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The Cost to Future Generations of the Economic Data Fabrications

bugs_'s picture




 

Much has been made lately of Jack Welch's "turn" on the Administration regarding the BLS data for September.  It seems a bit odd that Jack would be worried about this now since Zerohedge readers have been exposed to reports that this has been going on for a few years.  Why now Jack?

In fairness the September data point might not be as fabricated as everyone thinks.  The September data point COULD be the result of younger workers finally abandoning the conventional wisdom of obtaining higher education and instead attempting to retain their current employment.  A bird in the hand.  The September data point COULD be an important precursor to the awaited bust of the higher education bubble along with the inevitable collapse of the student loan ponzi.  I can rationalize the garbage data with the best of them!

September's data point will get all the press and the other piles and piles of bogus data points with their skewed revisions will get little notice.

The garbage data does serve to muddy the political and business decision making process.  Much of this data is viewed skeptically at the current moment which increases the uncertainty that both capital and labor abhor.

Beyond the current moment, however, and much farther in the future those generations will be studying the squandering of wealth that the current generations demanded or went along with.

One of the worst things happening from the viewpoint of history is the fabrication of all this data.  Future generations of students will wish there were good data from this tribulative period but it will not be there for them.

In retrospect how much of the data from Great Depression 1.0 can we trust?

The scholars of this age have deliberately falsified data or allowed falsified data to be published without significant dissent.  This is scholarly malpractice on a global warming scale.

Future students will argue about what the economy did and why.  The probability that there will ever be a correct consensus is low because of all the garbage data in the official historical record.

Many things are being squandered by the current political class but consider the potential lessons learned for future generations.   These may also be squandered by the tampering of government economic data by those who should have a higher calling.

Thanks Zerohedge!
Mark Hittinger
bugs_

 

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Thu, 10/11/2012 - 07:44 | 2877307 Meesohaawnee
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i think its great for future generations.. they will realize that pondering elections endlessly like the MSM wants you to do is like spinning in the hamster wheel of life. Their brainpower can be used in more productive ways and the quit wasting their time. The sooner they realize there is only one day every four years politicians give a shit about them the better..  The issues that people bitch about today endlessly will be the same issue they bitch about endlessly 40 years from now.

Thu, 10/11/2012 - 02:49 | 2877103 goodrich4bk
goodrich4bk's picture

All you people cozying up to Welch are a hoot!  You claim the BLS data is manipulated, which necessarily means that many people in the organization are willing to lie, and cover up lies, that are crimes.  They must know that if Romney wins their department will be investigated by the new sheriff in town, so you are assuming these people are taking some fairly large risks.  But what do they gain?  What is in it for them?  How do they benefit at all from an Obama second term?  It's not as if Romney has proposed eliminating the BLS along with Big Bird.

What's worse is that you don't apply this same logic to Welch.  What does he get from telling a poisonous lie that gets Romney elected?  Lots.  As in tens of millions of dollars.  For example, on just the estate tax alone, which is scheduled to go up in another year, Romney is promising to eliminate it.  That's a savings of 44% of Welch's estate for Welch's heirs.

Now, who again is telling you the truth?  Some government bureaucrats whose jobs are safe regardless of who wins the election, or a fellow who stands to save tens of millions, if not hundreds of millions, if he can convince you they and not he are lying? 

Thu, 10/11/2012 - 08:43 | 2877420 El Hosel
El Hosel's picture

Plenty of liars on both sides, the "two party's" deserve each other.... The Country deserves much better, wake up and smell the corruption!

Thu, 10/11/2012 - 05:26 | 2877177 StandardDeviant
StandardDeviant's picture

That's an interesting point.  The number certainly looks improbable, and awfully convenient for the incumbent.  It's not hard to conclude that the fix is in.

In that case, though, given an organization the size of the BLS you'd also have to expect that there'd be at least one or two disgruntled Republican-leaning ex-employees who would be more than happy to go to the press and detail exactly how the data is fudged, and by whom.

John Mauldin, love him or hate him, discusses some economic reasons why the numbers might actually not be cooked, here.  But he finishes up with a more nuanced look at the US unemployment picture, and concludes that the picture really is much worse than that nice 7.8% figure (even if true) would suggest.

Thu, 10/11/2012 - 02:30 | 2877096 poldark
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If the number of people unemployed has gone down why has the number of people claiming food stamps gone up (13% in the last two years)? Is it because people are taking jobs that pay less than they can live on?

Thu, 10/11/2012 - 01:55 | 2877081 ItsDanger
ItsDanger's picture

Beyond Jack's hyperbole, the need for a more accurate & relevant measure of employment is required now more than ever.

Wed, 10/10/2012 - 19:47 | 2876486 The Alarmist
The Alarmist's picture

The debate about the veracity of data reminds me of the old joke about having to outrun the friend and not the bear.

Social Security and Medicare are unfunded to the tune of $100 Trillion ... in current dollars. You will get your benefits, and they might pay for the postage stamp you will need to apply for them. 

Wed, 10/10/2012 - 19:36 | 2876462 JR
JR's picture

@bugs: In retrospect how much of the data from Great Depression 1.0 can we trust?

It is true that Keynes pronounced his depression theories ex cathedra, i.e., without substantial statistics to back them up. And that if actual statistics were produced that seemed to show results opposite to what his theories had predicted, he simply challenged the statistics.

However, there are accurate depression statistics. Henry Hazlitt, the nation’s best-known and best-respected financial writer and commentator, regularly holding forth in the mainstream – even left-of-center – The New York Times and (from 1946 to 1966) every week in Newsweek, actually published them in his 1959 book, The Failure of the New Economics, 1959, and entirely demolished all the Keynesian misconceptions…

Hazlitt also demonstrated that from 1949 to 1958, when the same policy of artificially pushing down interest rates as Bernanke is using was tried, “the relationship of unemployment to interest rates is almost the exact opposite of that suggested by Keynesian theory.”  IE: Unemployment rose as interest rates fell.

I also contend that it is generations X, Y and Z (1965 to Present), not the boomer generation so much, that have been thoroughly indoctrinated by the Leviathan state-run collectivist education system. Result: Obama was elected with an almost obscene percentage of the younger vote.

Therefore, I predict future generations will not differ if the malaise under which current generations suffer due to en masse social engineering as advocated by Lord Bertrand Russell in his 1951 book, is not abandoned.

He wrote: Physiology and psychology afford fields for scientific technique which still await development. The importance of mass psychology ‘has been enormously increased by the growth of modern methods of propaganda. Of these the most influential is what is called education. The social psychologists of the future will have a number of classes of school children on whom they will try different methods of producing an unshakable conviction that snow is black. Various results will soon be arrived at. First, that the influence of home is obstructive. Second, that not much can be done unless indoctrination begins before the age of ten. Third, that verses set to music and repeatedly intoned are very effective. Fourth, that the opinion that snow is white must be held to show a morbid taste for eccentricity. But I anticipate. It is for future scientists to make these maxims precise and discover exactly how much it costs per head to make children believe that snow is black, and how much less it would cost to make them believe it is dark gray. When the technique has been perfected, every government that has been in charge of education for a generation will be able to control its subjects securely without the need of armies or policemen.

http://catholicinsight.com/online/features/article_882.shtml 

 

Thu, 10/11/2012 - 00:35 | 2877028 seataka
seataka's picture

Thanks for that..

George Estabrooks said in one of his books in the late 40's that the only defense against being manipulated, is to become familiar with the techniques being used upon you.. (paraphrased)

In 1955 Robert Oppenhiemer described the threat posed by Atomic war as TRIVIAL - compared to the threats posed by misuse of the discoveries in psychology for mind control.

Wed, 10/10/2012 - 18:09 | 2876320 tweake
tweake's picture

Just apply the same discount as cooked-books Chinese equities to your evaluation of the good old USA government.

Wed, 10/10/2012 - 17:50 | 2876289 Vidar
Vidar's picture

Hopefully scholars in the future will know that economic statistics are simply historical data, not information to be used in developing economic theory. True economic theory is independent of statistics. Anyone with a knowledge of real economics can interpret statistics and would be able to tell if they were realistic or not.

A bunch of numbers is just a meaningless jumble unless you already have a theory with which to interpret those numbers. This is true whether the numbers represent actual observations or are made up to suit an agenda.

Thu, 10/11/2012 - 01:37 | 2877068 hbjork1
hbjork1's picture

Vidar,'

Discussion today on "All Things Considered on NPR with a statistian who is making the news because he has been verry successful in predicting election outcomes and baseball games in thande World Series.  He analysis includes exclusion of bad data.  He says if you do a thorough job and have enogh data, the bad data sticks out in his stastical models.  It can be ignored without damaging the validity of the prediction from his models.  

Wed, 10/10/2012 - 16:44 | 2876084 Walt D.
Walt D.'s picture

Shadowstats figured out these numbers were worthless years ago.

What sense does an unemployment figure of 8% or 7.8% mean if you are a recent college graduate, African American, female ..let alone an African Amercan male in the 18-25 age range?

Wed, 10/10/2012 - 20:27 | 2876573 Radical Marijuana
Radical Marijuana's picture

Yeah, the only novelty in this news was the relative celebrity of he who said it. Just like protests can go on and on, BUT the mass media ignore them, UNTIL some famous person picks up the cause ... Nothing about that cause to protest changes, it is just the god damn more mass media "news" worshipping the celebrity that they create in their own image, for their own sake.

The deeper situation is the human reality is always organized lies operating organized robbery. There is nothing new that the government is lying to us!  The only difference is the automatic degree to which their lies, backed by violence, RUNAWAY, to become worse and worse, faster and faster. The only new thing is that process of runaway dishonesty is reaching proportions where it is becoming more painfully obvious. Of course, that destroys the options for the future. In the short-term the lies backed by violence run normal systems of fraud and robbery to benefit the few, which causing suffering to many. However, in the longer term, the worst effect is that science itself is forced to become more and fraudulent. While not as important in the near future, fraudulent science is by far the worst long term threat!

Wed, 10/10/2012 - 16:28 | 2876040 CrabGrassKila
CrabGrassKila's picture

Mr. Welch was just calling out, our King, and challanging us all to Dump, this Clueless and Clothesless, Emporer..........

Thank you for representing........ 

Wed, 10/10/2012 - 16:01 | 2875960 Wakanda
Wakanda's picture

Future generations will learn rarely to trust groups over a headcount of 10.  After that, it's usually a gang that wants to roll you.

Wed, 10/10/2012 - 15:35 | 2875879 lasvegaspersona
lasvegaspersona's picture

I am under the assumption that we will hyperinflate and reset. If we actually have to live far into the future with the mess that has been made of our economy...wow!!...phew!!...it will be one ugly future.

Wed, 10/10/2012 - 15:58 | 2875956 covert
covert's picture

history is not just a story told, but an investigation.

http://covert.ias3.com/expose/

Wed, 10/10/2012 - 15:27 | 2875852 kaiserhoff
kaiserhoff's picture

The great tragedy is that future generations won't have accurate data?

Dude, you need to get out more.  Family formation is in the crapper.

Wed, 10/10/2012 - 15:25 | 2875844 Grand Supercycle
Grand Supercycle's picture

Wile E. Coyote overdue equity sell off gains momentum.

http://www.zerohedge.com/news/2012-12-24/market-analysis

http://trader618.com

Wed, 10/10/2012 - 16:14 | 2876006 Meesohaawnee
Meesohaawnee's picture

overdue by 10 months.

Wed, 10/10/2012 - 15:10 | 2875801 verum quod lies
verum quod lies's picture

If you want corrected values go to: http://www.shadowstats.com/

There is no mystery, the numbers are biased and for a fee you can have corrected values that represent rather closely the methodology used before the big changes occurred around the early 1980s.

 

Wed, 10/10/2012 - 15:01 | 2875781 LawsofPhysics
LawsofPhysics's picture

Was this posted by a graduate student in eCONomics?  Who else would waste time "rationalizing garbage".  I mean, aside from a trash collector of course.

Wed, 10/10/2012 - 14:49 | 2875722 DUNTHAT
DUNTHAT's picture

What about the inflation numbers?

Anybody willing to destroy the world economy in order to feather their nest, won't think twice about lying on employment numbers, inflation numbers, polls, or whatever.

 

Wed, 10/10/2012 - 16:35 | 2876062 LMAOLORI
LMAOLORI's picture

 

 

Didn't you hear they changed those number's a couple years ago both how they now report unemployment and inflation (they no longer count the things you actually need to live like FOOD) so they aren't really lying (sarc) 

But even with the changes they can't completely hide the inflation

Social Security benefits will get small cost of living bump

snip

NEW YORK (CNNMoney) -- Social Security recipients will get less than a 2% increase in their benefits next year to account for a rise in cost of living, according to an estimate published Tuesday

Wed, 10/10/2012 - 16:21 | 2876024 Peter Pan
Peter Pan's picture

And how about the casualties in Iraq which as far as I am aware do not include casualties arising amongst the ranks of the contract soldiers.

Wed, 10/10/2012 - 13:52 | 2875517 aerojet
aerojet's picture

In graduate school, my adviser got a lot of government grants, NSF, what have you.  One of his major benefactors was BLS--devising tools to help others make better use of their data.  That was all well and good and I learned a lot through those interactions and through the work.  But one thing that occurred to me very early on was that the data seemed too convenient, even to the point of being cooked.  When I discussed this matter with my adviser, he became indignant and was actually rather upset with me for daring to raise the possibility that the fine folks at the BLS would ever conceive of hoodwinking or outrighty lying to the public.  I'm sure much of his concern was driven by not wanting to bite the hand that fed him (or have me say something that would upset them and hurt the relationship), but part of being at a university and doing research is being objective about where that research takes you.  When it came to the BLS, there was no objectivity on our part--the data was accpeted as fact, no questions asked and do not bring it up again if you know what is good for you.  I'm sure not everyone at BLS is happy about this situation, but if they want their cushy government statistician jobs, they don't mouth off, either. 

Jack Welch is really late to the party, but better late than never!

Wed, 10/10/2012 - 21:45 | 2876720 Chuck Walla
Chuck Walla's picture

When I discussed this matter with my adviser, he became indignant and was actually rather upset with me for daring to raise the possibility that the fine folks at the BLS would ever conceive of hoodwinking or outrighty lying to the public.  I'm sure much of his concern was driven by not wanting to bite the hand that fed him (or have me say something that would upset them and hurt the relationship), but part of being at a university and doing research is being objective about where that research takes you.  When it came to the BLS, there was no objectivity on our part--the data was accpeted as fact, no questions asked...

These days, cold, hard data is no match for cold, hard cash. 

FORWARD SOVIET!

 

 

 

 

 

 

 


Wed, 10/10/2012 - 23:23 | 2876637 Radical Marijuana
Radical Marijuana's picture

This comment is another personal anecdote illustrating the most profound of all political problems! The sublime paradoxical paradigm shift that is needed is to STOP using the false fundamental dichotomies between lies versus truth. There are NO "good guys" only different kinds and degrees of "bad guys."  The failure to understand the basic unitary mechanisms prevents developing a better dynamic equilibrium. The STARTING premise should be that governments, and the people who really control governments, are always actually the best organized gangs of criminals, who are simply relatively better at being dishonest, and backing that up with violence.

Runaway problems of funding research thereby generating more and more fraudulent science need to be corrected by a paradigm shift in the ideas of the philosophy of science itself! Of course, that requires the paradox of encouraging critical thinking, inside the environment where that is actively discouraged, because good analysis of social realities ALWAYS results in perceiving some system of organized lies, operating organized robbery. It is IMPOSSIBLE for good social science to ever come to any other conclusion, because that conclusion is hard-wired, by definition, into the ability to perceive any politics in the first place.

All of our social sciences, which obviously and emphatically includes social statistics, are inside the irreducible problem that societies end up being controlled by the biggest bullies, and those biggest bullies' bullshit social stories become dominant. That then automatically tends to runaway, and become more and more insane. People are forced to accept bigger and bigger lies, in order to live their lives. The "opposition" to those lies is almost always controlled to spout basically the same sublime bullshit of impossible ideals that the biggest bullies already do too! THE PROFOUND QUESTION behind all of that is whether or not human sciences could survive to evolve to become more self-aware?  IF they do, then they must embrace the paradoxes which are essential to the scientific enterprise itself, and which all the more advanced sciences, like mathematical physics, have already been forced to accept and adapt to, within their basic epestimology. (That is why the more advanced physics has ended up returning to ideas which originated in ancient mysticism.) The philosophy of science is extremely important to a technologically based society. The more powerful the science and technology, the more dangerous the psychotic disconnections between our social stories, and the real power in other physical sciences, becomes!

The crucial issue is the one that I started this with. Good social science is based on unitary mechanisms appreciating that human realities are always systems of organized lies, operating organized robbery, as inherent, by definition, in that reality. Those are the actual unitary mechanisms, and thus, there are NO fundamental dichotomies between people. Governments are, in fact, the biggest terrorists, and so, that is what adequately done social science always discovers to be the case, and which facts are becoming more obvious to more people, as that is now in a runaway situation, since there are too few factors to bring back balance to the runaway rates of social robbery, because the opposition to that runaway robbery is controlled oppostion, which promotes the preposterous and impossible ideal that there should be NO robbery.

Fraudulent social statistics get to be a runaway because there is a false dichotomy posited between the "truth" versus the lies. In a sense, that is the enormous meta-lie, which is one of the most sublime aspects of the biggest bullies' bullshit stories, which is, therefore, also promoted by almost all the controlled opposition from reactionary revolutionaries, who resist the runaway robbery with the same immaculate hypocrisy that the bullies promote their robberies with!

This little news story, and the recounting of an anecdote about life at a university it provoked, are just more and more of the tiny steps of the established lies automatically getting worse, and therefore, more people starting to see that, and to begin to talk about it more openly. However, without the more profound paradigm shifts, especially in the way that we think about the oldest and best developed of social science, namely, warfare, then we are STILL inside a runaway psychotic social insanity, automatically getting worse, with no better balancing of that actually happening enough to make any significant difference, so far ...

Thu, 10/11/2012 - 01:52 | 2877079 Boxed Merlot
Boxed Merlot's picture

fraudulent science need to be corrected by a paradigm shift in the ideas of the philosophy of science itself...

 

At the risk of provoking inordinate ridicule and accusations of stoking the eternal fire, I ask , why not?  That is, in regards to philosophy being the handmaiden of theology, the problem as I see it is the lack of a desire to seek the divine.  By divine, I would assert the higher and more virtuous capacity the being known as human can define as "Holy".  Humanity is basically evil, I'm not sure that requires a great deal of evidential argument, but it is rarely if ever actually believed as a gradient scale is usually applied to justify individual conduct.

I further understand not all people view the divine as "good", but for those that do, the aspiration to copy is inevitably met with failure and ultimately guilt.  We are afterwards likely to resume a life of trudgery and resignation.  It is here that the creature gains a degree of relative comfort.  Those creatures with greater strength and fortitude of will take advantage of these weaker souls and proceed to plunder their otherwise rightful inheritance.  I would hope the philosophers of this age would make known this travisty of justice, but as recent historical events have shown, they are far more likely to partake and exalt in their positions of authority and make the self inflicted suffer all the more by laying heavier and heavier burdens on them.

70 to 80 orbits, that's what needs to be understood, imo.  We're all subject to the rule of fight club, i.e., on a long enough timeline, the survival rate for everyone drops to zero.

 

jmo w/ a bit of boxed vino.

Thu, 10/11/2012 - 06:12 | 2877218 StandardDeviant
StandardDeviant's picture

"...philosophy being the handmaiden of theology"?

"...the lack of a desire to seek the divine"??

"Humanity is basically evil, I'm not sure that requires a great deal of evidential argument"???

Mate, it appears that the boxed Merlot is not doing you any favours today.  Consider abandoning the desire to "seek the divine", and seek a nice Merlot from, say, Bordeaux, or maybe the Napa or Sonoma Valleys - or even Washington State, which has some fine examples from the eastern part of the state...

Wed, 10/10/2012 - 20:25 | 2876562 Oldrepublic
Oldrepublic's picture

quote from Upton Sinclair:

re: aerojet

It is difficult to get a man to understand something when his job depends on not understanding it.
Wed, 10/10/2012 - 19:06 | 2876413 Westcoastliberal
Westcoastliberal's picture

This country is totally eaten up with "go along to get along" and if you don't you'll be suicided or "disappeared".  And THAT'S the truth!

Wed, 10/10/2012 - 19:45 | 2876482 philipat
philipat's picture

That's called Totalitarianism??

Wed, 10/10/2012 - 19:44 | 2876480 The Alarmist
The Alarmist's picture

Nah, it's pure coincidence that whistle blowers drown under the covers of their hot tubs.

Wed, 10/10/2012 - 17:29 | 2876234 illyia
illyia's picture

The Greatest CEO America has ever known is not late to the party.

Wed, 10/10/2012 - 13:39 | 2875462 WALLST8MY8BALL
WALLST8MY8BALL's picture

ZH is Jack's inflamed sense of rejection!

Wed, 10/10/2012 - 20:04 | 2876526 DaveyJones
DaveyJones's picture

it's another inflamed area of jack

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