Politics: December 2014 Archives

ShadowStats: John Williams' Shadow Government Statistics

There's a gap between Americans' experience of the economy and the rosy reports they hear from Washington. Tinkering with definitions is an easy way for government officials to make their economic performance look better than it really is, and it's a game that has been going on for years. Economist John Williams provides alternative calculations of key economic statistics, seeking to correct for the distortions that have been introduced into the numbers by nearly every administration since JFK's. From the site's primer:

"The first regular reporting of now-popular statistics such as gross national/domestic product (GNP/GDP), unemployment and the consumer price index (CPI) began in the decade following World War II. Modern political manipulation of the government's economic data began as soon as practicable thereafter, with revisions to methodology often incorporating positive reporting biases. As a result, investors and most economists, relying on the government's data, often miss underlying economic reality. "

Another article explains how the method for calculating the consumer price index has changed -- "CPI no longer measures the cost of maintaining a constant standard of living" -- and why it is to government's benefit to minimize the stated rate of inflation.