 2017! I am sure you will lose this bet no matter what source we agree to use, but since you think it will be rigged by Obama, then perhaps we should stay with BLS since that is in the executive branch of the government and -- on your theory -- under Obama's control. But we can use CBO, Gallup, or any public source you want. You will still lose the bet. My conscience is bothering me a little even though I have given you fair warning that it's a sucker bet. Still, I will give you through the weekend to reconsider.
ReplyDelete--David
I like being on the outside looking in as I am right more than not. Anyone who believes any data from the government is smoking funny cigarettes!
ReplyDeleteCBO has missed so many issues that I hardly doubt they are the "non-partisan" source most believe. If you looked at the health care bill in detail, there is no way that the CBO could score it and say there would not be a DRASTIC increase in cost and there are major parts of the plan which authorize spending, in say 2010, and then authorize "whatever is needed in 2011-2015". Who can score that, one would need a soothsayer and a psychic to come up with the numbers.
There have been other non-governmental scorings of the ACA that also project substantial savings. We are just going to disagree on this.
ReplyDeleteFor the record, I assume our bet is as follows: "The BLS will report unemployment at 5% to 6% before election day." Okay?
--David