Thursday, August 13, 2009
Controlling the means by controlling the meaning of production
(You can subscribe to the King Report for fair recompense by contacting Bill King at email@example.com ...-AM)
Yesterdays' King Report
U.S. productivity rises at fastest pace in six years ...so what. Over the past decade productivity gains have NOT been accompanied by higher real wages and living standards – a first in US history. Long-time readers know our crusade to debunk the ‘Great US Productivity’ miracle, which rests on faulty, if not fraudulent US economic data that understates inflation, which overstates production(GDP). Years ago (Sept. 2003 IWRC), Sen. Robert Bennett (R-UT), a former banker, told CNBC that when Easy Al saw that productivity numbers were not showing bigger gains, the worst Fed CEO in history went to the BLS and told them ‘this cannot be true!’ Bennett added, ‘and do you know what, when the BLS reworked the numbers they found huge productivity gains.’
We literally jumped out of our chair when the naive senator unintentionally suggested that Easy Al had the BLS cook the books so Al could keep pumping credit and paper over declining US living standards due to the massive transfer of wealth abroad.
We elaborated on Bennett’s unintended expose in our ensuing missive. A day or two later we got a call from a West Coast Democratic Senator’s chief of financial affairs.
Productivity is defined by the BLS as ‘output per hour of all persons in the nonfarm business sector.’The BLS reports that hours worked plunged at a 7.6 percent rate in the second quarter and unit labor costs declined 5.8 percent, the biggest decline since the second quarter of 2000. By understating inflation and overstating GDP/output, productivity soars when hours worked plunges.
And didn’t we just learn that GDP had been overstated the past few years?
Todays' King Report:
The Washington Post stumbles into the truth but doesn’t recognize it:
'A Recovery Only a Statistician Can Love': Data That Point to Improving Economy Also Suggest Continued Pain for Many.
The pile of economic data indicating that the worst of the recession is over just keeps growing… But the same data also explain why any recovery isn't going to feel like one anytime soon for millions of Americans. Its existence will be confirmed by statistics, but, over at least the next year, the benefits are unlikely to materialize in the form of higher wages or tax receipts or more jobs. "It's going to be a recovery only a statistician can love," Wells Fargo senior economist Mark Vitner said. As a result, many economists said, a jump in productivity increases the odds that the recession will be followed by a "jobless recovery," similar to what followed the 2001 recession. That downturn had similar productivity gains… [Okkum’s Razor – Perhaps the government GDP data is wrong?]