Revisionomics
Last week, longtime business reporter Felicia Taylor at CNN interviewed several people with possibly better abilities to see the future than the analysts and economists on whom the establishment press normally relies: psychics.
While misguided, I can understand why Ms. Taylor felt the need to seek alternative economic forecasting. It must be really frustrating to place trust in a bunch of alleged smarties who routinely churn out predictions that are consistently and predictably — but somehow “unexpectedly” — wrong.
There’s little doubt that journalists are getting a bit touchy about using “the U-word,” especially since, far more often than not during the past several years, it has meant “unexpectedly bad.” On Tuesday, in the wake of yet another downward slide in consumer confidence after “experts” had predicted improvement, both Bloomberg and the Associated Press let the U-word slip into their initial reports but purged it in later revisions.
Speaking of revisions, most Americans are probably unaware of what has happened to initial government data since Democrats took control of Congress in 2007. In revisions over the following months and years, already “unexpectedly” bad results have almost invariably gotten worse — often much worse. This situation began to go code red (or really “code blue”) once the POR (Pelosi-Obama-Reid) Economy and the recession as normal people define it kicked in three years ago.
Take economic growth. As seen below (full details here), in the 17 quarters starting in 2007, the decline between the Bureau of Economic Analysis’s advance estimates of annualized growth in the nation’s gross domestic product (GDP) and the revised figures currently at the BEA’s web site has averaged 0.58 points:
That may not seem like much, but the average growth currently reported during those 17 quarters (0.73%) is 44% lower than the average of the initial reports (1.31%). In the third and fourth quarters of 2008, the first two quarters of the real recession, opening GDP contraction estimates of -0.3% and -3.8%, respectively, cratered to -4.0% and -6.8% after revisions. Sure, the economy was much worse than Pelosi, Obama, Reid, and the Democrats thought, but as I have previously shown, they’re the ones who caused it to turn out that way. By comparison, currently recorded average annualized quarterly GDP growth during the Bush 43 years of 2003 through 2006 is only 9% lower (3.02%) than what was originally reported (3.31%).
So, during the Republican years, numbers were kept under-reported, then revised upwards? Can’t allow yourself to be accused of over-reporting and monkeying with the numbers for political advantage. Of course, the initial bad numbers make you look bad, too.
With Dems, they have the Press covering for them, so they over-report. They monkey with the numbers, and no one calls them on it.
The problem is, folks do not pay as much attention to revised numbers as they do to the initial release.
Markets are affected by those initial numbers. Meanwhile, there are government folks out there who know the true numbers at the beginning. This gives them a huge advantage in the stock market, and they do take advantage. They know how the markets will react to the true numbers, and position themselves ahead of time. This kind of false reporting is simply criminal fraud, and both sides do it.
This is just one of the ways government officials can outpace even inside traders in their investments. There are no poor Congressmen or Senators.
—————————————————————————
It’s funny. Truman had no way to support himself when he left office. He felt it would be improper to go work for some corporation, after having been President. Might have seemed like a sweetheart deal. He was looking at going onto “Relief” (welfare). Can you imagine? An ex-President on welfare?
He published his memoirs, and the two books were a huge commercial success. He was paid $670k, a huge sum back then, but no royalties. But after expenses and taxes, he netted only $35k. Ironically, he was a victim of his Democratic high tax rate. Eventually, he sold some family property, which gave him some bit of money to live on.
Eventually, they gave ex-Presidents a stipend, recognizing the ethical dilemma Truman was placed in, Truman being the first recipient. Today, our politicians think nothing of that revolving door of business and government. Ethical dilemma? Huh? What? Society was just better back then.
“The problem is, folks do not pay as much attention to revised numbers as they do to the initial release.” That’s an accurate assessment, however, people tend to notice that things are not getting better or are in fact getting worse. They tend to notice family, friends, acquaintances, and/or associates are suffering all manner of privation. No amount of revision can paper over that suffering. Being unable to go to the aid of a loved one, because you are fully occupied bailing your own economic boat, relieves one of the need for numbers.
A “stipend”? Close to $200,000/year, free medical care for the rest of his life, free Secret Service protection for 10 years, free travel, etc.
Pretty good for a “stipend”.
200k a year to let the present president/VEEP retire is cheap at twice the price. Heck, if you started a fund to let both of them retire *today*, I would bet you could get 200k from Wall Street in about 30 seconds, and over 20 million by noon. The stock price rebound in one day would pay for that….
I like the Obama/Joke poster better, though I’d put “Why so unemployed?” at the bottom.
It is also interesting to note that in the last few weeks the government controlled media has been repeating the ridiculous lie that the recession ended two years ago. This mantra keeps poping up in almost every government influenced media outlet. Could it be because the god president was elected almost two years ago and his mere ascension to the throne caused the rising seas to subside and the recession to end. Never have I seen this country’s leaders come off as such stupid and uneducated buffoons. Keep repeating the good news which isn’t and it will come true and yes when they wish upon a star. O tempora O mores!
By the usual economists’ criteria, the recession did end 2 years ago.
They define a recession as two consecutive quarters of negative GDP growth. And in the last year or two, the U.S. economy has been growing very slowly–at a rate that’s actually below the rate of population increase.
But that’s enough to keep this from being called a “recession” anymore.
One wonders if the definition of recession should be changed to mean two consecutive quarters of negative PER CAPITA GDP growth. Because that’s what people care about–the size of the pie relative to the number of people.
We had a miserable 1.9% growth last quarter and it doesn’t look like it’s getting any better. Worse, it could even go DOWN next quarter. Add to that the end of QE 2, which means the Fed isn’t going to be dishing out any more piles of money for the banks to use, and inflation could take off like a jet in the next few months. Meanwhile, unemployment is still very high (much higher than the 9.1% reported if all of the other factors are taken in, like underemployment) and companies are scared stiff about what’s going to happen if Obamacare actually kicks in. And all the Obama administration wants to do is spend more money! It’s a wonder why anybody, ANYBODY, would vote for Obama again given the horrible road to disaster this guy has put us on.
You write good stuff, LS46Here are some of the reasons I believe that folks will re-elect Oscambo:
1. He enjoys killing millions of babies. All those who also enjoy butchering innocents will vote for him.
2. He delights in promoting sodomy and fellatio; same-sex style. Ergo, all homosexual perverts will vote for him.
3. He has communized, and almost bankrupted private enterprise in this country. Hence, all communists, socialists, “progressives”, will vote for him.
4. His goal is the Nanny State, with every person dependent upon and under the control of the Dictator. So, all those perennially on the dole, fat, soft and lazy, will vote for him.
5. He alienates our allies, encourages our enemies, reduces our nuclear deterrent, ignores the Constitution, wages war illegally, subordinates our military to globalist entities, struggles mightily to surrender our sovereignty to the UN, IMF, World Bank, EU, or whatever he can find.Thus, the oneworlders will all vote for him.
6. He studiously evades dealing with the nukes of Iran and North Korea. Later, the Traitor-in-Chief will try to surrender us on the grounds that we must avoid a nuclear war “at any cost”. The cowards and his fellow conspirators will thus all vote for him.
7. He is also assured of the votes of many of the dead, innumerable ficticious persons, those who regularly vote numerous times, the insane, the retarded, the imprisoned, the asylumned, the amoral.
With that sort of constituency, how could he lose?
I would suppose that those who are retreating into the “Sierra Maestra” will not be voting for his re-election?
You forgot the voting illegal aliens.
300,000 votes were cast for Alvin Greene in the 2010 south carolina senate rce
so very true Libertyship46 BUT there are still a lot of those same IDIOTS who voted for him befor who will vote for him again, SAD BUT SO TRUE,
The real injustice of these so-called economic “experts” who are wrong more often than weathermen is that they suffer no repercussions from their errors: no job loss, no reduction in salary, nothing. They just keep on marching along, making the same old, bone-headed predictions, presumably with about as much accuracy as someone (psychic) looking into a crystal ball.
The most telling thing has to be when Obama admitted the predicted ‘shovel-ready’ jobs from the ‘stimulus’ (wink, wink) weren’t “as shovel-ready as we thought.” The only thing in the administration that’s shovel-ready is the administration itself: let’s bury it on 11-6-12 and remove the stink of Chicago corruption, waste, fraud, cronyism & economic disaster, and return the Red, White & Blue to greatness again.
It would be interesting to see how the “Democrat effect” correlates with earlier periods in economic history, for once the Democrats were not all weiners, all the time as they are today. Certainly there was a pronounced “Conservative Effect” when Jimmy Peanuts unexpectedly got kicked to the curb (along with his Senate majority) in 1980. The economy took off in the mid-90s under a more pragmatic than Marxist Bill Clinton and a Republican congress after the prior Democratic Congress was kicked out – that “Conservative effect” again! As for now, pretty much everybody except the media and Barack Obama knows the economy will get a big lift as soon as Barack Obama leaves.
Correlating effect –
>Just read a report on the most unfriendly states to work in; cost of living – taxes etc. Of the 10 states at the bottom 9 voted for Obama in 2008
>States with largest unfunded liabilities – all Union and Democratic run
(Ca,Mich,Ill,NY)
Head of Senate Finance Committee when market imploded – Democrat Dodd
Head of the Banking Committee when the market imploded – Democrat Frank
Who gave us the Community Reinvestment Act – Jimmy Carter
Who gave the power to Community Organizers with CRA – Bill Clinton
Who ran the House/Senate for 5 years racking up $5 trillion in debt – Democrats
But we all know it was George Bush’s fault
ON LIBYA – Obama lied troops died…libs/progressives hate this
The thinking in the White House is that lying is perfectly fine to achieve your goals. (The end justifies the means.) We are all kafirs. Say one thing and do another. Is it possible that half of America can be so easily bamboozled?
It should be noted that half the population is not as smart as the other half. Of course everyone believes themselves to be in the smarter half, me too, of course. Also, the evidence, Obama’s election, would suggest that average intelligence is not very high.
51% pay no taxes. Free ride and they vote accordingly.
That’s why DOH’bama is so proud of the fact that more people than ever are on food stamps.
Get people sucking off the government teat and you get a guaranteed vote.
The bell curve rules. Be on the right or be left behind.
The Red, White & Blue isn’t returning to greatness any time soon. To paraphrase the most salient quote of the past three years, ridding ourselves of this fraud of a president will not rid us of the legion of fools who were willing to have this prince of fools as their prince. The reason that God made the Jews wander the desert for 40 years was to cleanse them of the bad habits learned in Egypt. He knew it would require several generations to perish before the proper moral rectitude and toughness would return to the people. Our country needs at least for the Baby Boomer generation (The Worst Generation) to perish before it can be healed. We need a cleansing fire, or our own version of 40 years in the desert to reverse our moral decline, intellectual vacuity, and laziness. It has taken 40 years for the left to destroy the underpinnings of cultural morality, the family, and through these ‘victories’ to precipitate the demise of a once great country. Throwing the current crop of sick bastards out of office is necessary but not sufficient, my friend.
We have a LONG road to trudge to win our country back. I’m not sure we’re up to it.
And then *Katie bar the door*
John MacArthur (Grace to You) National Day of Prayer: America, Abandoned by G-d, I think is relevant to your point.
PD Quig yoare 150% correct about the socalled baby boomers being the worst generation in the history of the United States,
I know: I was born in 1952 and went to UC Berkeley in 1969-1973. All my old friends are stuck in the Sixties ideological muck. It is impossible to reason with them because collectivism and environmentalism are the new religions for them–with all the irrationality and blind faith implied.
I know exactly what I’m talking about. Unfortunately, I don’t expect to be around when the solution is reached, but I am doing my best to teach my children and their children how recognize and defeat the left’s pathologies.
Hold on, people. Revision of statistical estimates is simply a statistical matter, not political. Basically, monthly employment estimates are based on incomplete information (a survey). Annual revisions are based on more complete information (tax records). The methods used for initial estimates make them procyclical — that is, when times are bad, revisions will be lower, and vice versa. For stat nerds, the initial estimates contain an adjustment that’s explained here: http://www.bls.gov/web/empsit/cesbd.htm
LowSmoke,
That may be true but the media only reports the initial numbers and not the almost always negative revisions.
GIGO, Garbage In Garbage Out! While the numbers in are hard to tamper with, the assertions, assumptions and the preparatory manipulations can be tampered with. My professor of Stats was fond of saying; “No-one is ever fired for under estimating profits.”
exactly.
Lying with statistics is the easiest thing in the world, and the perps can only rarely be prosecuted. After all, they state their assumptions in the fine print and assumptions are never perfect.
Exactly,,,,, and in this particular case the assumptions are what ever the administration wants them to be not unlike the magic performed with the CBO with Obamacare.
Make the correct assumptions for the answer you want and you will get that answer.
There’s Lies, Damn Lies, and then there are Statistics!
Obama has been cooking the books since and even before day one of his regime. Reminds me of how the Soviet 5 year plans were always deemed a great success. RE:7, barbaras, It seems Taqqia has now become official White House policy.
Clarice Feldman at American Thinker has a great post on Obama:
http://www.americanthinker.com/2011/07/the_community_organizer_who_would_be_king.html
“Obama entered office on a groundswell of a disconcerting mania, a mania in which voters imagined on this blank slate of a candidate all sorts of truly fantastic abilities and policies, none of which were warranted in his paltry, truly shabby history.
The man with no available school records, for example, was painted as a genius and his brief time as a University of Chicago adjunct (basically teaching assistant) puffed up to a professorship in constitutional law. The guy who cannot speak a logical, coherent, grammatical sentence on his own was pawned off as a literary genius to unsuspecting, foolish voters. It was inevitable that the reality of his time in office could never match the dream. It was unfortunately equally inevitable that he would prove inadequate to the difficult job of the presidency.
Still, which of those who voted for him could have envisioned the hash he’s made of things in every respect? Unemployment far exceeds what he warned it would reach if we didn’t pass his stimulus package; the housing market shows no sign of lift off; the dollar sinks more each day; manufacturing is at a virtual standstill, and Americans grow more pessimistic about the economy each day. The landmark legislation of his first (and I hope final) term, ObamaCare, is so badly conceived and drafted that Americans are likely to see the best medical service in the world destroyed unless it is soon repealed or ruled unconstitutional. In the meantime, as uncertainty about its future grows, more and more businesses are paralyzed and unable to plan for their futures.”
I am far more interested in his Occidental, Columbia, and Harvard transcripts than his yet to be revealed actual birth certificate. This guy is totally affirmative actioned from high school to the Oval Office. Audacity of Hope = dogma in, dogma out.
Tom Blumer – I am no fan of the Democrats, but I wouldn’t start pointing any fingers directly at them in 2007. What happened had its origins under Clinton; and Bush is partly to blame for events after 2007 (in particular the destruction of Fannie and Freddie – it was his HUD that directed them to pick up the slack as the private market was pulling back from making funds available for new mortgages; remember Harry Truman’s sign: The Buck Stops Here? Of course with the current POTUS the buck stops nowhere.) I would place the blame on the Congress of 2009 and the current POTUS for the unexpected results. Between Dodd-Frank and Obamacare, there will be tens of thousands of pages of regulations written, and no one knows what they will say. That creates uncertainty and uncertainty leads to businesses treading water (so to speak). Then of course, there is wild-card EPA which is intent on legislating cpa ‘n trade through regulation; and of course there are other wild-cards such as the NLRB which is preventing Boeing from opening up a factory in South Carolina. All of those things lead to uncertainty. So, it is not surprising that things are “unexpectedly” worse. Of course, the LSM will do everything to obscure the issue (while touting POTUS’ ridiculous claim of how many jobs were created in his Administration).
JOHANN @3: The National Bureau of Economic Research (NBER), a private non-political organization, determines when recessions begin and end. The NBER uses a formula based on various economic indicators to determine the beginning and end of recession. So while it is true that the recession “ended” that does not mean that economy has returned to its prior peak (although it has) or that it will grow robustly, and indeed growth has been quite anemic (hence, all the unexpected outcomes).
Pardon me, but Bush tried to rein-in Fannie and Freddie, but ran into a buzz saw named Barney Frank, ably assisted by Maxine Waters.
And, don’t forget that the two Senators who received the greatest amount of campaign contributions from Fannie/Freddie, were Chris Dodd, and Barack Obama!
AD – You’re quite correct. But Bush’s actions occurred around 2003. The HUD directive came later, and I don’t know whether Bush even knew about it. I hold him accountable, though, because it was his Administration (hence my comment about where the buck stops). I should note that Bush was only a small player in the meltdown. The major player was Bill Clinton in whose Administration can be found the policies leading to the meltdown (and I note, ACORN shares no small responsibility in this).
Well, what an optimistic view of government reporting this is.
The plain truth is much much worse.
Bureaucrats are libwits. It’s in their blood. More marxists in power means more jobs and higher pay for the apparatchiks.
So they lie.
I don’t think most of them “lie” per se, it’s just that their irrational world view causes them to push the numbers toward what they “know must really be true.”…but, of course, is not.
Most liberals (or bureaucrats–same diff) I know are not consciously wild-eyed Marxists. They’re sincerely surprised when you tick off point-by-point how their beliefs align perfectly with the Communist Manifesto. In the end, they shake their heads and dismiss it as some kind of parlor trick, quickly returning to their belief that they are “progressive freedom lovers”. And then you’re purged from their dinner party guest list, because you “make them feel bad” and they descend into the liberal echo chamber where “Everyone I know agrees with me, so I’m obviously right.”
I see this pattern over and over. Unfortunately, deceitful or self-deluded, their policies are just as HOPELESSLY bad. Why these otherwise intelligent people can’t see it is a mystery.
Count on the MSM/DNC propaganda wing to report on how things re improving/things aren’t as bad as you think/it’s Bush’s fault non-stop for the next 16 months.
Noticed Obama has abandoned the “save or created jobs” nonsense given Porkulus has proven to be a jive turkey; Obama cannot run on his record given the political toxicity of ObamaCare, Porkulus, Frank-Dodd Bank Law, & every other monster written by the Obama Democrat Congress from 2008-2010. Therefore, Obama can only spin more lies, demagogue, & play class warfare. Theses tactics will not work for 2012 given the context of stagflation. Obama has built his house on sand as the high tide comes in to wash his already shaky foundation away. Hope & Change has become Fear & Despair; this is not something to run on for the 2012 campaign, yet Obama will just the same. Obama is toast.
Agreed, Obama is abandoning the sophist rhetoric about ‘Hope and Change’ and ‘Winning the Future’.
He’s even abandoning the misinformation, the statistical lies, the false data, the contradictions.
Instead, he’s moving into demagoguery. He’s more and more ignoring Congress, ignoring the Law, ignoring the Constitution – and declaring that He can do whatever He wants.
Can this last? Is someone going to impeach him? Is Congress going to call a halt? Is the Supreme Court going to stand by and watch him acting as the US Dictator?
Answers:
Yes! No! Maybe! Are you kidding me?
As long as Boehner is the leader of the house you can bet no one will contest this miserable sould in the White House
There isn’t anywhere NEAR enough data to actually support this conclusion. Economic bubbles *do* have a little something to do with it — just as they did with the boom during Clinton’s term.
Not your best work.
This analysis fails to mention the overarching economic phenomenon of the past decade: the housing bubble. The time ranges in the tables in this article neatly match the course of the real estate mania: bubble from 2003 to 2006, and bust from 2007 until now. None of the conventional economic thinkers, Democratic or Republican alike, had any notion of the extremity of the housing bubble, nor predicted the severity of the bust. This being the case, it seems possible that all of their forecasts would lag in both directions–underestimating the good news during a pervasive housing mania, and underestimating the bad news during the crash. I don’t know that this was the case, but until someone can tease out the effect on economic models of not being capable of accommodating booms and busts I’ll be a little skeptical of simply ascribing inaccuracies to a “Democratic” effect and a “Republican” effect.
Actually, people did recognize the bubble for what it was. Bush prevailed upon Congress numerous times to rein in Fannie and Freddie.
Others were able to tell how big the bubble was by simply figuring the difference between current property values and what they would have been had they only risen in accordance with inflation. The difference would be the size of the crash.
I believe we have fallen below that point now. Housing is undervalued, because there are so few buyers. Two reasons for that. First, the economy stinks, so people are hesitant to commit. Second, lending standards have become outrageously high, partly due to government rules mandating such standards.
As soon as Obama is out of office, things will begin to rebound naturally, as the uncertainty will disappear. Right now, you just do not know what government is gonna do next to mess you up. Folks are just hanging on until he’s out.
I think employers ought to be explaining to their employees what the situation is. That would be the most effective thing. “If Obama gets re-elected, I will have to close up shop, and you all will be out of work.” Oh.
you have to put things in perspective, and be optimistic. for instance:
THE ECONOMY IS GREAT! compared to what it will look like next year.
UNEMPLOYMENT IS LOW! ditto
OUR SOLDIERS ARE IN FINE SPIRITS! compared to next year.
OUR DEBT IS LOW! compared to next year.
I CAN GO ON FOREVER WITH THESE EASY PROJECTIONS! until obummer shuts down the internet.
HAPPY INDEPENDENCE DAY! ___________ ___________ _____________.
You are a hoot. Laughing-out-loud! By the way (in case you haven’t heard), the Dems have changed the name of their party to Democratic-Communist Party(DCP)
That would be “UNEXPECTEDLY much worse,” right?
On another note, HAPPY BIRTHDAY USA and lots more of them!
The Left dominates three areas of society– government workers, academia, and the media. Just coincidentally, this is precisely where reports on the economy’s fitness originate. Any wonder that the reports tilt Left?
Despite what they say (are you listening Jon Stewart?), the Left never leaves its politics at the door.
I hope someone is documenting everything with screen shots, etc.
The “Memory Hole” is always hungry.
Excellent post and something I have been noticing for the many months that I’ve looked for it while reading economic news. That word, “Unexpected” kept cropping up. It has gotten to the point now where I have fully subscribed to the view that we have complete idiots running the show where anything “unexpected” could happen any day now.