Editorial: Could Our Leaders Just Tell Us the Truth? (St. Albans Messenger)
When someone is without a job, but encouraged enough to seek one, that person counts as part of the nation's unemployed. When someone is without a job but is so discouraged that the search has been abandoned, that person is not counted. Our unemployment rate includes the first and excludes the second. That's how the government keeps its books.
When the government calculates the rate of inflation, it pushes what is called "core" inflation, which means excluding things like energy and food, because they are so volatile. The joke goes that the core number is "inflation ex-inflation", meaning that it's inflation after the inflation has been stripped out.
When presidents submit budgets they routinely build them upon economic growth assumptions that are rarely achieved. These budgets our congressional legislators examine are also "unified" budgets, which means they include Social Security with the rest of the federal government's outlays.
The questions, of course, are obvious. If you don't have a job, but have stopped looking, are you unemployed or not? If the price of gas and food have soared, but are not counted as part of the nation's "core" inflation number, does that mean you live at the "core" rate, and can plan your finances accordingly? Why are we pretending the federal deficit is less than it is by using Social Security's receipts to hide the real damage?
This is happening in Washington for one very simple reason; it makes the news better than it is, and that appeals to those we elect. It insulates them from the need to deal with the real issues.
It's also bipartisan. It was John F. Kennedy who decided to drop workers off the unemployment rolls if they were no longer looking for a job. It made his employment numbers look better. It was Richard Nixon who engineered the separation of core inflation from real inflation. That made the economy look stronger. And it was Lyndon Johnson who crafted the "unified" budget, which, of course, reduced the deficit. Ronald Reagan also worked to lower the effects of housing prices on the Consumer Price Index, which, obviously, reduced the cost-of-living outlays to Social Security recipients, etc.
Not to be outdone, the Clinton administration played its party by reducing the economic sampling used to gather the government's statistics, and did so by excluding a disproportionate number of people living in the inner cities. The effect was to show employment numbers better than what existed.
All this is being defined as the "Pollyanna Creep", which means figuring out how to use the government's numbers to show an economy that is doing better than it is really doing.
The "Pollyanna Creep" is being met by the "Reality Creep" and the result is anger and confusion. Economic reports delivered yesterday showed that the economy is still growing- albeit glacially- and that there is hint in the numbers that we may avoid a recession altogether. That is counter to the world most Americans are living.
But if the government is cooking the books, how do we really know? Government economists now believe that the rate of inflation during the Clinton administration was a full percentage point higher than reported. If so, what's today's reality? If we don't include everyone who is without a job as unemployed, how bad is it really? If we shade the figures to exclude people in the inner city, then what's the truth? Are we living in a make-believe economy?
These questions are being raised more frequently, and the rosy projections are being countered by the reality at home. The people who wrote to Sen. Bernard Sanders about their individual plights are not easily teased from their own realities.
The cost of living- in a global sense- is increasing at a rate that exceeds their growth in wages. The core inflation rate may be 4 percent, but food and fuel costs are about as "core" as one can get, and it comes out of their paychecks every week. Similarly, the cost of doing business also exceeds that "core" rate- ask any business that deals with health care, or any product that is petroleum based.
This debasement of the government's statistics has been accomplished, in part, because we'd prefer the good news to the bad. We like being told things are good. It clears the conscience and allows us to do things we can't really afford. This is one reason we have low interest rates, a massive pile of debt, and a zero percent savings rate. These are the marks of an undisciplined economy.
And it all rests upon the political advantage seen in being the person, or party, that delivers the best news.
It's a burden we all bear. The press is remiss in not doing the homework necessary to expose this lack of transparency. The public is remiss by falling into line, preferring the rosy predictions to their thorny reality.
Is it too much to ask that our leaders tell us the truth?
By Emerson Lynn, Editor and Publisher
