Meet the Economist Who Says the Government's Economic Numbers Are Lies

[marmar]

via AlterNet:



East Bay Express / By Chris Thompson

Meet the Economist Who Says the Government's Economic Numbers Are Lies
Establishment economists think John Williams' numbers are off. But then, most of them also thought the economy was healthy.

May 8, 2010 |


John Williams lives in a one-bedroom Oakland apartment just a few blocks behind the Grand Lake Theater. He doesn't like to talk about politics, and he certainly doesn't like to talk about the stock market. He's sixty years old and has a two-man operation: a webmaster and himself. But in the obscure corners of the Internet, he's an unlikely legend, an economist who publishes a newsletter that purports to tell the real truth about the state of the nation's health. His thesis is both simple and surprisingly complex: over the course of thirty years, Washington politicians have pressured federal economists to tweak the methods by which they assess key metrics of the economy, to inflate the numbers and protect the incumbents from voters who would surely rise up in anger, if only they knew the truth.

And the truth, Williams claims, is that the economy has always performed much more poorly than the federal numbers indicate. Prices are higher, fewer people are working, and the economy is growing at a much slower pace. Even now, when the nation faces its greatest crisis since the Great Depression, the real dimensions of the disaster are still being obscured by gimmicks. It's a message that has earned him an odd bit of notoriety, to the clear frustration of some of the country's most prominent economists, who claim that Williams has built a career misrepresenting complex mathematical models and spreading panic.

Take February, for example. What does Williams think was the true state of the economy? The official unemployment rate was listed at 9.7 percent, but according to Williams' models, the real number, including part-time employees and workers who have just given up in despair, is closer to a staggering 21.6 percent. The official February inflation rate was 2.1 percent; Williams argues that it's really around 5.5 percent. And GDP for the fourth quarter of 2009 was not 5.9 percent, as the government claims, but 2.9 percent.

Williams says he's just using math to tell you what you already know — that your economic life, and that of your friends, is much worse than the government's numbers say. Everywhere you go, you can feel it. The NUMMI plant shutting down. Foreclosed homes rotting on your block, or being auctioned off on the courthouse steps. The anxiety in the eyes of passers-by. Times are tough. ............(more)

The complete piece is at: http://www.alternet.org/economy/146784/meet_the_economist_who_says_the_government%27s_economic_numbers_are_lies

[fasttense]

1. Thanks for posting. John Williams is very informative and makes sense. n/t

[whattheidonot]

6. gave up looking.

Look at the latest unemployment numbers. Jobs were added but because some , some of the discouraged, (what a great word for stopping to look for jobs. Nothing like 10 No's to make you start wondering if you have had it.) did look again the actual unemployment rate went up. Imagine the number of still discouraged that have not looked. Then the next phase is desperation where you take the $8.00 an hour, ride the bus, eat macaroni, and wonder what is the matter with you. the matter is there are thousands waiting to take your job and that is how you are treated. I am now doing Census work. About a week of that you start losing it, especially in this economy and these circumstances. You can imagine the level of happy response.

[Lerkfish]

2. kick

[leveymg]

3. People generally don't get rich by telling the unbiased truth.

But, organizations generally don't survive if there is no reality upon which decision-makers can base their choices. Hence, Mr William's unemployment/underemployment numbers correspond with the BLS U6 indicator. Of course, TV news gives you the prettified U3, the version that's dumbed down for mass consumption. If you dig through the tables and datasets, and know where to look, even the Labor Dept. and Federal Reserve reports give you a reasonably accurate picture of what's going on.

[LiberalLoner]

4. Wow. Well worth reading. n/t

[chill_wind]

5. K & R.

Now, of course, Roubini and Schiff look like geniuses, or at least right. But for years, the smartest guys in the room rolled their eyes and chuckled at the mention of them. In hindsight, our boundless American optimism clearly got us into this mess, as we told ourselves we could always amortize the consequences of our overconsumption, spending, and debt. But so did our experts. The men and women who we trusted to know better, who dazzled us with their jargon and numbers, harvested billions while the world crumbled.

[The Northerner]

7. K&R

Definitely worth a read.

[Uncle Joe]

8. This was an excellent article until the last page, then it turned in to a piss poor, cheap shot

propaganda piece.

It's too bad they screwed up an otherwise helpful and informative column with that B.S.

"Everywhere you look in America, you can see the erosion of public confidence in our foundational institutions. The media took its hit long ago, of course. But scientists are now widely derided as cooking climate numbers. Congress now has the lowest approval numbers in history. Bankers, once the dullest and most dependable citizens of the republic, are hiding in the Hamptons until the rage dies down."

If Williams is speaking the truth; part of which I agree with and/or some of his critics have a point, those arguments; which the nation needs to hear were well laid, what a shame the ultimate message regarding the environment was polluted at the end.

Thanks for the thread, marmar.

P.S. I was ready to recommend and even bookmark this thread up until that point.:(

[girl gone mad]

9. I think you are misinterpreting that sentence.

I read it as the author asserting a fact, not making a judgment on the legitimacy or illegitimacy of climate science.

Rightly or wrongly, scientists are now widely derided as cooking climate numbers, and it is an example of the erosion of public confidence in our foundational institutions.

[Uncle Joe]

10. I read it as a distorted fact, along the lines of "some people think" therefor it is.

What is "widely derided," by whom and are those people correct in their derision?

Furthermore does the ending of this column contribute to that supposed perception or clarify it?

Does the majority of people still believe the scientists are correct on the issue of global warming climate change?

I believe they do.

I also believe a mountain was made out of a mole hill via propaganda funded by the fossil fuel industry; and I believe this otherwise enlightening article joined in with them.

[mike_c]

11. I read that completely differently....

What I read was that institutional lying and propaganda have created a situation where people don't have anyone left to believe, to have faith in. In that atmosphere, even the science underlying climate change becomes difficult to accept.

I think it was just a tossed off remark to illustrate the larger problem he alludes to in the previous sentence.

[glowing]

14. I agree.. that's how I read it.

[Uncle Joe]

16. This was a good column when it focused on the economic debate outsiders vs institution, but when

the author threw that last paragraph out there in effect lumping those institutions together, that was a disservice to the reader.

He sets up a frame with the economic argument; which I thought was informative and had a fair degree of integrity but on page 10 with this paragraph, I don't see clarification with his examples, just surreptitious obfuscation and perpetuation.

That paragraph wasn't necessary in making a sound economic or institutional point in particular by lumping in what I view as victims with the villains. Scientists have been in virtual total agreement regarding the reality of global warming climate change for decades and yet the corporate media have for too long treated this issue as if there was a serious debate.

What if he said some people have lost confidence in the institution of the Presidency because they don't believe Obama was born in the U.S.? Would people have viewed that as a tossed off remark?

With that sentence whether intentional or not I see this piece as subliminally picking up the corporate media propaganda mantle.

"Everywhere you look in America, you can see the erosion of public confidence in our foundational institutions. The media took its hit long ago, of course. But scientists are now widely derided as cooking climate numbers. Congress now has the lowest approval numbers in history. Bankers, once the dullest and most dependable citizens of the republic, are hiding in the Hamptons until the rage dies down."

[OhioChick]

12. K&R n/t

[skepticscott]

13. So is the assumption here

that John Williams is the only honest and competent economist in the entire country, and that all of the rest are either idiots or part of the conspiracy?

[Kip Humphrey]

15. I've followed John William's work for years and not only have saved my retirement

but have made money during this Great Recession.