International Investing

For good reason, the economist Murray Rothbard warned about the State collecting economic statistics. He knew that who ever collected the numbers would have incentive to politicize them (eg COLA). And besides manipulations the State would use the statistics as an excuse to expand its reach in order to “manage” the numbers.

Laws, of course, do not create prosperity. A national gain in prosperity comes from an increase in capital which leads to increased productivity. The State, since it generates no income, can only leech off of this.

The bureaucrats have fallen for the same delusions as the journalists. Journalists believe that they are more than just glorified stenographers, that they create news rather than report it. In the same way, bureaucrats think they create prosperity rather than just report on it.

Taking credit for the achievement of the free market is a double edge-sword. When the growth stops and inflation rises, somebody will be held responsible. The public has been trained to believe that the economy is the State, so blaming the bureaucrats when things slowdown is not much of a stretch. So the blind public and the idiot politicians have a symbiotic relationship in the manipulation — they will both ignore reality as long as the official numbers show things are getting better. This leads to the numbers being further and further off base until they are nearly useless for analysis.

Fortunately Walter Williams of www.shadowstats.com tracks the numbers and corrects for politically driven manipulations. His latest report has some surprising conclusions:

Real unemployment right now—figured the way that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression—is running about 12%. Real CPI right now is running at about 8%. And the real GDP is probably in contraction.