Uncle Sam’s Economic Performance Art

Close, you will know, only counts in horseshoes and hand grenades.

I want to say it counts in government data tabulation efforts as well… but news from the Labor Department earlier this week means I can’t say that… unless we redefine “close” to mean something akin to a chasm.

Maybe you saw the news. Per CNN:

US job growth during much of the past year was significantly weaker than initially estimated, according to new data released Wednesday.

The Bureau of Labor Statistics’ preliminary annual benchmark review of employment data suggests that there were 818,000 fewer jobs in March of this year than were initially reported.

Every year, the BLS conducts a revision to the data from its monthly survey of businesses’ payrolls, then benchmarks the March employment level to those measured by the Quarterly Census of Employment and Wages program.

The preliminary data marks the largest downward revision since 2009 and shows that the labor market wasn’t quite as red hot as initially thought.

That’s gonna leave a mark…

I’m always taking the government to task for this shortcoming and that. And I do so because it’s frustrating to me that politicians and bureaucrats lie, dissemble, warp the truth, and flat out make up alternative facts to shape some BS narrative they want us to believe.

And then we get news reports like the one from CNN.

It’s like watching the house of cards crumble in slow motion…

I’m sure apologists can give me chapter and verse as to why it is the data are wrong and how forthright the government is in going back to rectify their errors.

Problem is, these are big errors. These are not rounding errors. These are errors that move markets.

Stocks and bonds and the dollar itself ebb and flow based on the monthly jobs reports. Even a narrow miss to the downside can cause all kinds of dyspepsia in Lower Manhattan.

So what would the previous year have really looked like in stock-market terms if the jobs market had been shown to be less glitzy? After all, econ commentators and the sycophants in the financial markets have been cheerleading the great American economy because of the robust jobs market.

Yet, that robustness, it turns out, was not so robust after all.

Was it all a lie?

Economic performance art?

The jobs market is just part of the schtick.

I’ve ridden this hobby horse many times over the years, but consider the monthly inflation report, too. Government has manipulated the number so heavily that it’s catfishing the American people—pretending it’s something it is assuredly not.

The inflation arbiters rely on a voodoo craft called “hedonic adjustments.” It claims that if a car’s sticker price is 10% more expensive than a year ago, it isn’t what it seems because this year’s model contains a better radio than last year’s, and had the carmaker used this year’s radio in last year’s car, then last year’s car would have been much more expensive.

Thus, car inflation, per government’s official proclamation, actually rose just 1%.

Now, that’s an oversimplification of hedonic adjusting, for sure. But you get the point: Government finds all kinds of ways to make a blue sky appear green, and then the G-men gaslight you into believing that green was always the sky’s real color.

Real inflation in America is much higher than the number the media reports every month.

If America reported inflation based on the formula used before 1990, inflation today is about double the official rate. If government used the formula it phased out in 1980, inflation today is nearly 3x the reported rate.

Of course, you might ask a great—and legitimate—question: “Well, what if the pre-80 and pre-90 formulas were wrong, El Jefe?”

“That is a great—and legitimate—question,” I would reply.

But why are the revisions always down?

Why does inflation always grow weaker and weaker and weaker with these revisions when American pocketbooks clearly feel the truth—that the cost of living is far more expensive today than it was in previous decades?

My lower-middle-class grandparents could live a decently comfy retirement on very small Social Security checks and my grandmother’s tiny pension of a few hundred dollars a month.

Today, retirees struggle mightily to live on just Social Security. Some can’t and must return to work to afford a meager life…

What I am ultimately getting at here is that Americans are rarely given the absolute truth when it comes to the data the government distributes. So, I never believe it. What I believe is what I see.

I see persistent and pernicious inflation.

I see vast and unmanageable debt.

I see an ever-decaying dollar.

I see a great schism coming to America as left and right cleave apart.

I see decades of lies and obfuscations and propaganda coming home to roost later this decade.

I am not trying to beat up on America or denigrate my homeland.

But I am not going to cheerlead for a team that doesn’t tell the truth and instead tries to manipulate the data to spin a story that isn’t real.

At some point, these kinds of lies always end badly for everyone involved.

I just hope that you’ve prepared yourself over the years by stuffing your portfolio with gold and non-dollar assets.

They won’t stop the lies… but they will buffer your lifestyle when the lies are exposed and the reckoning arrives.