Every time
the mainstream media touts some “wonderful new economic numbers” I just want to
cringe. Yes, it is true that the economic numbers have gotten slightly
better since Donald Trump entered the White House, but the rosy economic
picture that the mainstream media is constantly painting for all of us is
completely absurd.
As you are
about to see, if honest numbers were being used all of our major economic
numbers would be absolutely terrible. Of course we can hope
for a major economic turnaround for America under Donald Trump, but we
certainly are not there yet. Economist John Williams of shadowstats.com has
been tracking what our key economic numbers would look like if honest numbers
were being used for many years, and he has gained a sterling reputation for
being accurate. And according to him, it looks like the U.S. economy has
been in a recession and/or depression for a very long time.
Let’s
start by talking about unemployment.
We
are being told that the unemployment rate in the United States is currently
“3.8 percent”, which would be the lowest that it has been “in nearly 50 years”.
To support
this claim, the mainstream media endlessly runs articles declaring how
wonderful everything is. For example, the following is from a recent New
York Times article entitled “We Ran Out of Words to Describe How Good the Jobs Numbers Are”…
The real question in
analyzing the May jobs numbers released Friday is whether
there are enough synonyms for “good” in an online thesaurus to describe them
adequately.
So,
for example, “splendid” and “excellent” fit the bill. Those are the kinds of
terms that are appropriate when the United States economy adds 223,000 jobs in
a month, despite being nine years into an expansion, and when the unemployment
rate falls to 3.8 percent, a new 18-year low.
Doesn’t
that sound great?
It
would be great, if the numbers that they were using were honest.
The truth,
of course, is that the percentage of the population that is employed has barely
budged since the depths of the last recession. According to John Williams, if
honest numbers were being used the unemployment rate would actually be 21.5 percent today.
So what is
the reason for the gaping disparity?
As I have
explained repeatedly, the government has simply been moving people from the “officially
unemployed” category to the “not in the labor force” category for many, many
years.
If we use
the government’s own numbers, there are nearly 102 million working age Americans that do not have
a job right now. That is higher than it was at any point during the last
recession.
We
are being conned. I have a friend down in south Idaho that is a highly
trained software engineer that has been out of work for two years.
If the
unemployment rate is really “3.8 percent”, why can’t he find a decent job?
By the way,
if you live in the Boise area and you know of an opening for a quality software
engineer, please let me know and I will get the information to him.
Next,
let’s talk about inflation.
According
to Williams, the way inflation has been calculated in this country has been
repeatedly changed over the decades…
Williams
argues that U.S. statistical agencies overestimate GDP data by underestimating
the inflation deflator they use in the calculation.
Manipulating the inflation
rate, Williams argues in Public Comment on Inflation Measurement , also
enables the US government to pay out pensioners less than they were promised,
by fudging cost of living adjustments.
This
manipulation has ironically taken place quite openly over decades, as
successive Republican and Democratic administrations made “improvements” in the
way they calculated the data.
If
inflation was still calculated the way that it was in 1990, the inflation rate
would be 6 percent today instead of about 3 percent.
And
if inflation was still calculated the way that it was in 1980, the inflation
rate would be about 10 percent today.
Doesn’t
that “feel” more accurate to you? We have all seen how prices for housing,
food and health care have soared in recent years.
After examining what has happened in your own life, do you believe that the
official inflation rates of “2 percent” and “3 percent” that we have been given
in recent years are anywhere near accurate?
Because
inflation is massively understated, that has a tremendous effect on our GDP
numbers as well.
If accurate
inflation numbers were being used, we would still be in a recession right now.
In
fact, John Williams insists that we would still be in a recession that started
back in 2004.
And without
a doubt, a whole host of other more independent indicators point in that
direction too. The following comes from an excellent piece by Peter Diekmeyer…
Williams’ findings, while
controversial, corroborate a variety of other data points. Median wage gains have
been stagnant for decades. The U.S. labour force participation rate remains at
multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is
in a depression.
Another
clue is to evaluate the U.S. economy just as economists would a third world
nation whose data they don’t trust. They do this by resorting to figures that
are hard to fudge.
There,
too, by a variety of measures—ranging from petroleum consumption to consumer
goods production to the Cass Freight Index—the U.S. economy appears to have not
grown much, if at all, since the turn of the millennium.
In
the end, all that any of us really need to do is to just open our eyes and look
at what is happening all around us. We are on pace for the
worst year for retail store closings in American history, and this “retail apocalypse” is
hitting rural areas harder than anywhere else…
This
city’s Target store is gone.
So
is Kmart, MC Sports, JCPenney, Vanity and soon Herberger’s, a department store.
“The
mall is pretty sad,” says Amanda Cain, a teacher and mother. “Once Herberger’s
closes, we’ll have no anchors.”
About
two-thirds of Ottumwa’s Quincy Place Mall will be empty with Herberger’s loss.
Of
course it isn’t just the U.S. economy that is troubled either.
We are
living in the terminal phase of the greatest debt bubble in global history,
many nations around the globe are already experiencing a very deep economic
downturn, and our planet is literally in the process of dying.
So please
don’t believe the hype.
Yes,
we definitely hope that things will get better, but the truth is that things
have not been “good” for the U.S. economy for a very, very long time.