By John Crudele at the New York Post
As voters were coming out of the polls on Tuesday, pesky reporters were asking why they voted the way they did — and what was going through their heads? The most popular response — from 45 percent of the voters — was the economy. Only 28 percent said their families were doing better financially.
The economy is always the major issue in an election during times like these. So no one should have been shocked that voters took their anger out on the party that controls the White House, even though Republicans are just as much to blame for our economy’s failures.
John Harwood, a political reporter for CNBC, asked a very good question before the votes were counted: Why? As in, “Why did people appear so angry and unhappy when the stock market was at record levels, the unemployment rate is down sharply, inflation is subdued and the number of jobs is increasing?” Harwood’s explanation was that the benefits of this economic growth weren’t being evenly distributed and were being felt only by the blessed in the American economy — the upper 1 percent, if you will.
Harwood is only a little right. Yes, the economy is blessing the few and leaving the rest of us in limbo. What Harwood and the rest of the folks who rely solely on Washington’s mainstream thinkers and Wall Street boosters for their information don’t realize is this: The economy isn’t really doing what the statistics say it is doing. Our nation’s economic statistics are nipped and tucked, massaged, managed, fabricated and dolled up. In short, our statistics are wrong and Main Street folks know it.
Here’s what a Wall Street hedge fund mogul, Paul Singer, head of Elliott Management Corp., told his clients the other day: “Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” Singer wrote. “When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.
I’m glad someone is reading my column. But it’s not like Singer — whom I don’t know — was willing to say that out loud so that everyone could understand. He wrote that in his newsletter to his clients. So, shhhhh! It’s a secret. Don’t tell Americans that the economy isn’t doing so well. (Oh, that’s right, they’ve already caught on).
I won’t get into the year-long investigation I have been conducting into the Census Bureau’s faulty economic data. Now that the Republicans control both houses of Congress, I’m sure what is going on at Census will be looked at very carefully. But fabrication of data isn’t the only problem. Put enough academics and statisticians in a room and they can turn any statistic into something it isn’t. Let’s use Singer’s list.
- Fake growth: The US economy is growing moderately. That’s pretty much certain — but it’s not growing as fast as the government would have you believe. The Commerce Department recently pegged third-quarter growth at a 3.5 percent annual rate — but earlier this week, some real numbers came out. Our exports declined in the third quarter and construction spending was weak. So that 3.5 percent guess will probably be revised down to a 2.9 percent annual rate on those numbers alone. But Singer is probably also referring to the artificially low inflation number that Commerce uses in its GDP calculations. If inflation were measured correctly, GDP growth for all years might be 30 percent lower than reported.
- Fake money: Singer is referring to the $4 trillion in dough the Federal Reserve printed under quantitative easing that has resulted in millions of regular folks not getting much interest income and, therefore, they’re cutting back spending. That’s why the economy is weak.
- Fake jobs: The Labor Department adds hundreds of thousands of jobs a year to its count for positions it thinks, but can’t prove, are being created by new companies. This practice, which has gone on for decades, needs to be investigated. On Friday, Labor is expected to report job growth of 230,000 for October. That figure will be boosted by another heaping serving of job guesstimates.
- Fake financial stability: The artificially low interest rates are not only propping up banks and Wall Street profits but also making the US government’s financial position look better than reality. If Washington had to pay market rates for the money it borrows, the US budget deficit and debt levels — already excessive — would be worse.
- Fake inflation numbers: Commerce doesn’t only play tricks with the inflation number used to calculate the GDP. It also tamps down the consumer price index — and cheats Social Security recipients and others — through academically approved methods like geometric weighting and hedonics.
And that, Mr. Harwood, is why people are so nervous. http://nypost.com/2014/11/06/us-economic-growth-is-all-an-illusion/