Numbers Racket: Why The Economy Is Worse Than We Know
The Big Picture's Barry Ritholtz has done us all a great favor by posting the pdf of a recent Harpers Magazine article by Kevin Phillips that discusses the many ways Republican and Democratic presidential administrations have gamed the figures that supposedly show us the health of our economy.
As you can see from the graphic posted here, there are many ways to measure inflation. Look at the dramatic difference between the current method of measuring inflation and the methods used before 1983 between 1983 and 1998.
I think it is obvious that the pre-1983 number or the pre-1998 number sure seems to tell a more accurate story about our economy. As Ritholtz explains, stories about this subject are finally beginning to leak into the mainstream media.
The Federal Reserve is now in day 1 of their two day meeting. The statement we get tomorrow, and the minutes we will read next month are likely to be intriguing.Why? The longstanding official myth that inflation is modest, and contained is starting to be recognized for the fraud that it is.
This could be a really rough ride.