Friday, February 28, 2014

Economics: Cooking The Books

The government has "unexpectedly" revised its numbers for Q4 2013 growth from 3.2% to 2.4%, a 25% reduction. This is not an adjustment. When you're off by this much is't evidence of fraud at fairly high levels.

The upshot of this is that 2013 growth is now 1.9%. Folks, this isn't growth, this is wheezing on life support. This also goes along with increasingly rosy unemployment numbers, steadily declining as a result of people simply dropping out of the market. If you've given up looking, you're not unemployed.

Amusingly, the anemic performance is being blamed on the weather. For those of you old enough to remember, or who had a good history teacher, the Soviet Union used to consistently fail to meet its quotas for agricultural production beginning with the collectivization of agriculture and continuing through the ultimate collapse of the system. This was always blamed on "bad weather" to the point that wags in the west began extrapolating that the Soviet scientists were successfully experimenting with weather modification to be used as a weapon against the west. The problem seemed to be that the tests were conducted inside the Soviet Union to maintain secrecy and as a result only damaged farms there.

In the 50's we didn't have the internet. It's place was taken by publications like the Weekly World News, the National Enquirer, and pamphlets distributed by the John Birch Society. Look at the improvements we've made in 60 years: Today economic failure is still blamed on bad weather, but the bad weather is now blamed on capitalists instead of Russian scientists.

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