The horizon is not so far as we can see, but as far as we can imagine

Tag: Bullshit Statistics

Nothing Can Be Done When People Believe Lies

Former CIA Agent John Stockwell on the CIA’s propaganda war on Cuba:

“We pumped dozens of stories about Cuban atrocities…we didn’t know of a single atrocity committed by the Cubans. It was pure false propaganda to create an illusion of communists eating babies for breakfast.”

One of the most fundamental reasons the world is screwed up is that most people believe a bunch of lies. This can be flagrant, like the “drones of death” Iraq supposedly had, ore that Iran killed 50K protestors or that Iraqi troops bayoneted babies in Kuwait.

But it can also be subtle. The generations long understatement of inflation in the consumer price index, for example, means that people lost a third of their actual purchasing power (or more) while the government gaslit them.

Everyone’s walking around talking about stats which have no relation the real world and which predict nothing. It’s like GDP: “Spain’s GDP is about the same as Russia’s.”

So? GDP measures the market value (price) of what your country is spending money on. That’s all. It doesn’t tell you how much industrial capacity they have: how many drones, artillery shells and weapons they can create. Whether or not they can generate their own energy without imports. Whether they can feed themselves. Whether their energy grid could survive mass adoption of air conditioning (hello Britain.) Britain’s water companies added a lot to GDP while flushing sewage into rivers.

American intelligence recently noted that Iran had repaired most of the damage from the first part of the war. But Iran’s GDP is tiny.

Turns out, however, that since they couldn’t buy industrial and construction goods for so long, they became good at making them themselves. Sanctions mean they mostly can’t sell to foreign markets, so they don’t show up much in GDP, but they have the capacity. Meanwhile the US has a massive GDP and takes years to build or repair a bridge that China can fix in weeks or building in months.

We’re swimming in a sea of toxic bullshit. The “facts” our decision-making apparatus uses are often just straight wrong. The population is lied to even more systematically.

If I were writing laws it’d be a mandatory prison sentence for a politician or government official to knowingly lie to the public. No one can make good decisions with bad facts.

Now this isn’t to say that often we do have good facts and do the wrong thing anyway. I’m old enough to remember the doctor shortage in Canada being predicted back in the late 80s, especially the shortage of family physicians. Same with the nurse shortage.

The solution was obvious: train more doctors and nurses. This takes time: more medical school slots, more residencies, etc… But we knew well in advance. We did nothing except think “we can steal doctors and nurses from the third world”, then make it hard for them to work in Canada.

So good facts alone won’t save you. But bad facts make it hard to do the right thing even if you wanted to. Just before the Iraq War over 70% of Americans thought that Iraq was behind 9/11. There is zero evidence of that. There was zero evidence of that back then. But if you believe a lie, you may act on the lie and so Americans supported the war.

For going on 40 years we’ve been making our statistics not reflect reality. This was deliberate, because low inflation stats meant low adjustments to pensions, wages and so on. GDP goes up as the only statistic that mattered concealed that the industrial base was being offshored, which made some people very very rich.

Some people knew the lies were lies, but many didn’t, and the longer the lies continued the more people forgot they were lies.

Till reality (that grocery bill) became impossible to ignore, but compromised stats made it nearly impossible to make the argument to do something.

Lying is a primal sin exactly because it makes even understanding a problem either impossible or much worse. I lie is how we change the world into something fake but better for us. It’s one thing to say “my dog ate my homework”, it’s another for public officials to lie so that some people benefit and others (always a much larger group) suffer. If it was up to me a politician or government official knowingly lying would carry a mandatory prison sentence.

Our “masters” have completely forgotten that democracy is supposed to be about service to the people. Politicians work for the public, not the other way around.

At least in theory. But the further the theory moves from practice, the more politicians act for any reason other than the common weal, the more they need to lie so they can do what they really want. In this era, mint more billionaires.

The complete normalcy of government lies, politely called propaganda, conceals the sort of rot which destroys civilizations, and it’s helping destroy ours.

 

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CPI Isn’t: Health Insurance Cost Index

The Consumer Price Index is taken as a proxy for how much consumers pay for goods and services. It isn’t, for a wide variety of reasons. Here’s another:

 

This is a component of overall CPI, but what it tracks is actually retained earnings. The justification is that if retained earnings are down, more of premiums are being spent on healthcare! Of course you don’t care about that, what you care about is how much your insurance costs.

Now there might be some technical argument for this IF all the other components of medical care costs were tracked accurately, but like everything else they are subject to hedonic adjustments and various other hand waving.

As a reminder, hedonic adjustments lead to conclusions like “there was recently a 20 year period during which car prices didn’t rise.”

I will be clearer, the US economy has been shrinking for some time. I’m not sure how long because the numbers are so poisoned it’s impossible to tell. The maximal case is since the early 90s recession (hedonomic adjustments for computers were off the charts, but the evidence finds no overall increase in productivity from computers.) The “almost for sure” case is from the financial crisis, so late 2007.

Almost everyone in the US is worse off, surveys find that two-thirds of Americans can’t afford a decent lifestyle and wealth is shrinking for everyone except the top 1%. This is all concealed by bullshit top line economic statistics.

Properly accounted for I doubt if the American economy is half the size of China’s, and where it matters (manufacturing and resources) it’s probably closer to a third the size. No, “will you have fries with that” and “my job is to write 1,000 page reports” jobs do not count. The second in particular is actively detrimental to the real economy, as is essentially everything done by finance, crypto, and at least half of what American tech companies do.

As I’ve noted before, Trump is accelerating the decline. We’ll go back to Trump’s “unique accelerationist genius” soon.

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More Statistical Manipulation In Real Time (Top 1% Wealth)

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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