Do Politicians Lie? (Sarcasm Intentional!)

People are starting to wake up.  Big brother is not only getting bigger, but much less brotherly!  56% of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government's become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.  44%  of those polled disagree.

The survey indicates a partisan divide on the question: only 37% of Democrats, 63% of Independents and nearly 7 in 10 Republicans say the federal government poses a threat to the rights of Americans.

According to CNN poll numbers released last Sunday, Americans overwhelmingly think that the U.S. government is broken - though the public overwhelmingly holds out hope that what's broken can be fixed.  That hope is well-founded.  After all, "Marko's Take" has arrived on the scene (shameful immodesty intentional!).

Undoubtedly, the source of mistrust is the fact that our own government has turned lying into science.  Somewhere along the line, it became "acceptable" for our President's to lie.  Richard Nixon, Bill Clinton, George Bush and now Barrack Obama are phenomenally talented liars.  Unabashed liars!  And let's not forget Hillary Clinton.  Still ducking those bullets in Bosnia, eh, Ms. Madame Secretary of State?

I believe the public has had it with the BS fest out of our political leadership.  Yes, sometimes the truth hurts, but lying as standard operating procedure does NO ONE any good.

Perhaps the greatest source of pure fiction from Washington, D.C. are our reported economic statistics which have, over the years, gotten so contorted that they bear virtually no resemblance to the truth!  This process began in the Kennedy Administration and has crept to a level of greater and greater distortion ever since.

According to a fascinating article in Harper's magazine (http://www.harpers.org/archive/2008/05/0082023), the story starts after the inauguration of John F. Kennedy in 1961, when high jobless numbers inconveniently interfered with the image of Camelot.

The result, implemented a few years later, was that out-of-work Americans who had stopped looking for jobs — even if this was because none could be found — were labeled “discouraged workers” and excluded from the ranks of the unemployed, where many, if not most, of them had been previously classified.

Lyndon Johnson, for his part, was widely rumored to have personally scrutinized and sometimes tweaked Gross National Product (GNP) numbers before their release.  And, by the 1969 fiscal year, Johnson had orchestrated a “unified budget” that combined Social Security with the rest of the federal outlays.  This innovation allowed the surplus receipts in the former to mask the emerging deficit in the latter.

Richard Nixon, besides continuing the unified budget, developed his own taste for statistical improvement. He proposed — albeit unsuccessfully — that the Labor Department, which prepared both seasonally adjusted and non-adjusted unemployment numbers, should just publish whichever number was lower.  In a more consequential move, he asked his second Federal Reserve chairman, Arthur Burns, to develop what became an ultimately famous division between “core” inflation and headline inflation.

 If the Consumer Price Index (CPI) was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of “volatility,” categories that happened to be troublesome: at that time, food and energy.  Core inflation could be spotlighted when the headline number was embarrassing, as it was in 1973 and 1974.  Naturally, core inflation is more important since NO ONE buys Food or Energy (sarcasm intentional!).

In 1983, under the Reagan Administration, inflation was further massaged when the Bureau of Labor Statistics (BLS) decided that housing, too, was overstating the CPI.  The BLS substituted an entirely different “Owner Equivalent Rent” measurement, based on what a homeowner might get for renting his or her house. This methodology, simply sidestepped what was happening in the real world of homeowner costs.
 
Because low inflation encourages low interest rates, which in turn make it much easier to borrow money, the BLS’s decision no doubt encouraged, during the late 1980s, the large and often speculative expansion in private debt — much of which involved real estate and some of which went spectacularly bad between 1989 and 1992 in the savings-and-loan, real estate and junk-bond scandals. 

The distortional inclinations of the next president, George H.W. Bush, came into focus in 1990, when Michael Boskin, the chairman of his Council of Economic Advisers, proposed to re-orient U.S. economic statistics principally to reduce the measured rate of inflation.

His stated grand ambition was to move the calculus away from old methodologies toward the new emerging services economy.  Skeptics, however, countered that the underlying goal, driven by worry over federal budget deficits, 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.  Marko's Take agrees with the "skeptics"!

It was left to the Clinton Administration to implement these convoluted CPI measurements, which were re-iterated in 1996 through a commission headed by Boskin and promoted by Federal Reserve Chairman Alan Greenspan.

In 1994, the BLS further redefined the workforce to include only that small percentage of the discouraged who had been seeking work for less than a year.  The longer-term discouraged — some 4 million U.S. adults — fell out of the main monthly tally.  Some now call them the “hidden unemployed.”

For its last 4 years, the Clinton Administration also thinned the monthly household economic sampling by one sixth, from 60,000 to 50,000, and a disproportionate number of the dropped households were in the inner cities.  The reduced sample is believed to have reduced black unemployment estimates and eased worsening poverty figures.

Are you one of those people that shrugs their shoulders and says "All politicians lie"?  I heard that one enough during the Clinton years.  If you think this behavior is in any way shape or form acceptable,
TAKE ME ON!

Marko's Take

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