Figures don't lie, economists do

It always amazes me how true the old adage, “figures don’t lie, but liars figure”, is. Take the mainstream economists. Month after month, year after year since the meltdown of 2008, they come up for statistics that claim that our economy has fully recovered (or, at least, that things are looking up).

I guess it shouldn’t surprise me that they basically function as cheerleaders for the banks and big business. After all that’s who pays them and whoever pays the piper, gets to call the tune.

Witness a syndicated article in today’s StarNews (Wilmington, NC) titled “Salaries poised to climb in 2016”. The economists from Moody’s and the Federal Reserve Bank of Atlanta (what did I say about big business and the banks paying the piper?) are cited as having found an improving trend in workers’ wages. They claim at “workers who have kept their jobs” saw a 4.1% year to year increase in the 3^rd quarter of last year. They managed to find this mildly optimistic showing by excluding new and part-time workers, since, if they are included, the rise in hourly wages drops to around 2%. WOW! What are folks going to do with all that extra money?

I guess these workers really don’t count – that is unless we are calculating the “unemployment” rate. There it’s convenient to include part time workers who want full time jobs as employed, but exclude workers who have given up finding work from the count of the unemployed. If we include the under-employed and the discouraged workers we get a figure about double the published rate of 5%.

One figure that gets a lot less play in the media is the labor participation rate which stands at its lowest since the late 1970s. It is a longer term trend that started during the dotcom bust of 2001 and accelerated after the 2008 crash. Not a positive sign at all for the future of the average family income. And this “reserve army” of workers definitely exerts a downward pressure on wages.

A more sober assessment of the US (and world) economy might raise concerns about the economic effects of inequality which has (at least in the US) reached heights not seen since the 1920s and continues to spiral out of control (sic). It would draw on the work of economists like Piketty, Stiglitz and Krugman who have raised red flags (oops, bad choice of color) about the growing inequality.

So the real economic picture in the US (and abroad) is not that rosy at all. But the economic pundits continue to spout their mantra that “prosperity (for all) is just around the corner”. Haven’t we heard that tune before?

So you see, the facts can be manipulated to prove the opposite of what is actually happening. That’s scary, almost as scary as Faux News and friends and the Republican candidates for President, who don’t want to be bothered by facts at all.