Thursday, August 27, 2009

Lying with statistics

Call it what you will my father was a numbers cruncher statistical anaylist statistical engineer bean counter. He always said you could make numbers say anything you wanted to. I see the numbers for new unemployment claims dropped this week and you'd think that was a good thing but the way numbers are kept I wouldn't be so sure. On the surface it might look good but then there's the underlying factors that they never seem to talk about. You'd think that the rise in unemployment is slowing. What they don't tell you is how many fell off the rolls because they ran out of unemployment.They aren't counted you know. And there's ones that couldn't get quite enough hours to reapply and of course the temp workers that fall through the cracks or could be considered underemployed. So they say the national unemployment rate is at 9.4% when in actuality it's more like 15 or 16%. I've also heard of some small towns at 25 or 30%. And of course you have Michigan that's been well over the national average for quite some time
So how does this all end? What will happen that will be the turning point. To know that is to look back at what happened. This is in many ways a repeat of the 1930s. Greed and speculation took hold. The rules were eliminated so that leverage was the king for a day but then fear set in and the great financial house of cards collapsed. So where are we now? The banks got a nice bail out but rather than use the money to get things going they went out like a teen with his first pay check and blew it. They bought other banks in hopes of being king of the hill when it was all over. Consumers aren't spending for fear they may be the next to hit the unemployment line so they're saving like never before. All that cash is being parked in the banks that still won't make very many loans so the banks are busy making the next bubble. The only thing keeping the economy going at present is the government but even the bulk of its' spending won't kick in until next year. That should give the banks plenty of time to become bloated to the point where they have no choice but to lend again. Even the federal reserve is playing along by keeping rates at near zero. So with one foot on the brake and one on the gas it should be interesting next year when the brake is released.
Now if you'll excuse me I need to get on the phone to some potential employers because I just love hearing those three magic words "No work here".


Holte Ender said...

I believe that 15% is probably a more realistic figure. Lies, damn lies and statistics, or to be politically correct: Misinformation, damn misinformation and creative accounting.

an average patriot said...

Changing the way counts were done and what was counted in order to get the figures you wanted was started by the Bush misadministration.

It is done routinely today! There is something to the saying numbers do not lie people do. Same with polls you can finagle the out come by the questions you ask and how you pose them.

I was an accountant and one thing I will never forget was my Professor saying was you can be wrong just be consistently wrong!

BBC said...

Why are you telling us what wise people already know?

S.W. Anderson said...

The hell of it is that because of structural changes in the economy, even when the recession is officially considered over — I read in today's paper some are saying that's already happened — a whole lot of people won't be called back to work or find new jobs on a par with the ones they lost.

The statistics say little or nothing about that.

We simply can't prosper and have a healthy economy if the financial industry is its biggest, strongest component. That's a recipe for disaster.

What we need is a proliferation of new manufacturing, along with more milling, mining and small and medium-sized farms and ranches.

John said...

Jeebus Crow! Google "unemployment + U6" The data is well-known and available for all to see.