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Okun's Brokun... Or Why Someone Is Lying

Tyler Durden's picture


For those who wish to get straight to the punchline, and why we ask if someone is openly lying, here it is:

For those who want some background color, read on.

A year and a half ago, we asked a simple question: "Is Okun's Law The Latest Casualty Of Central Planning." For those unfamiliar, and to paraphrase what we said in February 2012, "Okun's rule-of-thumb relates the long-term empirical finding that a country's unemployment rate is closely related to a country's output (or GDP). To be a little more explicit, it is the change in unemployment that is more notable in its relationship to the potential GDP (the output gap). Okun's original work noted that a 3% increase in output corresponds to a 1% decline in unemployment rates (and/or rise in labor force participation, rise in hours worked, and rise in labor productivity)."

Several months later, none other than Jon Hilsenrath, who back then wasn't quite as busy with paraphrasing every word uttered by various FOMC central planners for the benefit of Getco's vacuum tubes, explaining to the market why it is so wrong and the Fed never intended for the epic bear flattener to take place in the process crucifying all bond managers (see today's Bill Gross letter), and why things are really much better in the Princetonian ivory tower than in reality, followed up on our observations with his own question: "How can an economy that is growing so slowly produce such big declines in unemployment?"

Something about the U.S. economy isn't adding up. At 8.3%, the unemployment rate has fallen 0.7 percentage point from a year earlier and is down 1.7 percentage points from a peak of 10% in October 2009. Many other measures of the job market are improving. Companies have expanded payrolls by more than 200,000 a month for the past three months, according to Labor Department data. And the number of people filing claims for government unemployment benefits has fallen. Yet the economy is barely growing. Many economists in the past few weeks have again reduced their estimates of growth. The economy by many estimates is on track to grow at an annual rate of less than 2% in the first three months of 2012. The economy expanded just 1.7% last year. And since the final months of 2009, when unemployment peaked, the economy has expanded at a pretty paltry 2.5% annual rate."

How ironic then that one year later, $700 billion more in debt monetized by the Fed, the stock market just shy of all time highs, the US economy grew by essentially the same annualized amount and at the lowest year over year growth rate since 2010, even though the unemployment rate, supposedly, keeps dropping. 

Of course, back then inquiring about the validity of Okun's Law was all the rage (if only for a few weeks) as there was some hope it may normalize. It didn't, and after the spring of 2012, the topic wasn't breached by anyone again for fears of the embarrassment Bernanke could suffer if someone asked him what is going on with Okun's law at one of the quarterly media press conferences.

At least, it wasn't until now, when we were happy to see at least one other commentator raise some red flags surrounding the ongoing collapse in all traditional economic relationships.

In "When Numbers Don't Add Up", Bloomberg's Caroline Baum catches up with Zero Hedge circa February 2012, and observes that:

Just because economics relies on numbers doesn't make it a mathematical science. For example, gross domestic income -- the costs incurred and income earned in the production of the nation's output -- should equal gross domestic product. It doesn't. Ever. The Bureau of Economic Analysis adds up the two columns, draws a line and reconciles them with the notation, "statistical discrepancy."


Sometimes there are anomalies within GDP. BEA's third guess at first-quarter GDP was a lot weaker than growth implied by labor inputs (employment and hours worked). Real GDP growth was revised from 2.4 percent to 1.8 percent -- one-fourth of last quarter's output gone in a flash! The major source of the adjustment was to real consumer spending on services, which was slashed to 1.7 percent from 3.1 percent, based on new data from the Census Bureau's Quarterly Services Survey. The QSS, which gathers revenue from the sales of a wide range of services, is a relatively new addition to the BEA's statistical library.

She then references two economists who are desperate to explain what is going on without admitting what we said nearly two years ago: that central-planning has broken the economy in virtually every possible way.

Joe Carson, head of global economic research at AllianceBernstein LP, was quick to point out (to BEA, too) the inconsistency between reported GDP and output implied by an alternative method of calculation: using the sum of aggregate hours worked (the number of employees times the number of hours) and productivity.


"Hours worked in the private service sector is growing faster than output, which would imply a decline in productivity," Carson said. "If that were true, firms would be shedding workers rather than hiring."


Neil Dutta, Head of Economics at Renaissance Macro Research, had trouble with the math as well. Private hours worked for the overall economy rose 3.6 percent and productivity increased 0.5 percent in the first quarter, implying a 4.1 percent increase in GDP.


Could the Labor Department have overestimated employment and hours? "It's hard to see why," given solid growth in individual withholding and corporate taxes reported by the Treasury, he says. Tax data tend to be reliable because people don't withhold taxes, and corporations don't pay taxes on income they didn't earn. (Sometimes they don't pay it on earned income either.)


That leaves productivity growth, which is a derived number: output divided by hours worked. Mathematically, it has to be revised down with GDP. "Whether that's an accurate reflection, given strong tax receipts and hours, is the question," Carson says.

In other words, something is way off: either the unemployment data is very much wrong and the real unemployment rate is far higher especially when normalized for the collapsing labor participation rate and the surge in part-time and temp workers, or the GDP calculation is incorrect and the economy is growing at a 4%+ rate. (It isn't). The scarier implication is that in addition to all other seasonally adjusted economic data points which have become painfully unreliable, daily Treasury tax receipts must also now be added to the docket of meaningless and corrupt data points. The question of just how the Treasury could explain a massive (and deficit boosting) cash discrepancy could only be answered if somehow the Fed is found to be parking cash directly into the Treasury's secret basement.

But that would be very illegal...

Obviously, the US economy is not growing at a 4% pace, although following next month's wholesale revision of the GDP calculation which will include the benefit of intangibles, we wouldn't be surprised if the BEA and BLS push the country's entire economic reporting apparatus fully and entirely into wonderland, and absolutely every economic number is no longer accurate, relevant or unmanipulated.

In the meantime, and while we still have at least one apples to apples economic data set, here is the record spread between the annual growth rate in GDP and the annual drop in unemployment.

The chart needs no explanation.


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Sat, 06/29/2013 - 13:48 | 3706143 francis_sawyer
francis_sawyer's picture

Okun's Broken... There is only the Bernank...


Before you junk that ~ get yourself a crayon & color in the main DIVERGENCE areas... Especially AFTER QE2...

Sat, 06/29/2013 - 13:52 | 3706158 Beam Me Up Scotty
Beam Me Up Scotty's picture

Graphs and charts are meaningless now, because the data is all pencil whipped anyway.  In other words, they are LYING.

Sat, 06/29/2013 - 14:34 | 3706206 ZerOhead
ZerOhead's picture

"When it becomes serious, you have to lie,..."

~ Jean-Claude Juncker


I guess things must be getting serious then...

Sat, 06/29/2013 - 14:34 | 3706210 BoNeSxxx
BoNeSxxx's picture

Okun's Razor?

Sat, 06/29/2013 - 15:16 | 3706258 James_Cole
James_Cole's picture

Economics isn't a real science, there are no 'laws.' The whole thing is made up (including the economy itself being a human construct - not a law abiding force of natural) which is why Okun's law is like reading tea leaves.

^ Bernanke - economist - on this topic

Notably, an examination of recent deviations from Okun's law suggests that the recent decline in the unemployment rate may reflect, at least in part, a reversal of the unusually large layoffs that occurred during late 2008 and over 2009.  To the extent that this reversal has been completed, further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.

Sat, 06/29/2013 - 17:01 | 3706372 eatthebanksters
eatthebanksters's picture

Does Okun's Law reflect the technology factor in the equation.  As technology advances so does productivity, even with a loss of jobs.  GDP can grow with loss of jobs in an environment where effeciencies through technology rapidly drive productivity..  I entered the world of scalable technology about 20 months ago...all I can say is that if anyone has a job that is based on logical processes and lmited thinking, in time you will be replaced.  Athletes, specialists, highly educated people, will keep their job as will manual laborers (in the latter onlly as long as their costs to perform are less than the cost to develop a machine to replace them).  Middle and lower management jobs are disappearing as are high paid union jobs.  The free market cannot be denied.  People have choices and need to be thoughtful as to the consequences of those choices going forward.  The job market is forever changed. We have an abundance of jobs in the tech world, so many that we cannot fill them with our home grown social sicence and art history majors so we recruit overseas.  The world is vastly different than it was even 20 years ago, and it will never go back.  Technology has also created a huge rift in our class structure.  Jobs that cannot be replaced by technology will be fewer and higher paying.  All others will create competition and drive wages down.  Just like we orbit the sun this is a law of nature that cannot be changed with government intervention and central planning.



Sat, 06/29/2013 - 17:26 | 3706427 Beam Me Up Scotty
Beam Me Up Scotty's picture

"The free market cannot be denied"

You said "free market".......LOL!!

We haven't had anything remotely close to a "free market" for a long time.  And even less so since Obama has taken office.  He thinks jobs are created by the government.  You can give a turd counter a job and a paycheck, but you have to take the money from someone else to give him that job.  And we have a severe overabundance of turd counters in our government.

Sat, 06/29/2013 - 17:54 | 3706477 espirit
espirit's picture

We'll continue to see the unemployment numbers drop until everyone is employed by .gov, or receiving sustenance benefits.

Forward Soviet!   ...or Meh, another day in the Matrix.

Sat, 06/29/2013 - 19:02 | 3706596 Greyhat
Greyhat's picture

Yes,  "Hours worked in the private service sector is growing faster than output, which would imply a decline in productivity," just means more private cyberwar contractors desperatly waiting for a cyberwar. :)

Sun, 06/30/2013 - 02:59 | 3707236 dunce
dunce's picture

"Continued accomodative policies", more QE, surprise, surprise!

      Gomer Pyle.

Mon, 07/01/2013 - 06:07 | 3709393 rex-lacrymarum
rex-lacrymarum's picture

Economics is indeed a science and there are economic laws. The problem is that modern mainstream macro-economic theorizing assumes it to be akin to a natural science like physics, that can deliver proofs by means of studing emprical data (a.k.a. 'economic statistics'), this is to say the data of economic history. However, this is not how it works and is the main reason why most economists nowadays cannot forecast their way out of a paper bag and have rarely anything relevant to say about economics. Economic science is a social science, the best elaborated branch of praxeology, or the science of human action. Its laws are derived by logical deduction and ratiocination and can neither be confirmed nor refuted by empirical data. Economic history is as the term implies a field of study for historians, not economists. Of course such historians should be aware of the tenets of economic theory if they want to interpret the events of economic history correctly. But history is not the same as a reproducible experiment that can tell us anything about economic laws. Human beings are not inanimate rocks, they act with purpose and volition. Economic theory and the laws derived from it can tell us if the means chosen to pursue economic ends are likely to succeed in achieving said ends or not. 

Sat, 06/29/2013 - 15:28 | 3706268 drchris
drchris's picture

Unemployment rate without participation rate is meaningless. Unemployment rate tells you what % of the "workforce" is employed. The participation rate defines "workforce". The two numbers CAN NOT be analyzed separately. 

Sat, 06/29/2013 - 16:13 | 3706303 Pool Shark
Pool Shark's picture



Exactly, drchris.

These two charts explain it all:

Now get back there and push my wagon; I want to go faster...


Sat, 06/29/2013 - 18:39 | 3706551 rosiescenario
rosiescenario's picture

....the degree of severity = the measure of divergence, using Lazlo's ruler.....with mm calibration chosen.

Sat, 06/29/2013 - 13:52 | 3706160 Triple A
Triple A's picture

The whole economy is broken, this is not going to be a slow collapse when it happens. It is going to be just like 08, when they had to come out and say were completely fucked and if we don't steal all your money the world is going to end. Like Peter schiff says, Bernank and the fed arent the training wheels, They are the only wheels. 

Sat, 06/29/2013 - 18:45 | 3706560 fockewulf190
fockewulf190's picture

It has to be the stealth GDP contribution being created by the millions of people operating within the illegal work force that is throwing all the stats out of whack. And the weather...don't forget the damn weather! /sarc

Sat, 06/29/2013 - 21:23 | 3706844 golfrattt
golfrattt's picture

Unemployment percentages don't differentiate between full and part-time jobs...


A natuion of Full-time workers @ rate of 7.6% unemployment will produce a hell of alot higher GDP number that a nation of part-timers @ the same number...


Which is what we have...

Sun, 06/30/2013 - 02:08 | 3707200 NidStyles
NidStyles's picture

U-3 does differentiate, which is also the figure most of the MSM uses to report unemployment figures.

Sat, 06/29/2013 - 13:52 | 3706154 Bunga Bunga
Bunga Bunga's picture
U.S. bugged EU offices, computer networks

Looks like European Union got on the list of terrorist organizations.

Sat, 06/29/2013 - 13:58 | 3706166 bank guy in Brussels
bank guy in Brussels's picture

Article pointing out how, from the earlier NSA whistleblowers before Snowden, it was clear that a main function of NSA is to gather blackmail material against US political figures, judges, and so on, to either extort them or threaten to kill them, or to help actually murder them.

The whistleblowers before Snowden actually painted a worse picture of what was happening, than Snowden himself.

We can assume everyone in US Fed, Treasury, statistics offices etc has an NSA file ready to blackmail them, or worse, to create all this fakery about the US economy.

The NSA material was likely used for death threats against US House Judiciary Committee Chairman John Conyers ... smears were gathered to imprison Conyers' wife, to make sure Conyers backed down from seeking impeachments of corrupt US judges serving the oligarchs. Conyers was reminded of how they murdered other Congressmen, particularly Sonny Bono on the same Committee.

We have, in 50 years: 2 US Presidents shot (JFK, Reagan), 2 killed US Senators (Paul Wellstone, John Tower), 5 killed US Congressmen (Hale Boggs, Nick Begich, Larry McDonald, Sonny Bono, Wayne Owens), 1 killed US Governor (Mel Carnahan), 1 killed CIA director (William Colby), 1 killed Federal Judge (John Roll).

Enough dead to threaten all US leaders in all 3 branches of government, right to the top.

Sat, 06/29/2013 - 14:55 | 3706236 ZerOhead
ZerOhead's picture

Worse yet, Tice’s revelations raise even more troubling issues. Tice and his NSA whistleblower colleagues revealed that the NSA’s massive, illegal spy-on-Americans program began in February, 2001 – seven months BEFORE the 9/11 attacks! As Andrew Harris reported for Bloomberg in July, 2006:

“The US National Security Agency asked AT&T Inc. to help it set up a domestic call monitoring site seven months before the Sept. 11, 2001 attacks, lawyers claimed June 23 in court papers filed in New York federal court… ‘The Bush Administration asserted this became necessary after 9/11,’ plaintiff’s lawyer Carl Mayer said in a telephone interview. ‘This undermines that assertion.”’

Sat, 06/29/2013 - 16:29 | 3706332 Totentänzerlied
Totentänzerlied's picture

‘The Bush Administration asserted this became necessary after 9/11,’ plaintiff’s lawyer Carl Mayer said in a telephone interview. ‘This undermines that assertion.”’

All they said was that it "became necessary after 9/11" - as in, before that, it was, ya know, just for kicks.

Sat, 06/29/2013 - 16:57 | 3706371 franzpick
franzpick's picture

Your personal data and history can be used to stop your life, family and career the very next day after you wander off the NSA/federal/corporate reservation.  On the afternoon of Dec. 8th 2008 I posted on CRisk that IL governor Blagojevich had made a potentially lethal mistake in announcing the state's termination of business with B of A, that he had politicized the failing credit situation, and that targeting B of A had potentially disastrous consequences for him. I was astounded with the rapidity with which he was silenced publicly on TV the very next day (by an enraged IL northern district attorney Patrick J. Fitzgerald) with the charge of mail fraud and soliciting bribes.

NSA, other spy agencies, the administration and its politicized agency cabals have everything they need on you to ruin or buy you in a moments notice upon your first political transgression, whether you are Rod Blagojevich, David Petreaus, John Roberts, or one of many others jailed, silenced or intimidated:

Dec. 8, 2008: "Blagojevich threatened to stop the state’s dealings with Bank of America Corp. over a shut-down factory in Chicago. On December 8, 2008, all state agencies were ordered to stop conducting business with Bank of America to pressure the company to make the loans. Blagojevich said the biggest U.S. retail bank would not get any more state business unless it restored credit to Republic Windows and Doors." WIKIPEDIA

Dec. 9, 2008: "The case gained widespread attention with the simultaneous arrests of Blagojevich and his chief of staff, John Harris, on December 9, 2008, at their homes by federal agents.[8][9] Blagojevich and Harris were each charged with one count of conspiracy to commit mail and wire fraud and one count of soliciting bribes."  WIKIPEDIA

Elected leaders, congress members, agency authorities and judges knowing for some years, as messenger Snowden has revealed, that their entire histories are readily at hand to be suddenly used to end their careers or alter their decisions, will remain locked in collusive, corrupt, non-representative civic suppression. perhaps until some ultimate public outrage results in a non-voting overthrow of their oppressive system.

Sat, 06/29/2013 - 14:50 | 3706223 ZerOhead
ZerOhead's picture

Keep a close eye on your enemies...

Keep an even closer eye and a loaded shotgun on your friends...


~ Dick Cheney

Sat, 06/29/2013 - 17:54 | 3706475 Al Gorerhythm
Al Gorerhythm's picture

With friends like his........

Sat, 06/29/2013 - 15:00 | 3706243 JimmyRainbow
JimmyRainbow's picture

wonder if they have cisco switches.

ecb has hirschmann which noone uses outside europe

Sat, 06/29/2013 - 15:02 | 3706245 Bunga Bunga
Bunga Bunga's picture

The term "maintenance account" gets a whole new meaning.

Sat, 06/29/2013 - 16:04 | 3706288 Non Passaran
Non Passaran's picture

Good, there is at least one instance of all that gear used to correctly identify a terrorist group!
Hope they'll post drone job ads here if they need people wiling to help with the hunt on the Red Commission.

Sat, 06/29/2013 - 13:52 | 3706155 andrewp111
andrewp111's picture

We already know the participation rate has been declining rapidly, and Obamacare is crushing employment in the same way an increase in the minimum wage would. ZIRP is very distorting as well. There is no mystery here. You can't expect continuity with the past when underlying conditions have changed.

Sat, 06/29/2013 - 14:25 | 3706200 Landrew
Landrew's picture

Wow how wrong you are, Obamacare main parts are not in service yet. Most of what is in place was already mandated by States. This is beyond our thoughts of what our government was. This isn't Dummycrat or Republican't. This is .1% against the rest of us.

Sat, 06/29/2013 - 16:30 | 3706341 Totentänzerlied
Totentänzerlied's picture

"This isn't Dummycrat or Republican't. This is .1% against the rest of us."

Okay smartass, just who do you think actually designed Obamacare?

Tick tock, we're waiting...

Sat, 06/29/2013 - 17:55 | 3706478 JohnnyBriefcase
JohnnyBriefcase's picture

Umm, probably the people who profit most from it like the insurance/pharmaceutical companies?

Sat, 06/29/2013 - 13:52 | 3706156 oklaboy
oklaboy's picture

How dare you be critical of the BOL/ must be racist

Sat, 06/29/2013 - 13:54 | 3706161 Beam Me Up Scotty
Beam Me Up Scotty's picture

Not just racist, you are a terrorist racist.  Or a racist terrorist.

Sat, 06/29/2013 - 14:05 | 3706173 inevitablecollapse
inevitablecollapse's picture


Sat, 06/29/2013 - 15:27 | 3706266 surf0766
surf0766's picture

Das racist.

Sat, 06/29/2013 - 16:22 | 3706320 logically possible
logically possible's picture

Call for a drone.

Sat, 06/29/2013 - 16:47 | 3706360 James-Morrison
James-Morrison's picture

And where are the drones 
Send in the drones 
Don't bother, they're here.

Sat, 06/29/2013 - 20:05 | 3706715 HowardBeale
HowardBeale's picture

"Not just racist, you are a terrorist racist.  Or a racist terrorist."


I think "fucking" goes in there somewhere.

Sat, 06/29/2013 - 13:54 | 3706163 Midasking
Midasking's picture

It is all lies.  The economy isn't growing at all and it is about to get worse.  Borrowing and spending will Never produce a true recovery.  We need to save and invest but to get to that point would mean mass layoffs and a severe depression liquidating the debt.. which is politically unacceptable. So look for more spending, more QE, more economists justifying the growth in government.  It is all BS.

Sat, 06/29/2013 - 18:01 | 3706485 espirit
espirit's picture

You must have just taken the red pill, of course the Matrix is all lies.

Sat, 06/29/2013 - 14:04 | 3706172 Stuck on Zero
Stuck on Zero's picture

This is clearly a case of Maxwell's Demon at work.


Sat, 06/29/2013 - 14:07 | 3706176 Quinvarius
Quinvarius's picture

Of course the Fed has begun just giving money to the government.  They would not be saying anything about taper if they had not already moved on to super QE5 in stealth backup plan.  The Fed has no choice but to continue giving free money to the government and the bankers, whether they admit it or not.  And in the end, they are just going to completely lie about everything as they are forced to print more and more.

When ever some idiot on TV says QE is going to end, just say "prove it".  It is an impossibility for our government and banking system to function without trillions a year in printed money.

Sat, 06/29/2013 - 14:42 | 3706220 Bay of Pigs
Bay of Pigs's picture

Kind of like the BlowHorn crowd talking about gold. They can't "prove" that anyone is selling phyical gold. It's all paper humping bullshit (GLD) and smoke and mirrors. CB's are hoarding and stockpiling physical gold, not selling it.

The coming reset in PM's is going to be epic. Jaw dropping in fact.

Sat, 06/29/2013 - 14:44 | 3706222 1100-TACTICAL-12
1100-TACTICAL-12's picture

My question is how long till it blows, it's like watchin paint dry.

Sat, 06/29/2013 - 20:50 | 3706793 boooyaaaah
boooyaaaah's picture

""says QE is going to end, just say "prove it".  It is an impossibility for our government and banking system to function without trillions a year in printed money.""

Once Upon A Time

Taxpayers were respected and courted by pols. They needed the money

Now they only need free money

And they use it to buy votes

The taxpayer wonders "gang of eight" " "invade Iraq?" " invade Syria" "arab Spring"

Money comes off trees you stupid taxpayer



Sat, 06/29/2013 - 14:10 | 3706183 Flakmeister
Flakmeister's picture

Why would an empirical relationship established in the non ZIRP era then extrapolated into ZIRP environment have any predictive value?

It is like trying to use Newtonian Gravity to understand a Black Hole, however, it dignifies economics too much to use that comparison....

Sat, 06/29/2013 - 14:27 | 3706203 Landrew
Landrew's picture

Bravo! This is so beyond what anyone knows. This is an experiment without the science or logic.

Sat, 06/29/2013 - 14:11 | 3706187 caimen garou
caimen garou's picture

when anyone says a number and " according to the labor department," you know crap is floating! they don't make hip boots or chest waders well enough to keep the shit out!

Sat, 06/29/2013 - 14:34 | 3706209 MsCreant
MsCreant's picture

I thought that was a Baby Ruth bar floating in there, ya don't say...

Sat, 06/29/2013 - 14:16 | 3706193 EclecticParrot
EclecticParrot's picture

Employing the count would be too easy, like fishing shoots in a barrel, so instead we unemploy the count, not directly, but by ‘participating’ the gauge, like a citizenship mark in grade school, so those speaking up, regardless of how garbled, are rewarded, while those who ‘turn on, tune in and drop out’ of the “Force” (not Star Wars, but labor pains) receive no remuneration, but help lower this measure in a cruel farce, and apparently this is one of the target’s Fed.  For this to all sense make, you’d really have to be upped-fuck completely, hence the ‘turn on … drop out”, as we all back sit and watch from afar the madness . ..

Sat, 06/29/2013 - 14:27 | 3706201 Atomizer
Atomizer's picture

The new immigration bill will provide new porn fluffer math models to make GDP look positive. That's the short term game plan.

Sat, 06/29/2013 - 14:32 | 3706207 MsCreant
MsCreant's picture

They are creating money everywhere they feel like it. There are no rules. We have to get this into our heads or there is no way forward. This is what it has come to-- all of them are cheating everywhere, all the time.

Sat, 06/29/2013 - 14:42 | 3706216 ZerOhead
ZerOhead's picture

No-one ever figured out where that 'missing' $2.3 trillion Rumsfeld divulged on Sept 10, 2001 came from... sure couldn't have been from the regular pentagon operations budget that's for sure...

Sat, 06/29/2013 - 14:55 | 3706235 Peter Pan
Peter Pan's picture

If I remember correctly, on the morning of 911 a meeting with all the records relating to the vanished funds was going to be held at the Pentagon. Strangely enough the Pentagon was hit in exactly the spot where the records were closed. I stand to be corrected but I blievethis is what happened.

Sat, 06/29/2013 - 15:35 | 3706272 Peter Pan
Peter Pan's picture

Thanks for the link but how about the destruction of records on that ill fated morning?

Also the second statement about 2.3 v 1.8 is BS as Rumsfeld did not say missingbfor the year. In any case Rumsfeld is the man who justified a war with Iraq on the basis that, "absence of proof is not proof of absence".

Then again the net is replete with instances of the army being overcharged,

Or how about the fact that there are more subcontractrs in Iraq than soldiers with very little reporting as to wht they actually do.

Sat, 06/29/2013 - 16:33 | 3706287 ZerOhead
ZerOhead's picture

Not so fast Sparky... your debunk was already debunked... and let's not forget his actual words...

“the pentagon cannot account for $2.3 trillion”
“you could say it’s a matter of life and death”  ~donald rumsfeld

Don't think mere clerical mistakes would be that difficult to rectify (after all it's a dual entry accounting system right?) paychecks are by far the biggest expenditure and they are extremely simple to tally since they are cashed at BANKS... and there would be NO impact at all if the money was not GONE rather than merely misalocated...

Did Rumsfeld say "you could say it's a matter of life and death" or not... merely having the $2.3 in the left pocket or right pocket of your trousers is n ot the same as not having the money in your trousers to begin with...

Oh... and what of the $18 billion that were on the skids in Bahgdad...

The system is atually DESIGNED to leak unaccountable and untrackable money streams...


From former Asst. Treasury Secretary Roberts...



On January 29, 2002, CBS Evening News reported that the Pentagon had lost track of $2.3 trillion, yes, $2,300 billion. Defense Secretary Rumsfeld admitted, “According to some estimates we cannot track $2.3 trillion in transactions.”  “We know it is gone,” said Jim Minnery of the Defense Finance and Accounting Service, “but we don’t know what they spent it on.”

Reported thefts from Iraq and Afghanistan reconstruction aid rival Brunei’s missing billions.  Pallets of cash stacked high have been flown out of Afghanistan in plain view. The stories of corruption and missing funds are so numerous that they are no longer reported.


Sat, 06/29/2013 - 14:48 | 3706225 StarTedStackin'
StarTedStackin''s picture

I for one am shocked that we are being lied to by the Obowel Movement.....

Sat, 06/29/2013 - 14:49 | 3706227 Peter Pan
Peter Pan's picture

No lie s greater than the number put out by the government about the number of US war casualties in Iraq. Casualties now include only those who die with their boots on the ground so if you die on the way to the hospital or in hospital you don't count as a war casualty.

Once you can lie about something as grotesque as this, any lie is possible.

People can only rely on their own personal statistics.

Sat, 06/29/2013 - 14:50 | 3706231 Payne
Payne's picture

looking at the data it seems that there is an adjustment being made to unemployment rolls.  The relationship between the 2 looks consistent but some fudge factor was added in starting in 2011.

Sat, 06/29/2013 - 14:54 | 3706232 q99x2
q99x2's picture

All things are possible with the legalization of FRAUD. You are at the mercy of the military now. Bernanke took your money and bought bullets to kill you instead of telling the truth. That's the question to ask that prick. Don't beat around the bush with some lame ass Okum's law question. Ask the fucker why he's arming the DHS with tanks, Machine guns and hollow points. Fuck you Bernanke motherfucker. And that's right Obama can't Clapper while Holdering his Bernanke. Bitchez..

Sat, 06/29/2013 - 16:31 | 3706342 ArkansasAngie
ArkansasAngie's picture

Another one of those secret laws ... eh?

Sat, 06/29/2013 - 18:14 | 3706502 bunnyswanson
bunnyswanson's picture

Secrets .... here's a secret.  These people don't give a flat fuck whether you are happy, rich or poor.  They have sent better people than you into the grave for no other reason then they were born in the wrong country.  They are murdering thieves and will not stop at anything.  Hired hit men cover the globe and are standing ready to kill on orders.  They kill presidents.  They kill journalists.  They kill the curious mind who wants to know what is really happening. 

It is their wish to remain at the top of the pyramid and nothing you can say or do wiill stop them because now they own the military.  If you think this freedom is being eroded away and your only chance is holing up on your land with your water and canned food, remember Ruby Ridge.  They "resettlement camps" are waiting for you.  When US real property and it's natural resources, including water and food, communities, business plazas is sold to investors in a foreclosure auction to pay the bank, you'll realize you did too little too late and cry out you did not realize that this would mean the end of your country.  Now, go watch that personality-less rich bitch who will do anything to keep her audience mesmerized, showing exposing her worn out naked desperate pussy for the world to see.

Sat, 06/29/2013 - 14:51 | 3706233 moneybots
moneybots's picture

"But that would be very illegal..."


There is no such thing as very illegal under the rule-of-priviledge.

Sat, 06/29/2013 - 14:52 | 3706234 involuntarilybirthed
involuntarilybirthed's picture

Nothing is illegal if it is for the greater good.  This truth will not set us free.  We can only hope "they" will figure a way out of this mess that "they" helped created.   Image the impact on the world economy if we the public overreact to this miscalculation or lie if you will?  We will enter a beans and bullets world. 

We have plenty of unemployed misfits and angry others (no fault but their own) who would  like the satisfaction of taking us to a tipping point.   

Sat, 06/29/2013 - 15:03 | 3706246 MsCreant
MsCreant's picture

I know you are trolling. But here it is any way...


If we were in the same room together, I just might slap you if I thought you were sincere.

Sat, 06/29/2013 - 15:08 | 3706250 involuntarilybirthed
involuntarilybirthed's picture

And your fix for this situation is?  


Sat, 06/29/2013 - 15:23 | 3706263 MsCreant
MsCreant's picture

Okay, you are talking to me. Cool. 

Let it fall. Announce the truth of where we are at. The world banking system is bankrupt. The books don't add up anywhere. Everyone is going to take losses. 

1. Mark assets to market.

2. Insist that all the derivatives go through a clear, common, transparent, clearing house. 

3. Every deal that was done under fraudulent conditions (I think the legal term is "Fraudulent conveyance") is null and void. That may well be most of them.

4. Everything under capitalized goes into default status, and thus bankruptcy. This will trigger margin calls everywhere.

Not telling the truth about where things are at, and letting them stay up and running under fraudulent conditions, only guarantees things will get worse and worse in the future. The market must be free of intervention. There must be failure permitted for bad ideas and success for good ideas or we will never be able to find level footing.

How is that for a start?

Sat, 06/29/2013 - 15:52 | 3706283 Peter Pan
Peter Pan's picture

May I add that every financial institution install a black box through which every computer transaction is recorded.

Sat, 06/29/2013 - 16:38 | 3706349 logically possible
logically possible's picture

Kind of like an electronic voting machine.  HA HA, your hilarious.

Sat, 06/29/2013 - 18:00 | 3706484 ZerOhead
ZerOhead's picture

NSA has that covered already...

Sat, 06/29/2013 - 15:57 | 3706286 Peter Pan
Peter Pan's picture

One more thing. Everywhere there are huge pockets of negative equity and to liquidate them bcause of this woud take down much of the healthy parts of the system.

I propose that the first step be the elimination of anything that is not cash flow positive.

Sat, 06/29/2013 - 16:33 | 3706340 involuntarilybirthed
involuntarilybirthed's picture

A good start and I mostly agree, but, we can do nothing to quickly.  Actually, "we" can do little.   We are asking those that made the mess to correct it.  It is futile to think we can change Congress, the Treasury, Fed, IMF, World Bank, BIS, SEC, world players like China, India, UK, Germany, EU total, Russia,  and and all the other entities.  We are stuck with them and the system they have built, it's global.  There is little choice in that matter.  Our voting power controls only a small part of that pie.  It took time to get into this and it will take time to get out of it smoothly.  Like hitting your brakes too hard in an emergency when you need to concetrate on steering first. Let's not collaspe our way of life because we allowed/trusted this system to gain control of us.  They (above) know what conditions we are in and they too fall if it all collaspes.  We can only encourage/pressure them to do what is necessary.  Unfortuantely, they all don't agree or have the same agenda.  The  US must play a ruthless game to keep up or it could get much worse.  I don't have the answers but we must avoid turning over the apple cart that feeds our families. 

#1.   agree   in some sequenced/priority way. not all at once.

# 2.   Totally agree

# 3.   The system that let them do fraudulent stuff needs fixed first.  Once that is identified and fixed then we go for it.  Our courts are not large enough to handle all of it

#4.     Set some time limits here and good oversite and then if a fair level of capitalization is not reached or improved in a certain time then good, bankrupt with investors taking the hit.  They could go so far as having to post their level of capitalization on the entrance door so people can decide and take responsiblity for their choices.

It would take little for national riots (by those I mention) to send us over the edge.  Cool heads should prevail. It's that bad in my view. We don't need all the truth, but enough to remove the culprits,  we need solutions. 

Sun, 06/30/2013 - 04:39 | 3707282 SilverSavant
SilverSavant's picture

#3.    That's okay, we have Guantanamo to hold them until they get a trial and then we part them out to pay their debt to society. 

Sat, 06/29/2013 - 16:42 | 3706354 Totentänzerlied
Totentänzerlied's picture

"How is that for a start?"

Naive, obscurantist, and categorically impossible.

For starters, you use verbs ("announce" "insist" "is" "goes" "telling" "letting" "permitted") without any explicit subject. You haven't just used the passive authorial voice for convenience, you've used it because you don't want to name the subject of all these verbs: the government, the entity most responsible for the existence of the conditions you are suggesting they rectify...

This is nothing but a sheepish appeal for better treatment by the shepherd. It simply does not work that way.

Sun, 06/30/2013 - 08:07 | 3707403 overmedicatedun...
overmedicatedundersexed's picture

look, crime is taking what is not "your own wealth"..who does this most effectively? .gov

crime is based on lies, blackmail,bribes..why would any system based on corruption produce anything but corrupt data?

.gov may as some post here be trying to soften the economic reality, but it is in truth keeping those in power and at the top of the crime business going. no one in .gov can tell any truth as the system is at it's core corrupt and hemlock in one form or another is served to those who try.

Sat, 06/29/2013 - 15:04 | 3706237 timbo_em
timbo_em's picture

The same "mystery" can be seen when comparing GDP and unemployment for the UK and Spain. Since Lehman, the GDP of those countries shrank by virtually the same percentage, yet unemployment in the UK is somewhere around 8 percent when in Spain it's north of 27 percent.

Sat, 06/29/2013 - 14:57 | 3706240 buzzsaw99
buzzsaw99's picture

The lying ue numbers don't agree with the lying gdp numbers? Shocking!

Sat, 06/29/2013 - 15:03 | 3706247 moneybots
moneybots's picture

" Conyers was reminded of how they murdered other Congressmen, particularly Sonny Bono on the same Committee."


Bono ran into a tree while skiing.

Sat, 06/29/2013 - 15:18 | 3706260 lakecity55
lakecity55's picture

USA. Stick a fork in it. It's Done.

Sat, 06/29/2013 - 15:22 | 3706262 smacker
smacker's picture


A major contributory factor for why economies are in such a mess with wrong corrective actions being taken to fix the wrong problems, look no further than Official Government Statistics. They have been manipulated and corrupted for decades and are at the root of all evil, but loved so much by the ruling elites to fool us (and themselves) into believing that they're following the right policies.

GDP has not been reporting true economic growth for decades, CPI does not report true price inflation and unemployment figures do not report ...erm... true unemployment. It is all part of The Matrix that's been created by the ruling elites to hide the simple truth that they alone are responsible for economic management but have made a complete dog's breakfast of it which has brought the global economies to ruin.

The giant credit/debt bubble that burst 2007-8 was a direct consequence of political slimeballs trying to give the false impression of healthy economic growth, whereas it was entirely based upon debt and a lot of misallocation of investment. BOOM.

How can you have a central bank with responsibility for maintaining CPI at (say) 2% when the government's own CPI figures are pure and utter nonsense? The consequence of such a fantasy is that interest rates are always wrong.

Anybody running any business knows that without accurate and timely data on business performance, it is hopeless trying to plan anything, yet our political slimeballs merrily plan a whole nation's future economy/society and public investment on the basis of garbage numbers that they themselves produce.

If it were not so serious, it would be hilarious.

As a guy said today on "it's time we took government out of economic management". Exactly so.

Then let's take them out of education. Then let's take them out of lawmaking. Quite soon we'll have government left to deal with the things it's good at: NOTHING.

Sat, 06/29/2013 - 17:02 | 3706384 Totentänzerlied
Totentänzerlied's picture

" "it's time we took government out of economic management"."

Who is this "we"? How does the author propose "we" do what he suggests? Is he so stupid as to believe that, contrary to the entire history of human civilization (of which I know only a single exception lasting only a few years and involving no more than a few hundred persons, during the American Colonial period), it is possible for a government to simultaneously exist and NOT interfere with its nation's economy?

Because apparently it still is not obvious to some (not necessarily you): The nature of a government, a group of people which a larger populace permits, through active acceptance and/or passive accession, to possess a forceful monopoly on law and a legal monopoly on force, necessarily gives such a group the power to manipulate the economy both legally and forcefully. A government, if it exists, cannot, regardless of the specific characters and actions of its leaders, help but interfere with the economy in which it exists, and the economy is essentially powerless, excepting that the wealthy will always attempt to and often succeed in manipulating the government to their ends, and the non-wealthy, if permitted, will of course do the same, though they will never be successful, contrary to the populist delusions of orthodox Marxism, socialism, democratism, liberalism, etc.

Abridged version: How do you have an unmanipulated economy when you permit to exist an entity upon which the only concrete limits are, in the final analysis, purely logistical.

Sat, 06/29/2013 - 18:32 | 3706535 smacker
smacker's picture

Who is this "we"? How does the author propose "we" do what he suggests

Dunno, I was only paraphrasing him. I should not have used " ". Check out and watch the latest episode of 'Breaking The Set'. That's where I saw him.

Generally, he was advocating that government should butt out of many things it's currently involved in.

Sat, 06/29/2013 - 15:23 | 3706264 gatorengineer
gatorengineer's picture

even I know they changed how GDP is calculated.  Come on Tyler

Sat, 06/29/2013 - 15:32 | 3706270 kennard
kennard's picture

Looking at Tylers' chart, the deviation from Okun's law, along with the implied negative output gap, has been growing since 2004, interrupted for two or three quarters by the 2008-2009 crisis. This coincides with higher rates of money printing in its various guises.

How do we explain tax receipts that are far too high in relation to unemployment rates, labor force participation rates, hours worked and evidence of lower job quality?

Perhaps receipts are being mis-characterized: Treasury sales, for example.

Sat, 06/29/2013 - 15:47 | 3706277 Seasmoke
Seasmoke's picture

things are so bad.......they stop even trying to hide the theft.......NOW THATS BAD !!

Sat, 06/29/2013 - 15:48 | 3706278 ThirdCoastSurfer
ThirdCoastSurfer's picture

I just want to know why everyone says, including Zerohedge, that it takes a minimum of 200k new jobs a month just to absorb the birthrate, and yet 6 years later, we have only crossed this threshold on less than a dozen occasions and nothing seems to have changed? The only explination I have is that there are no longer 11 million illegal immigrants but reduced by a number that matched the birthrate and the jobs they once occupied have been absorbed.

Sun, 06/30/2013 - 08:07 | 3707400 Absinthe Minded
Absinthe Minded's picture

It's funny, I remember back in 2009 they told us we needed 350,000+ new jobs a month to recover. Now it's only 250,000 jobs a month needed? So either our population is declining or their lowering their expectations. So much spin and lies, it makes me sick. My company is in building materials and we are off about 40% on sales for the last 2 months and they don't understand what's going on. They don't realize this housing recovery is smoke and mirrors and when interest rates rise forget it, the only buyers will be rich Russians and Chinese. There winning the war without firing a shot and we're turning into the spying weasels just to get an inside edge. Thieving pieces of shit.

Sat, 06/29/2013 - 16:33 | 3706344 Poor Grogman
Poor Grogman's picture

Zombies should be forced into helping the economy more by getting themselves into more consumer debt for new clothes, dental work, and haircuts.

I would like to see the government put forward a bill for Increased zombie welfare payments, it seems only fair, that those who are only half dead / half alive should at least enjoy a bit of the good life too.

The money for this modest program could come out of borrowings and be paid back by increased tax revenue in the future.

Sat, 06/29/2013 - 18:24 | 3706518 smacker
smacker's picture

Sounds like you wanna live in a socialist paradise.

Sat, 06/29/2013 - 17:00 | 3706378 sasebo
sasebo's picture

Makes me think of the old wild west potion salesman selling from the back of a wagon. One day he decided to try to sell some rabbit pellets (aka rabbit shit) as "smart pills" to make a few bucks.

Then one day a customer came back & said "hey man, these pills you're selling taste just like rabbit shit". The old potion guy replied, "see they're working --- you're getting smart"

Sat, 06/29/2013 - 17:19 | 3706410 neutrinoman
neutrinoman's picture

Part of the gap, no doubt, is due to the falling labor force participation rate. If the labor force participation rate were the same now as it was in December 2007, the U3 unemployment rate would be roughly 9%. Most of the drop from October 2009 to now is due to declining participation, not new jobs. (And only about a third of that decline is due to retirements.)

There is also the problem of seasonal corrections, some of which are not "seasonal" (in the sense of being season-dependent with a net effect of zero over a year). Part of the seasonal correction is cumulative, or secular, not cyclical. That distortion comes from the great impact on the time series from the period December 2007-May 2010, the period of non-hiring and layoffs associated with the Great Recession. Every winter-spring is now affected by this effect, raising the adjusted monthly new jobs number by 20,000 to 40,000 (at this point in the cycle). Over four years, that's about 1M too many new jobs.

It's unlikely that the GDP numbers are distorted in the same way, because they are not calculated by the same people in the same way. There's no "birth-death" model. And the GDP seasonal adjustments are far closer to purely cyclical (over a year, netting to close to zero).

Somewhere in here, between the falling participation rate and the distortions of the BLS' current way of calculating unemployment, is the answer. It's probably most of that gap.

(Correction: The annualized real growth rate of the US economy since the end of the recession in June 2009 has been about 2.0%. Don't know where that 2.5% number is coming from, but it can't be right. Real growth was less than that every year starting with 2010.)

Sat, 06/29/2013 - 18:19 | 3706509 neutrinoman
neutrinoman's picture

I should add one big caveat to my assertion about real GDP, and that is the effect of inflation. It's no doubt being underestimated. Real GDP growth is probably somewhere between 1% and 2% since the recession ended.

My real point with regard to the jobs numbers is that a small but persistent positive error in monthly jobs numbers, cumulated over four years, can give rise to ~ 1/4 or 1/3% positive error in the unemployment rate drop. That's enough to explain the whole discrepancy. An error as small as 10,000 jobs a month, for 48 months, is enough = 1/2 millions jobs cumulative = 1/3 % of workforce.

My suspicion is that both the real growth rate and the job creation have been inflated, perhaps by bad methods, perhaps by direct number-fudging. (And the bad methods themselves have a political aspect to them.) We're probably overestimating real growth by 1/3-1/2% and cumulative job creation in the recovery by 1/2 million or more. There were fudging and embarrassing incidents with bad methods in the 1990s and 2000s, before 2008. But the effects in those days were smaller and not so cumulative.

(What I wrote about labor force participation rate actually has no direct bearing on Okun's Law. All that matters is the labor force, and the relative proportions of employed and unemployed in that labor force. The total adult working-age population is irrelevant.)

Sat, 06/29/2013 - 17:58 | 3706480 Bazza McKenzie
Bazza McKenzie's picture

Just trying to reconcile one set of lies with another set of lies.

Sat, 06/29/2013 - 18:41 | 3706555 NOTaREALmerican
NOTaREALmerican's picture

What about the under-ground / off-the-books economy?

What if that is much bigger than "is assumed"? 

Sat, 06/29/2013 - 18:53 | 3706576 rosiescenario
rosiescenario's picture

Just think of how much larger the unemployment numbers would be if it were not for our Federal government's hiring many totally unemployable morons are now earning a good living at HomeLand Sekurity?

Sat, 06/29/2013 - 19:00 | 3706592 Nid
Nid's picture

The Douche Fucks who appear each and every day on the "financial news" airwaves have adopted a Narrative in which QE is considered an acceptable and valid policy instead of recognizing it for the abomination that it is. This is precisely why everyone is so "befuddled" by the Fed's actions. If the mandate is Inflation control and Employment (btw, when did that happen? Wasn't the mandate simply "price stability"?), neither of which indicate anything other than a economy in the tank, then why would the Fed even mention the possibility of "tapering" any time in the foreseeable future? Why? Because the Fed itself realizes its policy is an abomination and they're scared shitless of what they've created. For this reason, the Fed wants its foot off the gas but it cannot speak the reason out loud for it would indict itself. So instead we hear a bunch of bullshit double speak about waning of risk and green fucking shoots, intermingled with claims of zero inflation risk "stubbornly" high unemployment...and of course the "puzzle" that is the bond market. And of course, the aforementioned douche fucks scurry around trying to spin the Feds web of deceit in any way that might make stawks go up.

Sat, 06/29/2013 - 20:36 | 3706771 My Days Are Get...
My Days Are Getting Fewer's picture
First, I agree that the employment data is forged and, realistically, we have 15% minimum unemployment.  Factor in the part-timers and underemployed, we have probably 25% of our work force in the USA idle - not doing any productive work for any meaningful wages.    That having been said, take a look at what Okun's Law is all about:    In 1962, Okun decreed that for every 1% the unemployment rate rises, the GDP falls  by 2%.'s_law   I was alive in 1962 - a viral young man of 19. That law may have made sense back then.  There were no copying machines - the secretaries typed one original + 8 carbons.  There were few robots welding car assemblies together.  There were no automated - computer driven metal lathes (CNC machines).  Machinists with calipers and micrometers had to measure everything.  We had steel mills and coking plants and other heavy industry, belching out smoke and paying out damn good wages for those willing to work overtime.
  It is 2013 - 51 years later.  All of those jobs are gone.  Okun died in 1980.  You can see him here smoking his pipe at Yale, penning his misery index.   Let's not write about Okun any more.  The simple truth is that there are not enough jobs to go around in 2013.  High unemployment is embedded - like permanent.  The only thing that will change that fact is if the Government decides to start sending $82 billion per month directly into the economy, instead of to the banks to prop up the failed shadow banking system.  


Sat, 06/29/2013 - 21:00 | 3706810 GreatUncle
GreatUncle's picture

Some of the debt today, never paid off in full is the debt from the 60's 70's etc. etc. and without the shadow banking sovereigns would have defaulted years ago. The shadow banking was just a way to hide the real level of growing debt in nations. What we have today is a shadow banking system that can no longer hide debt, a central bank forced to CTL-P billions and banks themselves that with no money are kind of broke.


This is far older than the 60's, reckon turn of the 1900's, as the implementation of motorised machines vastly increased the output per person like 100Hp on a vehicles is 100 horses / 4 = 25 men working at a far slower rate. We have just become even more efficient since then = automation = needing little to no human input anymore.


If the first point is true, then all sovereign debts are unpayable and then it gets ugly. You have two choices bust or declare debt forgiveness. Both would be equally chaotic.


Got to keep going then

Sat, 06/29/2013 - 21:56 | 3706902 My Days Are Get...
My Days Are Getting Fewer's picture

You are correct - we need little to no human input anymore.

How many employment-worthy people will:


I lay down and die


Take up the revolution - no matter how suicidal the effort may be


Live off of the state


Forge a good life out of nothing, using their God-given talents.

"When the going gets tough, the tough get going."

I leave the rest of humanity to their chosen fate.

Sun, 06/30/2013 - 07:48 | 3707387 overmedicatedun...
overmedicatedundersexed's picture

 My Days posts :"The simple truth is that there are not enough jobs to go around in 2013.  High unemployment is embedded - like permanent"

Seems the Senate of the USSA, thinks diff...and has voted for expanded work visas and millions of illegals coming to work in all of those jobs, that are not here??

one ponders the dicotomy? why do we need to import labor?? while food stamps are at all time highs..why does washington see millions of jobs in USSA while our working poor see NONE??

Sat, 06/29/2013 - 20:47 | 3706787 GreatUncle
GreatUncle's picture

"either the unemployment data is very much wrong and the real unemployment rate is far higher"


There is an earlier point also, "have you really created all these extra work hours in the economy"? If not and employment falls it is only part time work that in many cases provides just a sustainble existence = no future.


This bit unravels eventually, even if the FED tapers today (more like masks the QE once more in the leverage on loans) it comes back later when a large number of people have not earned excess today to stash away for the future. Other than that "the inflation in the future will be massive" to create money through the leverage on loans and deflate the debt. They have no other choice.


On that the USA will eventually be a socialist nation on the grounds economically you will use QE or leverage on loans to socialise the problem of not having enough work. Already like us, you cannot tell the difference between polticcal parties because of it.


The grey party.

Sat, 06/29/2013 - 20:50 | 3706792 MrBoompi
MrBoompi's picture

Is there anyone here who has believed the unemployment numbers the BLS publishes fr at least the last 5 years? Does anyone look at Shadowstats?

Sat, 06/29/2013 - 21:40 | 3706871 jpc578
jpc578's picture

A BLS publication from 2007 projected the LFPR to be 65.5% in 2016, down from 66.2% from 2006. Of course the BLS now reports that the LFPR is at 63.4%. A straight line decline from 66.2% to 65.5% from 2006 to 2016 would put the LFPR at about 65.7% today. This would yield a U3 unemployment rate of 10.7% or 3.1 percentage points above where it is today. As for the tax data, how much of the increase is a result of the expiration of the payroll tax holiday?

Sat, 06/29/2013 - 22:13 | 3706940 Elliptico
Elliptico's picture

It is not a Law.  It is an observation.  It likely seemed to apply under certain conditions.  Change the conditions, and what may have been a coincidental correlation is severed.  Not to say that the gubbermint data is not bogus, but using Okun's musings to dispute it is like claiming that Sarah Palin would be a great president because she has nice legs.  First, there is no real cause and effect.  And second, she may have had nice legs, but time and the ravages of too much sun march on.

Sun, 06/30/2013 - 09:03 | 3707444 paint it red ca...
paint it red call it hell's picture

COSTELLO: I want to talk about the unemployment rate in America .
ABBOTT: Good Subject. Terrible Times. It’s 9%.
COSTELLO: That many people are out of work?
ABBOTT: No, that’s 16%.
COSTELLO: You just said 9%.
ABBOTT: 9% Unemployed.
COSTELLO: Right 9% out of work.
ABBOTT: No, that’s 16%.
COSTELLO: Okay, so it’s 16% unemployed.
ABBOTT: No, that’s 9% .
COSTELLO: WAIT A MINUTE. Is it 9% or 16%?
ABBOTT: 9% are unemployed. 16% are out of work.
COSTELLO: IF you are out of work you are unemployed.
ABBOTT: No, you can’t count the "Out of Work" as the unemployed. You have to look for work to be unemployed.
ABBOTT: No, you miss my point.
COSTELLO: What point?
ABBOTT: Someone who doesn’t look for work, can’t be counted with those who look for work. It wouldn’t be fair.
COSTELLO: To whom?
ABBOTT: The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you’re off the unemployment rolls, that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don’t look for work?
ABBOTT: Absolutely it goes down. That’s how you get to 9%. Otherwise it would be 16%. You don’t want to read about 16% unemployment, do ya?
COSTELLO: That would be frightening.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.
ABBOTT: Now you’re thinking like an economist.
COSTELLO: I don’t even know what the hell I just said!
ABBOTT: Now you’re thinking like a politician.

-author unknown- but thanks for the giggle

Sun, 06/30/2013 - 14:12 | 3707970 Handful of Dust
Handful of Dust's picture

Great article...Thanks!

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