Blanketing opinions that I'll probably regret soon.

Tuesday, August 12, 2008

Just Some Economic Statistics

The proof that the USA's economy is doing pretty well is overwhelming and I never tire of repeating that here. The last page of The Economist always publishes a list of stats for various countries which is interesting. Here are some facts from this month's issue:

Countries whose latest unemployment rate is WORSE (higher) than ours:

China, Canada, Euro area, Belgium, France, Germany, Greece, Italy, Spain, Hungary, Poland, Russia, Sweden, Turkey, India, Indonesia, Argentina, Brazil, Chile, Colombia, Venezuela, Egypt, Israel, South Africa

Countries whose latest GDP growth is WORSE (lower) than ours:

Japan, Britain, Canada, Italy, Denmark, Hungary, Norway, Sweden

Countries whose latest inflation data is WORSE (higher) than ours:

China, Belgium, Czech Republic, Hungary, Russia, Turkey, Hong Kong, India, Indonesia, Malaysia, Pakistan, Singapore, South Korea, Taiwan, Thailand, Argentina, Brazil, Chile, Colombia, Mexico, Venezuela, Egypt, Saudi Arabia, South Africa

Full stats below:

The thing is when you make arguments like this, like the one you did about how much more the rest of the world pays for gas, is the true reason for the hysteria. It's not that inflation or unemployment are high, it's that it's higher than it way. Never underestimate the power of the change of the status quo! Especially in this country.
Dude, I note that Zimbabwe is not listed in countries with higher inflation rate...isn't their inflation rate something like 1 kajillion percent?

I see what you mean, and that's partly true, but trust me, the raw numbers ARE important and the comparison to (many) other countries sheds light on what it's like for humans around the world. We aren't even close to the level of economic problems as in the USA in the early 1980s where there was double digit unemployment, inflation and interest rates.

My point is that there's a sort of 100th Monkey effect going on about the economy: once the figurative 100th monkey says that the sky is falling, nearly everyone starts saying it -- and it's mosly whining. But the fact is, the Fed used to HOPE that unemployment got as low as 6% and right now it's only 5.7%! Nothin!

Also, check out this LA Times article on gas prices which says that "Gasoline is more affordable for American families now than it was in the days of the gas-guzzling muscle cars of the early 1960s."

My point: if you listen to the hype and whining, people might think it's bad out there ... until, that is, you actually look at the numbers.

The Economist list does not include Zimbabwe. It's only 42 of the strongest economies in the world.
you better watch out, my friend. this economy is not exactly zooming. i travel all around the country meeting with companies. i have a pretty good, first hand sense of what is going on in corp boardrooms.

big time players are getting pounded on wall street.

i do believe in trickle down economics. trust me if the richie riches are starting to feel it, they are going to make the middle class PAY. one layoff in your family, and you'll be singing a not so jolly tune about our economy.

it's bad karma to get cocky about our economy...

Famous economics maxim: "Never try and predict anything. Especially the future."

I report the present, my friends. That's all I'm doing.
Here are the details for all the countries I'm talking about.
To be blunt: the inflation statistics the U.S. government puts out are lies. In fact, the inflations stats most governments put out are lies. In fact, most economics stats most governments put out are lies.

Yes, my hat is made of pure tinfoil! But no, I'm not alone:

--Random Libertarian
Random Libertarian,

Right, "pure lies." as opposed to those highly reliable stats put out by the tinfoil hat brigade.

I didn't say "pure lies," I said "lies." I said my hat was made of "pure tinfoil," which is 100% true!

Sounds like Newsweek is part of the tinfoil hat brigade! Governments have every reason to lie about their economic statistics, which is why they do it so often.

--Random Libertarian
Newsweek publishes economic stats?

From your article:

"The traditional 'headline' inflation rate, measuring the rise or fall of an average of all prices for a broad basket of goods and services, was nudged aside in favor of an index that stripped out the supposedly more volatile categories of food (subject to price spikes due to weather or plague) and energy (subject to price spikes due to unfriendly foreigners)."

Stripping out products from the basket that are subject to short-term, volatile prices chances shouldn't be described as a "lie", should it? I mean, inflation is supposed to measure broad, long-term price increases --- general increases --- not the whims of something like steak or gasoline.

I think you are partially correct that the government's inflation stats don't perfectly reflect what affects consumers but it's not conspiratorial by your charge of a "lie".

The way I think govts produce all kinds of false information is that the people at the very top of the power structure know very well that they're lying, and the people below them are tasked with coming up with the results they know the people at the top want to hear.

So I don't believe that all the govt economists responsible for monitoring CPI and other less-than-reliable stats think or believe they're doing anything but coming up with the best statistics they can; they don't lie and they don't have to. They just produce the results their lying bosses want 'em to!

--Random Foil-Wrapped Libertarian
PS Lonnie -- not to get into a semantics debate, but notice that Newsweek themselves use the word "lie" and "lying" in the headline and subhead of the piece wrt to the govt (or the Fed).

Hope you're having fun in Houston. Bush country!

The word "false" with regards to inflation is a bit silly, don't you think? I mean, maybe "doesn't accurately reflect what you think it should" is better.

Since inflation is defined as "a rise in the general level of prices of goods and services over time" (italics mine) that can be a difficult thing to measure. Obviously, even a government does not have the ability to average the price of every good and service in circulation so they take a basket of general goods that best reflects price changes "over time" --- not short term ups and down (ie, oil) --- and average that. You have a problem with the choices put into that basket.

This is different from something being "false", or a "lie", isn't it?

As for the way the power structure in government works, you seem to have some more special knowledge of this than I do!
As for how power structures work in govt, that's just my conjecture.

They say inflation is difficult to measure, maybe so, but they introduce all these "hedonic adjustments" not to give us a clearer picture of inflation but to give themselves more tools to fudge with the numbers. Is fudging numbers a "lie" if it's done repeatedly in your favor? Maybe not a lie, but not stats I would trust.

You know I am going to argue with that definition of inflation! You're just baiting me to increase your comments you sick bastard. but for the record I think it should be emphasized that inflation is both a general rise in prices but also an increase in the money supply, and you know which of those two I think causes the other! (and who's to blame!)

(Answers for anyone else reading: the increase in money supply causes price inflation, and the Federal Reserve is responsible for it).

One other thing I want to mention with these inflation statistics is this: the government has a big, big, enormously big reason to claim inflation, CPI etc. are lower than they really are. That reason is that Social Security and other entitlement payments are calibrated to CPI. People getting Social Security right now are only receiving something like 50% of what they are entitled to -- they've been robbed of what the government promised them by artificially low official CPI.

If the U.S government didn't lie/fudge on the CPI numbers, we'd have had our credit cut off a long time ago. It's only by stealing from its own citizens that the state survives and thrives, and lowballing CPI and inflation is one of the scuzziest ways it does so: taking money from young people when they're working and promising them a secure income later, then slashing that income thru phony numbers when they're old. Pure parasitism.

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