Thanks to President Trump, fake news has been exposed. Conservinator readers weren’t surprised. But, low-information voters are now being forced to second-guess their news source.
The issue is bigger than just the alphabet channels. This has been a long-term problem among the financial news media and government statistical reporting.
Last week, I laughed when I heard a talk radio caller quote the CBO’s (Congressional Budget Office) estimate that shredding Obamacare would cost $350 billion through 2027. [The Cost of Full Repeal of the Affordable Care Act] He defended the CBO as bipartisan and then said, “This is math and it can’t be that far off.” (Insert my laughter.)
In 1974, I took a high school statistics class. Our textbook is still sold on Amazon. It is called, How To Lie With Statistics. The first edition of this book was 1954. The art of making numbers mean whatever you want them to mean, has been around a long time! The federal government is a master at deceptive numbers.
One of the government’s favorite fake numbers is the unemployment rate. This was twisted to perfection during the past eight years. The current rate is 4.9%. Woo-hoo! This is below full-employment, which is 5%. So we’ve had an economic recovery, right?
If an administration had the opportunity to fudge employment numbers, why would they do that? What incentive would the White House have to bring the country to full employment? (Yes, I’m cynical. If you don’t know the answers, you should probably stop reading this article.)
This is how the Federal Reserve would like us to think of the recovery. The red line can be thought of as “money printing.” The green line is the unemployment rate. Isn’t this impressive? The Fed came to our rescue and, through the magic of creating money out of thin air, brought America into full employment. We’re fortune to have an organization like the Federal Reserve. They will save us next time, too.
But, what if the green line is fake news?
John Williams, [shadowstats.com], has built his career correcting government statistics. Williams writes, “Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting.”
Each month, Williams recalculates the unemployment rate. He thinks his ShadowStats Alternative Unemployment Rate is closer to reality. Unlike the government statistics, ShadowStats uses an estimated long-term discouraged workers statistic, which was phased out of government reporting in 1994. Instead of the current 4.9%, the ShadowStats Unemployment Rate is 22.9%. Williams thinks this number is closer to how this statistic was calculated during the Great Depression.
So how do we know John Williams is right?
Doesn’t his graph make more sense when we know 1 in 7 Americans receive food stamps? [In Which States Has Food-Stamp Use Increased The Most] Which statistic—the government’s or ShadowStats’—best fits this admission: Top Ex-White House Economist Admits 94% Of All New Jobs Under Obama Were Part-Time.
I’m often asked, “If unemployment is really 22.9%, why don’t we see soup lines?” Unlike the Great Depression, many of our unemployed have SNAP (Supplemental Nutrition Assistance Program) debit cards. You don’t recognize these people as they go through the grocery store checkout. Today’s social programs hide those most affected by our failed recovery.
For about eight years, I’ve been using this next chart to illustrate our fake recovery. Rather than use the government’s highly manipulated unemployment rate, I’ve been focused on the “employment rate.”
“The Civilian Labor Force Participation Rate” , what I call the “employment rate,” represents all Americans who are eligible to work in the everyday U.S. economy. Some economists discount the value of this chart because of baby boomers early retirement. Others don’t. Compare this chart to our first chart. Which best illustrates reality?
Let’s assume you agree with me. In this Federal Reserve chart, the grey bar is the recession and the white space to the right is the recovery. So, where’s the recovery? Which period has more money printing: the recession or the recovery? Which period has fewer people working: the recession or the recovery? As Peter Schiff likes to say, “If this is the recovery, wait until you see the next recession!”
The fake financial news media doesn’t challenge government reporting. They are not reporters, they are repeaters. For example, a journalist would ask, “What is a ‘recovery?’” Webster defines “recover” as: to bring back to normal position or condition. If we applied this to our last chart, the red line would return to the bottom and the blue line would return to the top. We’re nowhere close to this happening.
Unless we change the definition of “recovery,” we don’t have one. The government wants to be reelected. Financial institutions want investors to have confidence, so they will invest. Businesses want consumers to spend. The media want to sell advertising to businesses and be friendly with the government. All these interests work together to create fake financial news.
In 2016, though, their collusion did not work. The red and blue county election map demonstrates that across America, voters did not agree with the first economic chart. Their personal experience and common sense led them to feel change was desperately needed, an emotional response from our last chart. Trump’s victory was a defeat for fake financial news.
“Dollar” Bill is a real guy, with real knowledge on our nation’s financial calamity, and real solutions for what must be done to dig ourselves out of the hole we are in. Due to his career, Bill must remain “disguised” to protect his position. “Bill” loves America, sees the impending cliff we are all headed towards, and hopes that by sharing his inside knowledge of the failed monetary policy in our nation, that a fiscal “nuclear” event can be minimized.