Official Stats Distort Reality

Daniel Ryan sent me this great article on a very funny example of government creation of utopian official statistics in China. As he and the authors are very aware, the incentives to create such utopian stats are obvious in China–and also around the world, though commonly in more sedate and hidden ways than this. If you pay them huge rewards for creating false stats, they will do so.

Actually, the incentives to lie with official stats in more sedate and hidden ways are far greater in the US than in China because the Party Big Wigs in China love to imprison or even execute lower officials for corruption once in a while as a way of “beating their own breastplate of righteousness” by making it look like they are trying to stop corruption, which they are doing at the lower levels to feather their own luxury nests in the eagles’ nest high above those lowly folk.

In the U.S. officials lie all the time in more discrete ways with stats with no punishment and lots of hidden rewards for helping deceive the dumbos. Right now the Fed, Big Banks, Big Media, High Rolling Big Speculators, and the government are rolling out all kinds of phony “statistical proof” of “recovery at last.” This is about the tenth time they’ve played this skit. I’ve written about all of them since way back in about 2007 when the Fed, et al, were denying there was any housing bubble to leak, nevertheless to soon break. But they keep doing it with gusto.

This time we’re just coming off months of worldwide central bank tsunamis of paper money and credit and subsidies and below real interest rates loans to Big Speculators. The “carry trades” were immense and goosed the loans and specs and purchases of homes and cars and all the goodies of the rich, so the official stats rose. Then about a month ago the world started running away from almost all developing nations’  currencies and credit markets and they’re now in crisis. But the lingering (lag effects) official stat data of that great era of tsunamis of free money are still coming in. They’re rather puny considering  the trillions poured out, but they’ve pumped up luxury cars and houses for the rich in the  U.S. and even boosted exports in the E.U. The rich [top 1%] got only about 5% of U.S. wealth when this all started. but the Fed et al., have gorged them on free money at no risks, so now they have 25% of U.S. wealth and that “wealth effect” is leading to buying luxury cars at below cost of production, and trophy homes in Marin and La Jolla, etc.

No knowledgeable person believes any official stats these days. Governments have every incentive to lie without getting caught, so they do.

Even seemingly non-political stats are lies. Here in California we’ve just had a horrendous forest fire in the Yosemite area that endangered the power and water of San Francisco and poured ash into the water reservoir of that great city. Armies and air forces fought it for weeks and the winds and heat declined enough along with the burning of all the vast brush to get it under control. But the acreage burned is the fourth largest in modern history, as the officials admitted. But what they don’t mention is that the big ones in the earlier days were not fought by armies and air forces with vast fire retardants, so this one has actually been cataclysmic by comparison. The central plans for the vast government forests has been disastrous, allowing brush to grow wildly under even the sequoia once sempervirens. The sempervirens [always green] sequoia have lived through a thousand years of forest fires and survived before government started planning to save them. Their red wood resists all normal brush fires  and their great canopy of ever green leaves above shade the ground so brush is not naturally lush. Now they are burning up and crashing even in the great forests of Yosemite. The official figure of “fourth worst’ is dangerously deceiving, like official stats in general.

Official stats Distort reality, hide the catastrophes of central planning and all the rest of government cataclysmic effects.