Tag: Bullshit Statistics

Rudy Haverstein noticed this one. It used to be that the top 1% wealth exceeded the wealth of the 50-90th percent (the middle class) about ten years ago. Here’s that old chart:

Then some statistical changes were made:

“The Fed attributes the changes to “Distributional Financial Accounts models updated for the 2023Q3 release.” I’ll note that – as with CPI – I’ve never seen data revisions that made the situation look worse, always better. ”

Now the top 1% only recently surpassed the middle class:

I bring this up because too many people believe that economic stats aren’t fiddled. They’re heavily, heavily fiddled. I consider CPI essentially worthless.

This has turned into a massive debate: most Americans think the economy sucks, but if you look at economic stats Biden is the greatest economic president since FDR. But that’s based on CPI being what the BLS says it is. And the CPI, after decades of manipulation, is garbage.

So, let’s skip the bullshit. Every once in a while a study (not a regularly collected statistic) slips and lets some truth thru:

A Federal Reserve study on household finances found that Americans outside the wealthiest quintile have depleted the extra savings generated early in the pandemic and now have less cash on hand than they did when the pandemic began.

If manipulating a statistic is useful to those in power, it is manipulated. When I first started blogging, I used to cover Bureau of Labour Statistic releases every month. I had spreadsheets full of stats. Now I don’t, because Garbage In, Garbage Out. (GIGO.) In truth, even back in the early 2000s the stats were terrible, but it took me some time to figure out how divorced they were from reality, and that divorce has widened since.

Instead I try and look at real numbers: reported retail prices and wholesale prices and actual rents and so on. There’s some unavoidable use of official statistics, but they’re only really useful comparatively, and even then one has to be careful, due to constant revisions, including backwards revisions.

One recent stat is that Russia has been growing faster than the G7. Is this true? Well, I think so, for a variety of reasons, but it’s only a probability. China definitely is, because I see vastly expanding industries all over the place, enough to make up for the deliberately engineered real-estate collapse.

Don’t believe internal numbers. Cross check your personal experience with the experience of other people and believe that. Even if you get it wrong, in a sense you’ll get it right: are prices much higher for you and those you know than they were pre-pandemic, or not? Has your income and those you know risen faster than those prices?

That’s your personal economy.

I have often thought that if I were suddenly in charge of any major country, practically the first thing I’d do would be to form my own corp of auditors, reporting only to me, and the first thing they’d do is savagely audit the statistical agencies, followed by mass firings and re-formation.

Because if your statistics are bullshit, it means you can’t really know what’s happening. And if you don’t know that, well, you can’t make good decisions.

Under our current regime that isn’t a problem: they don’t want to make good decisions, they just want statistical support for pre-determined neo-liberal decisions.

And that’s why they’ve spent 50 years running the economies off the West into the ground.

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