Hard numbers: The economy is worse than you know

I've been meaning to post this for a long time. Someone steered me to it last summer. (Was it classmate Tim Koranda, our co-poster here?) It's about a problem that has nothing to do with party politics because it spans 25 years of both parties' rule. I work with statistics all the time in my day job, and I know first-hand, if you adjust your strategies in response to bad data, you'll run your car right off the road. And that's what I see has happened and continues to happen here.

The problem is that for decades various administrations have repeatedly changed the definitions of vital economic statistics, so one percent of inflation today is nothing like one percent of inflation a generation ago. Same for unemployment statistics and many others. It's almost as if we had changed the definition of "miles per gallon" and then tried to compare current cars with the ones from 1980.

The writer who was brought to my attention is Kevin Phillips, in last April's Harper's magazine. The article was reprinted online in the Tampa Bay paper. (The original has been taken down from the paper's site; the link goes to Google's cache of it.)

Yes, Hell has frozen over. Yes, I'm quoting a Nixon speechwriter on a topic where the Clinton administration seems to have been the most egregious offender. The chart above is one example: the definition of inflation has been repeatedly changed. Remember the Clinton campaign's internal slogan "It's the economy, stupid"? This graph shows that they apparently really believed it, adjusting the definition of inflation so the apparent number stayed around 3%, though by 1983's definitions prices kept rising at a faster and faster rate. (Others did it before and after, too.)

One form of manipulation is product substitution: in the weekly consumer grocery basket, when flank steak became too expensive, they simply stopped counting it and substituted hamburger instead - the same as if we stopped counting Toyotas and substituted Yugos and then talked about prices as if they were the same.

Another is hedonic adjustment, which means they've fudged the real prices increases downward, because we supposedly enjoy today's products more than we enjoyed previous products. (But note, they didn't make the definition change retroactive: one writer noted that this fudging would have blown the roof off prices in the 1950s, when air conditioning and widespread car ownership changed life dramatically for many people.)

Another example, which I discovered 5 years ago, is the definition of unemployment, also covered in Phillips' article. Many of you know that when you give up and stop looking, they stop counting you even though you still don't have a job and would take one if you could get it; and even if you're still looking after 6 months, they stop counting you anyway. JFK's administration brought us that one.

And the "job creation" statistics only count the number of W-2's, without considering full-time or part-time. So if someone loses a full-time job with benefits and has to take three part-time jobs to get by (without benefits), the statistics you hear on the TV would report it as "The economy created two new jobs last month."

My Congressman's office called the Bureau of Labor Statistics and confirmed that for me.

One problem with this is that policymakers don't take the fudging into account when they decide whether action is needed. They have rules like "if inflation is above 5%, do X." Look at the chart above and you'll see how cloudy their windshield has been.

Remember, I'm not saying this to attack any particular party - it's been happening through many different administrations. I'm saying that until we remove the fudging - or modify the policy guidelines - we have no hope at all of making effective decisions. And the economy's not going to get better.

Patsy Cline spoof (who's this comedienne??)

Yes, from Uncle Sandy again.


This is in several places on YouTube but I can't find the comedienne's name! First person to find it for me (and put it in a comment below) gets a year's free subscription to this blog.

Obituary: on the death of Common Sense

Good ol' Uncle Sandy again. I imagine this one's been around the barn a few times, but hey, it's OUR blog, and we get to post whatever we want. (That's what Web 2.0 is all about.)

I've cleaned up punctuation and deleted some stuff I didn't like, because hey, it's my blog. :) You can start a blog too - see the Create Blog link at top right. I'd never had a blog, until I started one. (Duh?)

====

An Obituary, purportedly from the London Times

Today we mourn the passing of a beloved old friend, Common Sense, who had
been with us for many years.

No one knows for sure how old he was - he'd been around as long as anyone could remember. He will be recalled as having cultivated such valuable lessons as:

• When to come in out of the rain
• The early bird gets the worm
• Life isn't always fair
• Maybe it was my fault.
  

Common Sense lived by simple, sound financial policies (don't spend more than you can earn) and reliable strategies (adults, not children, are in charge).

His health began to deteriorate rapidly when well-intentioned but overdone regulations were set in place. Reports of a 6-year-old charged with sexual harassment for kissing a classmate, teens suspended from school for using mouthwash after lunch, and a teacher fired for reprimanding a student worsened his condition.

Common Sense lost ground when parents attacked teachers for doing the job they themselves had failed to do in disciplining their unruly children.

He declined further when schools were required to get parental consent to administer sun lotion or an aspirin to a student, but could not inform parents when a student became pregnant.

Common Sense lost the will to live as churches became businesses and criminals sometimes received better treatment than their victims.

The onset of his final illness occurred when a woman placed a steaming cup of coffee between her legs, spilled it, and won a lawsuit about the consequences.

Common Sense was preceded in death by his parents, Truth and Trust, by his wife, Discretion, by his daughter, Responsibility, and by his son, Reason.

He is survived by four selfish stepbrothers: I Know My Rights, I Want It Now, It's His Fault, and I'm A Victim.

Not many attended his funeral because hardly anyone noticed he was missing.

If you remember him, pass this on. If not, join the crowd.

"Nothing ventured"

Here is an op-ed piece by Tim Koranda that just ran in the Orange County Register about paying people to do nothing.

http://www.ocregister.com/articles/nothing-money-government-2314257-new-one

New item on Denny's Menu

In honor of the mother of octuplets, Nadya Suleman, Denny's is offering the "Nadya" breakfast special:

It's 14 eggs, no sausage, and the guy in the next booth pays for it!


All, Tim Koranda is a college classmate of mine, whom I met only last year as a result of my being class secretary, so I write everyone several times a year. It's a cheesy way to get more email in my life, but it works.

Why some senior drivers should be re-tested

This blog is about impatience. I get impatient with idiots of all stripes. So does evil Uncle Sandy in Stone Mountain.

But I love this. I so get the frustration and, well, impatience of just wanting to get OUT of there.

Swami Beyondananda's Guidelines for Millennial Enlightenment

I'd heard of this guy over the years, but this just showed up today on my ACOR cancer mailing list, and I laughed out loud about a dozen times. So here, happy Valentine's Day! From Swami Beyondananda:

1. Be a Fundamentalist--make sure the Fun always comes before the Mental. Realize that life is a situation comedy that will never be canceled. A laugh track has been provided, and the reason why we are put in the material world is to get more material for it.

2. Remember that each of us has been given a special gift, just for entering -- so you are already a winner!

3. The most powerful tool on the planet today is Tell-A-Vision. That is where I tell a vision to you, and you tell a vision to me. That way, if we don't like the programming we're getting, we can simply change the channel.

4. Life is like photography. You use the negative to develop.

5. It is true. As we go through life thinking heavy thoughts, thought particles tend to get caught between the ears, causing a condition called truth decay. So be sure to use mental floss twice a day. And when you're tempted to practice tantrum yoga,
remember what we teach in Swami's Absurdiveness Training class: *Don't get even, get odd.*

6. If we want world peace, we must let go of our attachments and truly live like nomads. That's where I no mad at you, you no mad at me. That way, there'll surely be nomadness on the planet. And peace begins with each of us. A little peace here, a little peace there, pretty soon all the peaces will fit together to make one big
peace everywhere.

7. I know great earth changes have been predicted for the future, so if you're looking to avoid earthquakes, my advice is simple. When you find a fault, just don't dwell on it.

8. There's no need to change the world. All we have to do is toilet train the world, and we'll never have to change it again.

9. If you're looking to find the key to the Universe, I have some bad news and some good news. The bad news is: there is no key to the Universe. The good news is: it has been left unlocked.

Joe Cocker at Woodstock, with subtitles

I always did wonder what he was actually saying. Fasten your seatbelts.

=====RATS, that didn't last long! It now produces a copyright error. Sorry. Well, it was great. ==========

Hippo eats dwarf

I've been using Twitter lately. Many people use it for insipid exchanges of "I'm going to lunch now" updates, but I (and my Twitter friends) use it to eavesdrop on things that interesting people have spotted and post on Twitter.

This one's an oddity. The guy publishes a really good technical blog, but tonight he "tweeted" something a wee bit bizarre.

Hippo eats dwarf. No further commentary needed - http://i92.photobucket.com/albums/l23/dannymills/HIPPOEATSDWARF.jpg
Sun, Jan 11 15:39:02 from web

Okay so it's a month late. Listen to it.

(Ignore the stupid preview image that they put on the YouTube. It's not about Hell.) (Well, maybe it is.)