By Andrew McCleese
The euphemism is “spin” while the true definition of the spoken and written words of bureaucrats and the mainstream media is propaganda. The monthly jobs report has become little more than a monthly opportunity to deceive the American people. Actually, virtually everything spoken, written or uttered by establishment politicians and journalists (sic) has been a lie for quite some time. There is little need to rehash lies about inflation numbers, lies about East Anglia climate data or lies about weapons of mass destruction and links to Al Qaeda, we can just live in the now and read the media talking points and Democratic political establishment hype concerning the January jobs data for a fresh example. As Benjamin Disraeli once remarked (according to Mark Twain):
“There are three kinds of lies: lies, damned lies, and statistics.”
The lies are not inherent in the art of statistical analysis, but in the government pencil pusher whose job depends on favorable metrics, regardless of how inaccurate those metrics may be. Enron accounting comes to mind, and when Enron tactics will not work for you, just blame the snow. Honest and accurate quantitative analysis of the jobs data, as is routinely done by John Williams at Shadow Government Stats, shows a very different picture compared to the headline number of 9% unemployment floated around the media and by the Obama Administration squawkers today.
As Rick Santelli points out, there are a number of lies buried inside the different methodologies the BLS uses to compile their data on employment. The BLS’ data is equivocal as none of their surveys agree with one another. The headline number that resulted in a parade of pom-poms and streamers was 36,000 jobs added in January, which was only 1/4th of the consensus estimate of 146,000 – 148,000 expected jobs added. Additionally, it is a fairly well known that in order to have stable employment 125,000 jobs must be added each month to simply keep up with population growth. To truly lower the unemployment level requires either robust job growth well above the 125,000 a month figure for consecutive months or smoke and mirrors. Care to guess which method is being employed to dramatically lower the headline (U-3) unemployment number? A .4% drop in unemployment in one month is dramatic, too bad it is not real.
What has been happening for some time now is the government is simply dropping prospective employees out of the calculation. Long term structural unemployment, disgruntled job seekers, insert cutesy term here is what the government calls people who simply can not find work and have been looking for work for over six months with no success. These people are not unemployed or even prospective workers according to the BLS. It somewhat reminds me of all the “non-humans” currently residing at the military’s Guantanamo Bay Indefinite Detention Spa and Resort or rendered in some hole off in a foreign country. The reason such anemic job creation can result in a .4% drop in the unemployment rate is because fewer people are considered to be in the labor market then actually is the case. People not counted in the labor market is at a near all time high even while the U-3 statistic is falling. Currently labor force participation is at 64.2%, the lowest since 1984.
Other key tools used in this government chicanery are the seasonal and birth death adjustments. The birth death adjustment dates back to 1999 and has been a way to manipulate data favorably since its inception. The BDM (Birth Death Model) has been a smashing success. Since first implemented in April 1999, the BDM has always resulted in a net positive increase in the number of jobs reported. The BLS, as mentioned above, compiles their data from a series of surveys. The way the BLS’s attempts to factor in the impact of new and closed businesses which are unable to be included in the actual BLS survey is through the use of this adjustment. The problem with this number is that not a single job reported to be created as a result of this adjustment was actually counted, it is an estimated number based on a very complex set of assumptions. For instance, in 2007 as much as 75% of the jobs “created” were simply a result of the BDM. The current BDM for January relieved the government statisticians of 339,000 potential employees to be counted.
The birth death adjustment is similar in many regards to the seasonal adjustment, which also has the tendency to remove otherwise eligible laborers from a head count. This was on display all summer long while the BLS continued to seasonally adjust the employment data as if the auto makers had shut down operations. It is typical (in non-depression, non-government bailout years) for auto manufacturers to close down production and factories for a period of time in the summer months and temporarily lay off workers. To account for this typical decrease in employment attributed to auto manufacturing production cycles, the BLS would seasonally adjust during the summer to account for these laid off workers. No need to count these people as unemployed when it is understood to be only temporary due to normal operations. However, this summer the auto makers did not close down plants and lay off workers for the summer months. This did not stop the BLS from taking hundreds of thousands workers out of the labor pool for the purposes of statistical manipulation. It was a deliberate lie to the American people as the statisticians knew the typical reason for fluctuating numbers in the summer did not exist. What is missing from the establishment parakeets on the television today is the acknowledgment that without a seasonal adjustment, the U-6 statistic (a much more reliable gauge of unemployment) rose in January from 16.6% to 17.3%.
Some may consider all this statistical manipulation by the BLS to be simply a result of government incompetence or the complexity of labor market; I tend to disagree with that assessment. To further illustrate this point, one need only to examine Harry Reid’s recent comments on the “savings” Obamacare has already produced to see that government lies are not just a result of mathematics too labyrinthine for the commoner to navigate.
Harry Reid (who was not available to comment on his “facts”) recently remarked:
“The health-reform law is already saving lives and saving money… Last week we saw just how much this law is helping cut down on fraud in the health insurance industry. We’ve recovered $4 billion so far, and this law will keep cracking down on those who try to take advantage of the vulnerable.”
Harry Reid is pulling his numbers from a report by the Heath and Human Services which declared $4 billion dollars in fraud savings for fiscal year 2010 . As a Senator, Mr. Reid surely knows the fiscal year ended September 30, 2010, meaning that Obamacare was only in effect for 6 months out of FY10. However, most of this savings were a result of jury trials which originated long before the Federal takeover of health care. Mr. Reid, as a former attorney (who made his fortune allegedly in private practice law) has to realize that for a case to have been adjudicated in a courtroom in 2010, the investigation began long before Obamacare came to save the day. As the Washington Post states:
“The bulk of the savings comes from 217 guilty pleas and 19 jury trials conducted in fiscal year 2010 — cases that had been long in the works. There was a October 2009 sentencing in Miami for health-care fraud, conspiracy to commit health-care fraud and obstruction of justice, a March 2010 court order to pay more than $10.7 million in restitution to Medicare, and so forth. Case after case is listed, none of which resulted from the health care law.”
Personally, I find it difficult to believe dichotomous tales from Mr. Reid. How could an accomplished lawyer who was so proficient in the practice of law as to become a very wealthy man also be so clueless as to not understand the process of bring a fraud case to trial? Mr. Reid either practiced law on a CBS or NBC soap opera or is telling a bald faced lie to the cameras. Only in T.V. dramas are investigations and trials wrapped up in a nice, neat, timely little package.
It is a bridge too far to believe the jobs data is anything other than government deception considering the track record in all areas of discussion. When I begin finding an equal amount of truthful government and media statements, I may reverse my cynicism. I am fairly certain a 180 is not in my future.