Bill Fleckenstein has been bearish as long as I have known of his existence, which is going on a decade now. Even he is in awe of the mighty statistical wonkistry involved in unraveling Joe and Jane Average’s dilemma: “The government tells us the economy is fine and unemployment is low, but things sure feel rough from here.” A direct quote from Mr. Fleckenstein: “I have been aware of nearly all the statistical tricks used by the government since they were implemented. Nonetheless, seeing them collectively described in one article is incredibly sobering.”
He thinks this article is so important that he is giving us the short version days before the original — economist John Williams interviewed by Kate Welling — will be available without a subscription. Some of these items are not a shock to those of you who have been reading here a while, but Williams and Fleckenstein have the numbers and methods to tell you the underlying whys and wherefores. Go read how….
* Real unemployment is more like 12%, more than twice the official Department of Labor number.
* The government literally changed the rules of how inflation is measured to get a lower number.
* That still wasn’t good enough so they started changing the items whose prices were measured.
* If they hadn’t tinkered with these numbers, Social Security checks would be 70% higher than they are now. No wonder money seems tight to Granny.
* American’s incomes are lower than reported too, because of some accounting slight of hand that assumes homeowners pay rent to themselves!
So if you would like to think I see the economy as “a glass half empty,” I would like to remind you to pay attention to what’s really in the glass. These things are even more startling when you realize that Income is not keeping pace with the official inflation numbers, and remember both those numbers are tweaked to seem as rosy as possible.
In closing: cause of death, corporate culture; new bankruptcy rules suck, even judges say so; some tips on getting health insurance coverage; and the real Cola Wars.
the wonkistry of the economic illuminati stock mongers and their attendant granfalloons, indeed.
Retail stock buyers… undercapitalized trend followers… the argot of carnivors and parasite.
The debt figures are staggering no matter which way they are presented… my checkbook screams out the real condition of the economy and is a very good filter of statistic!
any comments on socially conscious investing?