Wednesday, October 1, 2008


The rationale begins with the concept that the data is not really showing what is real. It is just a small act of self delusion. They don't start out to cook the books. Let's take the cattle industry in the late 1880s. Most of the credit extended to the cattle ranches in the American West came from European sources. Of course investors wanted to see their money grow and to reap dividends. Well one of the things that ranchers started doing was to create "book counts" in order to show the growth of their herds. Hell most of the long horn brush bred type cattle driven up from Texas and spread all over the West were free ranging so how the heck are you going to count the devils? Well, you don't. Actually you can't. So you get creative. One cow has one calf each year so you count( extrapolate) the number of cows you have that are breeders and then report that many calves each year in the appropriate male female ratio and you keep that up year after year and soon you have a book count of 6000 cows per acre or some such figure. Those European investors decide they better count them themselves. Ect. Want to read a fictionalized and true account of this check Michener's 'Centennial' out of the library.

But the cattlemen got lucky just about the time they were all about to be extradited to Holland and hung, along comes the winter of 1887 (might have been 88 or 89). Snow is a thousand feet deep and the wind blows at 2000 mph. All the Texas type cattle die. ALL of the cattle die.
Book count goes down to zero. Into America comes barbed wire fences, and Herefords and they start over again, but this time they tag and count the suckers.

They didn't mean to lie. It just cept in one little statistic at a time.

So here we are.
At the biggest financial crisis in our lifetime?
In just a major recession.
Another Great Depression.
Just a nation of whiners?

So how can we know?

"If what we have been sold in recent years has been delusional "Pollyanna Creep," what we really need today is a picture of our economy ex-distortion. For what it would reveal is a nation in deep difficulty not just domestically but globally. "

This is a quote from:
Hard numbers: The economy is worse than you know
By Kevin Phillips,
Harper's Magazine
In print: Sunday, April 27, 2008
(check out the whole thing)

So here we have the same thing, Pollyanna Creep.

"Under John Kennedy, out-of-work Americans who had stopped looking for jobs — even if this was because none could be found — were labeled "discouraged workers" and then excluded from the ranks of the unemployed. "

"Lyndon Johnson orchestrated a "unified budget" that combined Social Security with the rest of the federal outlays. This innovation allowed the surplus receipts in Social Security to mask the emerging federal deficit.:

"Richard Nixon created a division between "core" inflation and headline inflation. If the Consumer Price Index was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of "volatility," categories that happened to be troublesome (and thus in the "headlines"). At that time, it was food and energy (as it is now). "

"Under Ronald Reagan, the Bureau of Labor Statistics decided that housing was overstating the Consumer Price Index and substituted an entirely different "Owner Equivalent Rent" measurement, based on what a homeowner might get for renting his house. This methodology, controversial at the time but still used, sidestepped what was happening in the real world of homeowner costs. Some say that led to the mortgage crisis today."

"Under the first President Bush, officials moved to reorient U.S. economic statistical measure away from old industrial-era methodologies toward the emerging services economy and the expanding retail and financial sectors. Skeptics said the underlying goal was to reduce the inflation rate in order to reduce federal payments — from interest on the national debt to cost-of-living outlays for government employees, retirees and Social Security recipients."
Under President Clinton, the convoluted CPI changes proposed under Bush were implemented.

"And the Clintonites tinkered with the unemployment number, in part, by changing its housing economic sampling, disproportionately eliminating inner city households. That is believed to have reduced black unemployment estimates and eased worsening poverty figures. "
sources: Ibid

And the shit the GW has pulled is even worse.

So we don't really know what is happening simply because we can't actually name it because we can't see it. We think we hit an iceberg or maybe the wind from the North feels like snow or something. I mean, the geese all flew South two months early doesn't that mean something?

I mean I smell something, something,....


BB-Idaho said...

Kevin Phillips..I'm a huge fan, got all his books. Apparently, they are not widely read...:)

drlobojo said...

He is a seer.
I've only read him in Harper's, and I only read Harper's when at daughters house.
But I remembered this from last Spring Break, before I poisoned myself with oysters, the phrase Pollyanna Creep stuck in my mind so I went looking for it on the web. Say doesn't "Pollyanna Creep" kinda sound like a child molester. I guess in the end it will be.

Erudite Redneck said...

Whoa. Somebody I know needs to write perfessionally about herd behavior and 1880s-era book count as applied to the present unpleasantness. ...

drlobojo said...

Go for it.