On August 17, Bloomberg
reported a US government release that industrial production rose twice as much
as forecast, climbing 1 percent. Bloomberg interpreted this to mean that
"increased business investment is propelling the gains in manufacturing, which
accounts for 11 percent of the world's largest economy."
The stock market
Let's look at this through
the lens of statistician John Williams of shadowstats.com. Williams reports that "the
primary driver of a 1.0% monthly gain in seasonally-adjusted July industrial
production" was "warped seasonal factors" caused by "the irregular patterns in
U.S. auto production in the last two years." Industrial production "shrank by
1.0% before seasonal adjustments."
If the government and
Bloomberg had announced that industrial production fell by 1.0% in July, would
the stock market have risen 104 points on August 17?
Notice that Bloomberg
reports that manufacturing accounts for 11 percent of the US economy. I remember
when manufacturing accounted for 18% of the US economy. The decline of 39% is
due to jobs offshoring.
Think about that. Wall
Street and shareholders and executives of transnational corporations have made
billions by moving 39% of US manufacturing offshore to boost the GDP and
employment of foreign countries, such as China, while impoverishing their former
American work force. Congress and the economics profession have cheered this on
as "the New Economy."
Bought-and-paid-for-economists told us that "the new economy" would make
us all rich, and so did the financial press. We were well rid, they claimed, of
the "old" industries and manufactures, the departure of which destroyed the tax
base of so many American cities and states and the livelihood of millions of
bought-and-paid-for-economists got all the media forums for a decade. While they
lied, the US economy died.
Now, back to statistical
deception. On August 17, the census Bureau reported a small gain in July 2010
residential construction housing starts. More hope orchestrated. In fact, the
"gain," as John Williams reports, was due to a large downward revision" in
June's reporting. The reported July "gain" would "have been a contraction"
without the downward revision in June's "gain."
So, the overestimate of
June housing not only made June look good, but also the downward correction of
the June number makes July look good, because starts rose above the corrected
June number. The same manipulation is likely to happen again next
If the government will lie
to you about Iraqi weapons of mass production, Iranian nukes, and 9/11, why
won't they lie to you about the economy?
We now have an all-time
high of Americans on food stamps, 40.8 million people, about 14% of the
population. By next year the government estimates that food stamp dependency
will rise to 43 million Americans. So last week Congress cut food stamp
benefits. Let them eat cake.
Wherever one looks -- food
stamps, home foreclosures, bankrupted states, mounting joblessness -- the
message to long-suffering Americans from "their government" is the same: go eat
cake, while we fight wars for Israel that enrich the military/security complex,
and while we bail out banksters whose annual incomes are in the tens of millions
of dollars and up.
It is impossible to get
any truth out of the US government about anything. If private companies used US
government accounting, the executives would be prosecuted, convicted, and
"Our government" is
committed to fighting wars to enrich the military/security complex and Israel's
territorial expansion at the expense of cuts in Social Security and Medicare.
most members of Congress, especially Republicans, want to do is to pay for the
pointless wars by cutting Social Security and Medicare.
When they worry about the
deficit, it is usually Social Security and Medicare -- so-called "entitlements"
that are in the crosshairs.
You don't have to be smart
to see that Wall Street's and the government's response to the amazing US budget
deficit is not to stop the senseless wars and bailouts of mega-millionaires, but
to cut "entitlements."
I will end this column on
unemployment. "Our government" tells us that the unemployment rate is just
under 10 percent, a figure that would have wrecked any post-Great Depression
administration. But, again, "our government" is lying. The reported unemployment
rate is just below 10% because the US government no longer, since the corrupt
Clinton administration, counts Americans who have been unemployed for longer
than one year. Once the unemployed hit one year and one day, they are dropped
from the unemployment roles and no longer counted as
Compare this fact with the
number you read from the financial press. Right now, if measured according to
the methodology of 1980, the US unemployment rate is about 22%. Thus, the
reported rate of unemployment hides more than half of the
And, in the August 2
New York Times,Secretary Treasury Tim Geithner welcomed us to "the
Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)