Sunday, August 18, 2013

Putting Government's Numbers Into Proper Historical Perspective

This was written by Charles Hugh Smith, one of the best and brightest social and economic observers of our time. I commend his website to you . . . In the piece reproduced below, Charles puts the government's relentless and disingenuous revision of its economic numbers into what I believe is an accurate historical perspective. - Jim

The New, Improved 1984

The new, improved version of 1984 is based on complicity.

George Orwell's prescient book 1984 envisioned a technologically enabled authoritarian state of ubiquitous surveillance, propaganda and fear that constantly rewrote history to suit the needs of the present regime. Published in 1949, 1984 took the totalitarian templates of Nazi Germany and the Soviet Union and extended them into a future where the state employed technology to perfect not only control of the populace via police state repression but control of their minds via propaganda extolling the state and revising "facts" to support the current party line.

Welcome to the new, improved 1984, America 2013.

Ubiquitous surveillance: check.

Ubiquitous propaganda extolling the state and central bank: check

Perpetual fear-mongering: check

Perpetual war against an unseen enemy who can never be defeated: check

Police state with essentially unlimited powers to suppress "enemies of the state": check

Continual revision of history to support the current party line: check.

Have you noticed that every key metric of the economy is constantly being revised, rewriting history and installing a shiny new set of "facts"? In a recent podcast I recorded with Chris Martenson of Peak Prosperity, Chris pointed out that downward revisions in economic data are made only when the data point is safely over the horizon of history; that the U.S. GDP dipped into negative numbers in 2011 was masked at the time with the usual ginned-up positive numbers, and revised down to an approximation of reality years later when the reality has zero impact on the public perception of the state-managed "recovery."

The "headline number" is always positive, and its downward revision buried in an avalanche of new data. The revisions are so constant and so extreme that the recognition of this constant revision of history to suit the political needs of the current regime has been numbed; everyone knows the numbers are intended to paint a positive picture of a devolving, fragile economy and society, but we prefer this propaganda illusion to the harsh reality.

Why? Because half of us are getting a direct check, benefit or payment from the state. Over 61 million people get a check from Social Security, over 50 million draw Medicare benefits, another 50 million get Medicaid benefits, 47 million receive SNAP food stamp benefits, 22 million people work directly for the state on all levels, millions more work for government contractors that are effectively proxies of the state, millions more receive Federally funded extended unemployment, retirement checks, Section 8 housing benefits, and so on.

Orwell underestimated the power of complicity. Once a citizen receives a direct payment from the state, the state has purchased their complicity, for no matter how much that citizen may complain privately about the state, he or she will never risk the payment/benefit by resisting the state in a politically meaningful way.

Once you get a check from the state, you begin loving your servitude. The collusion of the state and its central bank is truly a thing of authoritarian beauty: the central bank (the Federal Reserve) creates money out of thin air and buys government bonds with the new money. The state can thus borrow unlimited sums at low rates of interest, and continue to send tens of millions of individual payments out to buy the passivity and complicity of its citizens.

The state is great when it sends you money, never mind where or how it gets the money or the incalculable costs of subservience and complicity.

We don't hate Big Brother; we don't care about Big Brother or the fear-mongering or the rewriting of history or any of the rest of it, as long as the state's money flows to our individual account. Our complaints are as hollow as the state's financial "facts."

Monday, August 05, 2013

Record jobs? Well, sort of . . .

According to the July jobs report, job prospects have been, and are, in the crapper.

Virtually no jobs went to those 16-19. Only 49,000 jobs went to recent college grads. Only 15,000 jobs went to those 25-54. Of the 160,000 new jobs, 60% went to those aged 55-69. So, say hello to that recently hired Wal-Mart greeter who is participating in government's highly-touted "record job creation."

The story and charts are here:

Saturday, August 03, 2013

Unemployment Is Falling And Other Federal Fictions

Like cost of living and housing numbers cut from whole cloth by the federal government each month, the unemployment numbers are pure fiction, meaningless numbers from meaningless calculations using meaningless assumptions by those who have something to gain. Even as government and its public relations arm, the mainstream media, breathlessly heralded the fall in the unemployment rate from 7.6% to 7.4%, the truth behind those numbers is the following:

- the "unemployment rate" has been going down because the government has been pretending that millions upon millions of American workers simply do not want jobs anymore. Why do they assume that? Because they want to.

A far more accurate measurement than the highly manipulated "unemployment rate" is the civilian employment-population ratio, that is, what percentage of working age Americans actually have a job. Before the last recession, 63 percent of all working age Americans had a job. During the recession, that number plunged below 59 percent, and has remained below 59 percent for 47 consecutive months, the first time in the post-World War II era that the ratio has not bounced back after a recession.

Other facts the government doesn't advertise are as follows:

- 76.7 percent of the jobs that have been "created" in 2013 have been part-time jobs.

- The percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013.

- Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

- One out of every four American workers has a job that pays $10 an hour or less.

- 53 percent of all American workers make less than $30,000 a year.

Bottom line: As far as employment is concerned, the last recession never ended no matter what kind of smiley face is painted on the pig.

More on this topic can be found here: