Wednesday, August 08, 2012

Lying When The Truth Would Work Better

My grandmother grew up in the backwoods of Arkansas. She got 4th grade education, worked in the fields, and when she was 12 years old threw down her cotton sack and took a train to Texas to live with an aunt she had never met. She lived a hard life, never had much of a chance, and yet she was one of the wisest people I have ever known.

She taught me many life lessons that have served me well, one of which went like this: "Jimmy," she would say as she waved her finger in my face, "most folks will lie even when the truth works better."

Not a particularly rosy view of humanity, but it was, and is, deadly accurate.

Nowhere is her admonition better seen than when man is collectivized and given authority. Whether government, corporate or union, the simple fact is that most people are liars, liars lie, good liars rise to the top, and when good liars are collectivized they lie more frequently and more effectively. When they have control of the numbers, it makes their deceit more difficult to discover. When they can make up the numbers, it can unwinding them a near impossibility.

Take the recent unemployment numbers that took the U.S. stock market to fresh 3-month highs. According to the U.S. Department of Labor, 163,000 new jobs were created in July, 2012.

Sounds good enough, but like most numbers, even if it is accurate, which it is not, it creates an intended deceit.

Looking at the Bureau of Labor Statistics own tables reveals the following startling fact: The U.S. actually lost 1,204,000 jobs in the month of July, 2012.

Don't believe it? Take a look at the actual unadjusted data from the Bureau of Labor Statistics.

During July, 2012, the private sector added a net 27,000 jobs which represented an added 76,000 goods producing jobs less 49,000 jobs lost in the service sector. The other million plus were lost in the public sector.

The 163,000 represents a number that has nothing to do with reality, but rather represents a model that supposedly takes into account the seasonality of certain jobs.

In short, the BLS report showing 163,000 added jobs is statistical wizardry by bureaucrats with calculators following the demands of liars who want the numbers spun.

If you give it some thought, it makes no sense that employment is expanding.

GDP is falling, in part because fewer people are working, which might also explain why tax receipts per employee are also falling.

A contracting, not expanding, workforce might also explain these numbers from the ISM’s July Manufacturing Purchasing Manager's Index (PMI) report:

The PMI registered 49.8 percent, which was a contraction in the manufacturing sector for the second consecutive month, following 34 consecutive months of expansion.

The New Orders Index registered 48 percent, indicating contraction in new orders for the second consecutive month.

A rising number of unemployed might also be consistent with:

ISM’s New Orders Index of 48 percent in July, representing a contraction in new orders for the second time since April, 2009.

The Inventories Index registered 49 percent in July, 5 percentage points higher than the 44 percent reported in June. 

ISM’s Employment Index registered 52 percent in July, 4.6 percentage points lower than the 56.6 percent reported in June. 

ISM’s New Export Orders Index registered 46.5 percent in July, 1 percentage point lower than the 47.5 percent reported in June, and represents the second month of contraction in the index since June, 2009.

ISM’s Imports Index registered 50.5 percent in July, 3 percentage points lower than the 53.5 percent reported in June.

The employment numbers are even belied by our garbage, not just government's garbage, but real garbage. A recent ZeroHedge blog ( interpreted recent Bloomberg numbers on the number of carloads of trash being hauled by U.S. railroads. "As Bloomberg explains: 'One closely watched economic indicator is the rail car loads of waste and scrap materials.' Logically: 'The more we demand, the more waste is generated by that production.' As the chart of the day, courtesy of Bloomberg Brief, demonstrates, if garbage is the benchmark, the US economy is now contracting faster than it has at any one point in the past 3 years and is on pace to recreate the economic collapse last seen after the Lehman bankruptcy. Perhaps another reason why central planners have latched on to stock markets and will just not let go."

The chart is here:

In the big picture, the numbers still don't add up. The “civilian labor force participation rate” is now at 63.7% of the total workforce. The total employment to population rate is 58.4%. See "The Employment Charade Or Ignore The Headlines," by Jeff Harding at The Daily Capitalist here: If participation keeps falling precipitously, does it make sense that net jobs are being added and filled?

From employment to GDP, government skews the numbers to the favor of, well, government. Obama does it, Bush did it, and the next up in America's so-called 'leaders,' will do it, too, and for the same reasons: to keep the Sheeple calm, or at least, non-violent.

And, while it appears government is lying to its advantage, in fact it is lying when the truth would work better. Why? The lies upon lies will soon become incredible. The Sheeple will look around and see that more, not less, of the people they know, their neighbors, and their friends, are unemployed, and one day the published numbers will mean nothing anymore and when numbers created from whole cloth are no longer believed, the civil disobedience will begin. No doubt the truth would be taken hard today, but the truth would provide a foundation for solutions that make sense. Relentless denial is rarely, if ever, the answer to any problem.

A good starting point for anyone interested in parsing government numbers is to assume that any number publicized by government is fiction. The first question to be asked is, "to whose advantage?" The second question, "Where is the raw data?" Then, combining common sense with a little research you may still not get to the real number, but you will get closer than the lies being fed to the willing by the liars who lie even when the truth would work better.



Anonymous Steve Hanson said...

I read your article in Lew Rockwell's newsletter .. and now, sir, I am a fan of yours. I also just read about your mother and wish I could have met her.
I, too, am not a fan of liars. That pretty much means I hate most politicians and all such human predators. I'm currently working on a proof involving morality (outside of a god-based religion) that shows how Man's survival is tied to four fundamental acts of virtue: choice, seeking truth, gathering wealth and learning skillsets. I contend that human predators violate a victims ability to perform those four virtues. Liars violate the second virtue, seeking the truth. This is not an esoteric subject, it's directly related to our success at survival.
At any rate, thank you for being a truthful human being.
/Steve Hanson in danbury, wi

5:58 AM  

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