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06.14 The Trump administration is waging a quiet war on education

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06.19 Engineers boost output of solar desalination system by 50% [Trump fires scientist. It would be far better to enable their good work.]

06.19 Can planting billions of trees save the planet?

06.19 Vermont adopts the most comprehensive plastics ban in U.S.

06.19 We’ll Never Solve Immigration If We Don’t Solve Climate Change [Why is our President so willfully stupid?]

06.19 Scientists shocked by Arctic permafrost thawing 70 years sooner than predicted

06.18 Photograph lays bare reality of melting Greenland sea ice ice sheet

06.18 Because 'This Is a Public Health Crisis,' Pennsylvania Gov. Urged to Investigate Link Between Fracking and Childhood Cancers

06.18 The Worst Patients in the World [Is THIS the dumbest thing we can do? Then let's do it!]

06.18 Navy Contaminates Local Groundwater and Sewer System in Maryland [Is THIS the dumbest thing we can do? Then let's do it!]

06.18 Trump's order to trim science advisory panels sparks outrage [Is THIS the dumbest thing we can do? Then let's do it!]

06.18 Call to arms: how can Australia avoid a slow and painful decline?

06.18 Soaring Temperatures Speed Up Spring Thaw on Greenland’s Ice Sheet

06.17 Hopes for climate progress falter with coal still king across Asia [Governments must subsidize very rapid installation of renewable energy to displace all fossil energy—aka DEATH ENERGY—power plants that must be made illegal ASAP]

06.17 Oil companies double down on plastics as public outcry grows [Obscene!]

06.17 Ocasio-Cortez: "We’re Going to Fight to Repeal the Hyde Amendment"

06.15 'The Changes Are Really Accelerating': Alaska at Record Warm While Greenland Sees Major Ice Melt

06.15 So much plastic is being made that "recycling has no impact" [Non-recyclable plastic must be made illegal to manufacture, use]

06.15 Climate crisis: aviation industry hears clamour for electric planes

06.15 We must transform our lives and values to save this burning planet [Increased ice melt in polar latitudes has been disguising reality in the middle latitudes. This effect will soon be replaced by record heat as ice volume and seasonal melting increasingly declines.]

06.15 This all-male council in Texas just voted to ban abortion [1:59 video; Bad assumptions foment ignorant actions...]

06.14 The Trans Mountain pipeline is a disaster – but Trudeau can make it right

06.14 The Pentagon emits more greenhouse gases than Portugal, study finds

06.14 Climate crisis: Alaska is melting and it’s likely to accelerate global heating

06.13 Chemical companies at centre of Guardian's Cancer Town series face state legal action [7:56 video]

06.12 'This is not a "what if" story': Tokyo braces for the earthquake of a century

06.12 Plant Species Have Been Disappearing 500 Times Faster Than Normal, Thanks to Humans

06.12 Atmospheric carbon levels are leaping. We can't afford more years like this

06.12 Politics as Usual and Planetary Destruction

06.12 Most 'meat' in 2040 will not come from dead animals, says report

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06.15 China's Expanding Media Dominance in Africa

Daily: FAIR Blog
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US Politics, Policy & 'Culture'

06.19 America has never gone this long without hiking the federal minimum wage [The poor would spend every penny and help the economy and decrease health costs. Only dummies don't understand the costly effects of penury.]

06.19 When migrants arrived in droves, this poor New Mexico city opened its arms [A good example for us all: This is the way we must respond to human suffering]

06.18 It's A Horrible Idea To Privatize The Tennessee Valley Authority And Other Public Energy Assets [Is THIS the dumbest thing we can do? Then let's do it!]

06.18 The secret to Elizabeth Warren's surge? Ideas

06.18 Tobacco's 'Special Friend': What Internal Documents Say About Mitch McConnell [His immorality is in complete control]

06.17 Climate change leadership would create a new 'American century' [We must incentivize the strategic good, again, before it's too late.]

06.17 Jon Stewart takes aim at McConnell in continued fight for 9/11 victim compensation fund [2:56 C-SPAN video]

06.17 Drug Cop Worth $400 Million After Bets on Brooklyn Real Estate [A better role-model than Trump or Kushner!]

06.15 Hard Times in the Imperial Valley

06.15 Ro Khanna Forces Beltway Bandit to Refund Millions From Price Gouging

06.15 White House physicist sought aid of rightwing thinktank to challenge climate science [When your President is a quack he naturally surrounds himself with sycophants]

Justice Matters

06.19 'Credible evidence' Saudi crown prince liable for Khashoggi killing – UN report

High Crimes

06.18 As promised, Trump slashes aid to Central America over migrants [Is THIS the cruelest thing we can do? Then let's do it!]

06.18 ‘The Saudis couldn’t do it without us’: the UK’s true role in Yemen’s deadly war [If you act psychopathic you are psychopathic; 3:40 Video: Where have all the flowers (and morals and young men) gone, long time passing, sung by Marlene Dietreich]

06.17 'Blatant Theft': Netanyahu Unveils Illegal Settlement Named 'Trump Heights' in Occupied Syrian Territory [Great deal: the U.S. gives Israel $Billions every year, and they name an illegal settlement—to be built on Palestinian land—after Trump]

Economics & Corrupt Capitalism

06.15 'Eye-Popping': Analysis Shows Top 1% Gained $21 Trillion in Wealth Since 1989 While Bottom Half Lost $900 Billion [More equality or bring back the guillotines!]

International & Futurism

06.19 Trump Enabled an ‘Act of Organized Crime’ in Guatemala [Trump and other mafia-dons cause refugees and migrants as much as global warming]

06.19 Ireland to ban new petrol and diesel vehicles from 2030

06.19 Madrid’s new rightwing council suspends low-emissions zone [“Stupid is as stupid does.” –Forrest Gump]

06.19 UK firms told they face 'deliberate disruption' to hit zero carbon goal

06.19 Donald Trump’s reckless Iran policy casts doubt on the US as global leader [America's reputation has plummeted more speedily since Trump's dubious election, with professionals willfully replaced with less competent appointees or left unfilled in many federal government agencies]

06.19 Women outperform men after Japan medical school stops rigging exam scores

06.19 UK climate plan unclear, says European commission

06.18 'If This Is True, They Are Even Bigger Lunatics Than We Realized': UN Officials Reportedly Believe Trump Planning 'Massive' Bombing Campaign in Iran [Never underestimate the stupidity of the Trump Administration]

06.18 The United States Should Welcome a Strong, United Latin America

06.18 Solidarity With Glenn Greenwald

06.18 Theresa May could yet give us the ultimate parting gift: a Brexit referendum

06.18 The Trump administration's dangerous fever dream about Iran

06.18 Iran will not wage war against any nation, says Hassan Rouhani [Economic sanctions are cruel punishment to innocent civilians causing hate for generations. We will reap what Trump sows.]

06.17 Saudi Arabia May Execute Teenager for His Protests — Including When He Was 10 [America's “best ally” is psychopathically insane]

06.17 Why Venezuela Is the Vietnam of Our Time [Powerful, clear writing!]

06.17 US Attacks Russia’s Power Grid; Trump Kept in Dark

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  How Fake is the ''Recovery''?
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ECONOMIC COMMENTARY:

How Fake is the "Recovery"?

Statistical Deceptions

by Paul Craig Roberts
Originally published on 29 July 2009

One looks in vain to the US financial media for accurate economic information. Currently, Wall Street, the White House, and the media are all over-hyping any possible sign of economic recovery.

Last week on NPR a professor in the Sloan School of Management at MIT explained that what is really at stake in the health care bill is the US government’s ability to borrow. In other words, the bill is about cutting health care costs, not about providing hard-pressed Americans with health care.

The professor said that if we didn’t get health care costs under control, in 30 years the US government would not be able to sell Treasury bonds.

It is not at all clear that the Treasury will be able to sell its debt instruments in 30 months, and it has nothing to do with health care costs.  The Treasury debt marketing problem has to do with two back-to-back US fiscal year budgets, each with a $2 trillion deficit.  The size of the US deficit exceeds in these troubled times the supply of world savings available to fund the US government’s wars, bailouts and stimulus plans. If the Federal Reserve has to monetize the Treasury’s new borrowings by creating demand deposits for the Treasury (printing money), America’s foreign creditors might flee the dollar.

The professor didn’t seem to know anything about this and gave Washington 30 more years before the proverbial hits the fan.

One looks in vain to the US financial media for accurate economic information.  Currently, Wall Street, the White House, and the media are hyping a new sign of economic recovery--”surging” June home sales.  John Williams at shadowstats.com predicted this latest reporting deception.

Here is the way Williams explains how statistics can produce false signs of recovery. The economy has been contracting for so long that a plateauing of the falloff in home sales compared to the previous time period’s more rapid contraction can appear like a gain.

The Census Bureau itself notes that the  reported 11 per cent increase in June home sales might be illusory.  The reporting agency says that the gain is not statistically meaningful at a 90 per cent confidence interval and that “the Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.”

Williams explains other data distortions likely to create false hopes and lead to investment losses.  Financial stresses from the current state of the economy have changed behavior.  This means that normal seasonal adjustments to statistical data can result in misleading information.

For example, the recent decline that was reported in seasonally-adjusted new unemployment claims was a result of the normal adjustments for the retooling of auto lines that did not, in fact, take place to the normal extent, due to the bankruptcies and uncertainties.  Adding in seasonal adjustments that did not in fact take place artificially reduced the unemployment claims.

Williams warns that after a period of contraction, new monthly or quarterly figures are being compared to prior periods of collapsing activity.  “Improvements” are thus artifacts of the prior collapse and not signs of economic rebound.

The “Birth-Death Model” is used by the Bureau of Labor Statistics to estimate the net of the non-reported jobs lost by failed businesses (deaths) and new jobs created by start-up companies (births). Williams explains why the model understates job loss during periods of contraction.  The modeling on which the birth-death adjustment is based consists primarily of periods of economic growth when there are more non-reported start-up jobs than non-reported job losses from business failures.  The BLS model came up with a monthly adjustment of 75,000 new jobs added to the reported number.  That means an adjustment factor of 900,000 new jobs added to the reported payroll jobs number each year.

However, during economic contraction, such as the current one, it is wrong to assume that new start-ups are creating 75,000 jobs each month more than are being lost to business failures.  Thus the job losses are understated by the 900,000 upside birth-death adjustment and by the absence of a downside adjustment to estimate the jobs lost as a result of failed companies that cease to report.

The reported unemployment rate is itself deceptive as it does not  include discouraged workers who have been unemployed for more than a year.  These long-term discouraged workers are simply erased from the rolls of the unemployed.

The Consumer Price Index no longer measures a constant standard of living and is not comparable to pre-Clinton periods.  During the 1990s, the CPI ceased to be based on a weighted fixed assortment.  The principle of substitution was introduced.  For example, under the old measure, if the price of steak rose, the CPI rose.  Under the new measure, if the price of steak rises, the index switches to hamburger on the assumption that consumers substitute hamburger for steak.

Consumer confidence typically is swayed by “good news” hype. The drops in the Conference Board’s and the University of Michigan’s measures of consumer confidence in July suggest that Americans are becoming inured to recovery hype and are realizing that the government and the media lie about the economy just as they lie about everything else.


Paul Craig RobertsPaul Craig Roberts is an economist who served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as the "Father of Reaganomics". He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. He is the author of Supply-Side Revolution: An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy: The Collapse of the Socialist Era and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions: How Prosecutors and Law Enforcement Are Trampling the Constitution in the Name of Justice.

This article is published in the Baltimore Chronicle with permission of the author.



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This story was published on July 31, 2009.

 

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