Is this article total BS?

[liv2ski]

Looking at the below article, I am super confused by it's claims. While I get and agree with the inflation numbers, as I can feel that in my normal everyday purchases, wtf about the employment numbers. Is everything being cooked and altered to put a pretty face on employment? I remember candidate Dump taking about 21% unemployment and now as POTUS he is owning the much lower number. So are we just being fed a line of baloney?

As you are about to see, if honest numbers were being used all of our major economic numbers would be absolutely terrible. Economist John Williams of shadowstats.com has been tracking what our key economic numbers would look like if honest numbers were being used for many years, and he has gained a sterling reputation for being accurate. And according to him, it looks like the U.S. economy has been in a recession and/or depression for a very long time.

Let’s start by talking about unemployment.

We are being told that the unemployment rate in the United States is currently “3.8 percent”, which would be the lowest that it has been “in nearly 50 years”.

To support this claim, the mainstream media endlessly runs articles declaring how wonderful everything is. For example, the following is from a recent New York Times article entitled “We Ran Out of Words to Describe How Good the Jobs Numbers Are”…

The real question in analyzing the May jobs numbers released Friday is whether there are enough synonyms for “good” in an online thesaurus to describe them adequately.

So, for example, “splendid” and “excellent” fit the bill. Those are the kinds of terms that are appropriate when the United States economy adds 223,000 jobs in a month, despite being nine years into an expansion, and when the unemployment rate falls to 3.8 percent, a new 18-year low.

Doesn’t that sound great?

It would be great, if the numbers that they were using were honest.

The truth, of course, is that the percentage of the population that is employed has barely budged since the depths of the last recession. According to John Williams, if honest numbers were being used the unemployment rate would actually be 21.5 percent today.

So what is the reason for the gaping disparity?

As I have explained repeatedly, the government has simply been moving people from the “officially unemployed” category to the “not in the labor force” category for many, many years.

If we use the government’s own numbers, there are nearly 102 million working age Americans that do not have a job right now. That is higher than it was at any point during the last recession.

We are being conned. I have a friend down in south Idaho that is a highly trained software engineer that has been out of work for two years.

If the unemployment rate is really “3.8 percent”, why can’t he find a decent job?

Next, let’s talk about inflation.

According to Williams, the way inflation has been calculated in this country has been repeatedly changed over the decades…

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement , also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made “improvements” in the way they calculated the data.

If inflation was still calculated the way that it was in 1990, the inflation rate would be 6 percent today instead of about 3 percent.

And if inflation was still calculated the way that it was in 1980, the inflation rate would be about 10 percent today.

Doesn’t that “feel” more accurate to you? We have all seen how prices for housing, food and health care have soared in recent years. After examining what has happened in your own life, do you believe that the official inflation rates of “2 percent” and “3 percent” that we have been given in recent years are anywhere near accurate?

Because inflation is massively understated, that has a tremendous effect on our GDP numbers as well.

If accurate inflation numbers were being used, we would still be in a recession right now.

In fact, John Williams insists that we would still be in a recession that started back in 2004.

And without a doubt, a whole host of other more independent indicators point in that direction too. The following comes from an excellent piece by Peter Diekmeyer…

Williams’ findings, while controversial, corroborate a variety of other data points. Median wage gains have been stagnant for decades. The U.S. labour force participation rate remains at multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is in a depression.

Another clue is to evaluate the U.S. economy just as economists would a third world nation whose data they don’t trust. They do this by resorting to figures that are hard to fudge.

There, too, by a variety of measures—ranging from petroleum consumption to consumer goods production to the Cass Freight Index—the U.S. economy appears to have not grown much, if at all, since the turn of the millennium.

In the end, all that any of us really need to do is to just open our eyes and look at what is happening all around us. We are on pace for the worst year for retail store closings in American history, and this “retail apocalypse” is hitting rural areas harder than anywhere else…

This city’s Target store is gone.

So is Kmart, MC Sports, JCPenney, Vanity and soon Herberger’s, a department store.

“The mall is pretty sad,” says Amanda Cain, a teacher and mother. “Once Herberger’s closes, we’ll have no anchors.”

About two-thirds of Ottumwa’s Quincy Place Mall will be empty with Herberger’s loss.

[Buster Highmen]

The definition of unemployed is not what it appears at face and does not include those of us no longer even looking for paying work.

Inflation as well is being fudged where the definition was changed relatively recently. I linked some definitions here : https://www.tetongravity.com/forums/...11#post5363611 .

The article is consistent with the drum I've been banging for years. Wall Street growth is not shared by most of the US population and massively skews what's really happening economically.

[DBdude]

he is correct that people are removed from the labor force for non participation. this would cover people that lost good jobs and who don't want to be under employed and have retired or become care givers. the u-6 rate was 7.6 last month. The labor participation rate for may was 62.7 and the average rate between 1950 and 2018 is 63 with a high in 2000 of 67.3

i think what has changed that some older workers have been down sized into shitty jobs if they decide to work. second the temp job / contracting job/ non tradional jobs are affecting retirements and healthcare benefits

[The AD]

Politicians want the numbers to look good, so any change in the calculations that make unemployment numbers look smaller are copacetic to them. No big surprise there!

[DBdude]

oh and the discussion of retail. retail is changing - obviously. we have twice the retail space per person than europe does

[liv2ski]

Oooops, sorry for posting this in the padded room. Mods feel free to move it.

[GeezerSteve]

It's part valid, part bullshit, therefore not total bullshit

As Buster notes, fed govt uses its own definitions of "inflation" and "unemployment," which, to be fair, are useful for some purposes, but materially differ from definitions a lay person would typically use.

The article's claim that the unemployment rate is "actually" 21.5% is bullshit. Any definition leading to that result is meaningless and would include people outside the set of available workers, e.g., voluntarily retired people, disabled people, people taking career breaks, trust fun babies who choose not to work, etc.

The claim of an "actual" inflation rate of 10% is equally dubious. He is correct that CPI, PPI and PCE inflation measurements omit some key elements. But there is no perfect measure: Any model of inflation is necessarily flawed because some weighting and assumptions are required. (Think: Not every consumer buys the same proportion of various goods.) Some sectors have been undergoing a deflationary trend, thanks to globalism, cheap labor, unforeseen oil plays, etc. OTOH, the inflation measurements used to determine SS COL increases were indeed tweaked to depress acceleration of SS payouts.

IMO, although the article raises on valid points, it also makes several dubious claims and is more rant than it needs to be. These issues deserve discussion, but IMO they are better discussed in a more objective manner.

[Sirshredalot]

To answer your question: yes, that's bullshit. That guy's a kook.

[old goat]

What's the source of the article? Impossible to judge its validity without knowing where it comes from and the credentials of the writer.
Certainly the unemployment number alone gives a poor picture of the overall employment picture, particularly since it says nothing about how well jobs pay and whether they are benefited. Too many manufacturing workers who lost well paying jobs over the last couple of decades are now working for a lot less without benefits.
While Americans tend to vote with their pocketbooks I don't think too many vote based on what the newspapers or the govt say about the economy. They assess the state of the economy based on their own situation and that doesn't lie.

[Benny Profane]

I believe that the educated with money and assets and good income (the top ten percent) are now unmoored from the rest of society, and that includes most of D.C., who live in one of the most expensive RE markets in the country. They make the rules, and control the story we get in the media and "official reports". They are in a bubble, but, they don't care, because its an awesome place to be.

Inflation would be high if you included housing and education, but, it doesn't, so it isn't. Otherwise, inflation is pretty low. Amazing I can buy a car these days that is far superior to one of the same price fifteen years ago.

Malls are dying because of Amazon, period.

[DBdude]

and over supply of footage, but yes amazon changed everything

where I live housing pricing haven't gone up in many parts and segments

[Sirshredalot]

I believe that the educated with money and assets and good income (the top ten percent) are now unmoored from the rest of society, and that includes most of D.C., who live in one of the most expensive RE markets in the country. They make the rules, and control the story we get in the media and "official reports". They are in a bubble, but, they don't care, because its an awesome place to be.

Inflation would be high if you included housing and education, but, it doesn't, so it isn't. Otherwise, inflation is pretty low. Amazing I can buy a car these days that is far superior to one of the same price fifteen years ago.

Malls are dying because of Amazon, period.

2 comments:

1. Housing is up, but you underestimate how far it is up nationally because you aren't participating in the market in the cheap, dumpy parts of the country (of which there are plenty).
2. (more in reply to the comment above) In recent years, voters don't seem to be voting their pocketbooks in any discernible way, and survey data show consumers are ABYSMAL at thinking in real (rather than nominal) terms and at estimating levels of inflation.
3. Labor force participation - separate from unemployment - isn't some arcane secret. It's published right along with everything else on the web sites of the various statistical agencies. We expect it to be in decline right now because the baby boomers are hitting 70 years old.
4. Buy me a beer some time and I can tell you very boring stories about producing all these reports and why I left for greener pastures.

[Meathelmet]

Calculations vary from country to country (as well as by government) and by institutions like IMF.
The labour participation rate around this part of scandihoovia is 70% and still our calculated unemployment rate is 8.5%.
Utilising that as a baseline US unemployment rate with lab.part.rate of 62.7 would be = X%.

But that X being factual unemployment of 3.8% would need some serious "talent" in math and statistics, or very peculiar labour force demographic..

[Benny Profane]

2 comments:

1. Housing is up, but you underestimate how far it is up nationally because you aren't participating in the market in the cheap, dumpy parts of the country (of which there are plenty).

Well, yeah, but, nobody wants to live in those places.

[DBdude]

thanx - laughing

[detrusor]

I do believe the part about inflation being artificially low. My cost of living continues to rise in all aspects (except for natural gas) at a rate well above 3%.


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[DBdude]

Google points to The Economic Collapse blog authored by Michael Snyder.

https://www.amazon.com/Michael-Snyde...f44a8bc7dc32df

[Tippster]

Malls are dying because of Amazon, period.

Well... and Walmart, Sam's Club, Costco, Lowe's, Home Depot, etc. Also Outlet Malls seem to be doing just fine.

[Buster Highmen]

OK, for those thinking or believing that the article is BS, consider which has less BS: that article or the "official numbers".

Yeah, so it's all bullshit and not relevant to any particular experience, but really, how much cred do the "official numbers" have?

[Sirshredalot]

I do believe the part about inflation being artificially low. My cost of living continues to rise in all aspects (except for natural gas) at a rate well above 3%.


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Food (purchased from grocery store and cooked at home) and consumer durables are both cheap and not getting more expensive on a quality-adjusted basis. Home electronics and IT equipment are getting meaningfully cheaper.

[liv2ski]

I do most of the shopping and things at the grocery store are not cheaper. Everything has gone up in price and or reduced in size to keep the price close to the former larger package. Electronics always go down in price for the same item, but new items always go up in price. Not sure about Benny's car example, as the same cars have clearly gone up quit a bit in price over the years when comparing same models. Health care costs, education, housing, utilities, etc. It is all way up over the last 5 years, so the inflation numbers are BS.
On employment, Buster and Meat helmet make good points, so no way am I buying the published numbers.

[Benny Profane]

thought this was gonna be about the used car market

Awesome right now. You'd be a fool to buy new. Tons of cheap low mileage cars coming off lease.

[GeezerSteve]

Cars are cheaper largely because of electronics, South Korea's larger piece of the market and U.S. manufacturers' successful union busting efforts (abetted by union hate among Fox News-watching duped working class people and so-called "right to work" state laws).

Yeah, food and health care sectors continue on an inflationary trend. Future of food pricing is scary for lots of reasons, e.g., water insecurity, continuing trend of consolidation by Big Ag and huge food processors (collectively, "Big Food"). Trump's flirtation with trade wars and disassembling NAFTA will surely have effects on pricing, perhaps some screaming deals for the consumer short-term but with lots of long term risk. NAFTA has helped keep many smaller farm economically viable. If NAFTA gets killed, it would certainly lead to more small farms selling out to Big Ag, and more consolidation will result in steepening inflation of food prices for the consumer.

I know about Big Food because I've been involved in the industry for 25 years. I need to rely on credible sources re most other industry trends. Laugh if you will, but IME The Economist is a good place to get reliable information re global trends that is less biased than other sources.

It's all very complicated and thus defies discussion via populist rants or bumperstickers, so the Koch Brothers Club will continue to win the war because they've got the GOP-controlled Congress in their hip pockets -- and the poorly educated white working class will continue to vote against their self-interest. And so it goes.

[Benny Profane]

I don't know. When I walk into a supermarket in the mountains in January and see blueberries at 3.99 along with a huge selection of affordable, fresh produce, I wonder where this so called inflation is. Cue Louis CK with his Everything is Wonderful and Nobody is Happy.

[4matic]

It’s BS in the fact that economics always has a dark side. It’s the doomsday science.

I can tell you with 100% certainty that the Hispanic economy in California is booming. The folks willing to do blue collar labor are winning right now. A lot of cash business going on too.

30% of the California population is on medi-cal. That’s money getting spent on the economy.