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View Diary: BLS Numbers: They’ve Been Cooked. Kind of. (23 comments)

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  •  On the economic data, I mostly disagree (3+ / 0-)
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    cruz, NotGeorgeWill, mommyof3
    Goolsbee wrote that unemployment had been low during this recession “only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as 'not in the labor force.'
    Well, yes, people on disability are, in fact, not in the labor force. If the # of people on disability went up, then it went up.  How is this manipulating anything? It may be an explanation for why unemployment didn't go up as much as we thought it would, but is he saying that Bush forced people to go on disability? People on SSDI were not in the labor force before 2001 and weren't in it during the 2001 recession. No manipulation at all.
    It was the Kennedy administration that labeled out-of-work Americans who’d stopped looking for jobs as “discouraged” workers and excluded from the ranks of the unemployed where they’d previously been counted.  
    Okay - did they hide this fact from the public? Did economists not know this? Didn't HHS take this into account in its procedures? You say that they lied and juked the stats to make things look better - really? It couldn't have been for legitimate purposes like the fact that discouraged workers aren't, in fact, looking for work and therefore we need to understand these long-term unemployed better and not leave them in the U3 rate as just so much noise?
    President Johnson ... created a “unified budget” where Social Security was combined with other federal spending so the surplus in Social Security could mask the growing deficits in other government spending, especially due to defense spending and the Vietnam/Laos/Cambodia wars
    Yes, agreed, this was bogus and it decreased transparency.
    Nixon had the Fed create “core inflation” to mask actual inflation
    Again, how is this manipulative? The CPI is the main number that's published and talked about, core inflation is talked about only as a secondary measure. Now, perhaps Nixon did it to make things look better, but then again it does have value. Gas and food are indeed volatile - do we want the Fed to be making decisions about the impact of inflation when it's only high due to temporary weather effects on crops? or temporary spikes in gas such as is happening in California right now due to the refinery fires and maintenance? It seems to me that core inflation is indeed a better measure to make monetary policy decisions. Hell, the Fed would be jacking interest rates and ending QE3 as I write this if they reacted to the effects of the drought/gas prices we're having.

    Reagan's change - again, I don't get the argument. I bought more house and took on more debt than I could afford because of the change in the housing component of the CPI? So the CPI was 3% instead of 3.3% - that makes a difference to a prospective homeowner? And again, it was transparent - the BLS didn't hide the fact that it did so, so I seriously doubt that any banks or other financial institutions were fooled into giving out more debt because of a known change in the calculation of CPI.

    So, we should never change the statistics, or the way we calculate them? Even if they no longer make sense? Even if we can get better, more relevant information? I can't agree - as long as it is properly disclosed and makes economic sense, I don't have a problem.

    Now, I do have a problem with the Patriot missile falsehoods, and with the drone strike classifications. But I would suggest there's a big difference - here you are going to a statistic that is no longer transparent, gives us less meaningful data, and has no underlying basis.  As opposed to the introduction of core CPI or a partition out of discouraged workers, where we still have the regular statistics, we get more relevant data, and there is a true policy basis to the new statistic.

    Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

    by absdoggy on Fri Oct 05, 2012 at 08:12:44 PM PDT

    •  You're right to be skeptical (1+ / 0-)
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      mommyof3

      but I urge you to read the links, and not just the highlights, where you see answers to some of of your challenges.

      This is a very thoughtful comment. Still, you are assuming the changes in numbers historically are widely publicized and dissected in the media. You know this is not the case, and when it comes to economic issues, the elite are generally happy to go along with anything that strengthens public perception of the system. Not saying it's hidden, but very often this is the kind of news buried on page A18, or mentioned briefly on the nightly news once.

      Never be deceived that the rich will permit you to vote away their wealth. - Lucy Parsons

      by cruz on Sat Oct 06, 2012 at 04:35:32 AM PDT

      [ Parent ]

    •  And about those discouraged workers ... (1+ / 0-)
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      absdoggy

      They are removed from U3, which is restricted to those who literally have no job at all and are seeking one. That is the "official" figure trumpeted in press releases and by the popular media. But BLS actually calculates about half a dozen versions of unemployment rate.

      U4 adds discouraged workers to the count. U5 also adds marginally attached workers (not actively looking for reasons other than discouragement). Finally, U6 adds part-timers who actually want/need full-time jobs.

      In any event, you're correct that there is a difference between deking the stats and providing alternative or multiple measures. BLS measures several different definitions of what it means to be unemployed. The data tables are available at the BLS web site. On rare and special occasions, I even see U4 or U6 cited by a media outlet for comparison purposes.

      Just because you're not a drummer doesn't mean that you don't have to keep time. -- T. Monk

      by susanala on Sat Oct 06, 2012 at 04:59:24 AM PDT

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      •  Agreed, and I think the different measures have (0+ / 0-)

        merit.

        As long as it's transparent, then I think it is important to look at discouraged workers separately - they may need different training, different skill sets, etc. than people who are in the U3 number.  So, our policies shouldn't try to address total unemployment by treating them all the same.

        Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

        by absdoggy on Sat Oct 06, 2012 at 09:58:00 AM PDT

        [ Parent ]

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