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Mere statistics

Mere statistics

For the last half-century, then, we have experienced what might be called “relative energy poverty.”  This is evident in this recollection from Guardian columnist Ian Jack:

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The CPI Revisited And Its Failure To Reflect True Inflation

The CPI Revisited And Its Failure To Reflect True Inflation

The cost of living numbers prepared by the Bureau of Labor Statistics are highly misleading. Currently, the government understates inflation by using a formula based on the concept of a “constant level of satisfaction” that evolved during the first half of the 20th century in academia. This extended into the BLS re-weightings sales outlets such as discount or mass merchandisers with Main Street shops. Those promoting this change claimed it was simply another way to measure inflation and it still reflected the true cost of living.  

 
The fact is, politicians and those behind this system created it as a way to reduce the cost of living adjustments for government payments to Social Security recipients, etc. By moving to a substitution-based index and weakening other constant-standard-of-living ties those reporting inflation have muddied the water as to just how much we are being impacted by inflation. The general argument used to promote this change was that changing relative costs of goods results in consumers substituting less-expensive goods for more expensive goods.
Allowing for a substitution of goods within the formerly “fixed-basket” supposedly allows the consumer flexibility in obtaining a “constant level of satisfaction.” This adjustment to the inflation measure was touted as more appropriate for the GDP concept in measuring shifting demand and weighting actual consumption. Other tricks were also used to give the illusion of less inflation. In cases where the quality of the product are deemed by the government to be “improved” prices in the CPI, calculations are now adjusted lower to offset the higher quality. Extending this idea the Baskin Commission Report, December 4, 1996, actually used steak and chicken for its substitution example.

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Lies, damn lies and statistics: moderating the tyranny of numbers

Lies, damn lies and statistics: moderating the tyranny of numbers

Quoting numbers, whether denominated in dollars, deaths or whatever, has always been a favourite way of adding weight to an argument.

Metrics are gamed in order to increase (or decrease) a given number so as to support an argument, boost a political view, trigger a linked payout or justify a proposed policy or course of action.

The modified metric elevates the case of the proposer above the merely subjective/ rhetorical and lends an ‘objective’ weight to their argument. If, over time, the narrative can be sculpted so that the metric becomes synonymous with something good (or bad), all the better. In this way GDP growth became a proxy for progress – a relation still frequently implied in mainstream discourse.

For those with the requisite level of agency, the rules for the collection of a metric can be changed, often subtly without anyone noticing. Pre-change and post-change numbers can be plotted on the same graph.

The spotlight metric – (i.e. the core metric used at a given time to drive/ justify policy etc) can be changed to suit the convenience of the moment.

The mega-nudge

This traditional art of meretricious metric management has been substantially boosted by the rise of behavioural economics as a ‘discipline’. Nudge units have become super-users for the emerging metrics-scuplting industry. What started as well-intended, often subtle interventions to prompt towards marginal socially-desired behaviour modifications has become a hothouse for heavy handed authoritarian intervention – creating fear as the primary motivating force. Again this is not a new phenomenon, but it has a new face courtesy of social media and the ability of super-digitised communications to facilitate intrusion.

The two ‘industries’ are mutally supporting. As those with power become habituated to nudging the precariat into compliance, they create a series of ‘testimonials’ for the metric-sculpting industry…

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House Price Inflation in CPI is of Course Complete Baloney, but it Accounts for 1/4 of Total CPI

House Price Inflation in CPI is of Course Complete Baloney, but it Accounts for 1/4 of Total CPI

With actual house price inflation based on market data, overall CPI would have jumped by 3.7%. Lifting the cover on the deception to keep CPI low.

For most Americans, housing costs are the largest item in their budget, ranging from 30% to 60% of their total monthly spending. In its Consumer Price Index (CPI) for February, released yesterday, the Bureau of Labor Statistics reported that the costs of homeownership (which the BLS calls “Owner’s equivalent rent of residence”) have increased by just 2.0% from a year ago, and that rents (“rent of primary residence”) have increased by 2.0%. They’re the biggest items among the 211 items in the CPI basket and together account for about one-third of overall CPI. They play a huge role in CPI. So…

Rent inflation of 2.0% year-over-year on average across the US might be roughly on target, from what I can see in other rental data. But homeowner’s inflation of just 2.0%, given the skyrocketing home prices? Ludicrous. In its latest release, the Case-Shiller National Home Price index jumped by 10.4%.

This discrepancy between home price increases and the CPI for homeowners – which has for years contributed to understating the overall CPI – is depicted in the chart of the Case-Shiller National Home Price Index (red line) and the CPI for “owner’s equivalent rent of residence” (black line). I set the homeowners CPI at 100 for January 2000 to match the Case-Shiller index, which is set by default at 100 for January 2000. This allows you to see the progression of both indices on the same axis.

The thus corrected CPI increases by 3.7%.

The “owner’s equivalent rent of residence” accounts for 24.2% of CPI. If it had increased by 10.4%, in line with the Case-Shiller index, instead of 2.0%, the overall CPI would have increased by 2.03 percentage points more

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wolfstreet, wolf richter, cpi, consumer price inflation, house prices, inflation, statistical manipulation, statistics,

How the Unemployment Fiasco in Europe Is Kept out of Official Unemployment Rates

How the Unemployment Fiasco in Europe Is Kept out of Official Unemployment Rates

The massive and once-again extended Pandemic-era furlough programs serve their purpose, but…

In Europe, people who are furloughed are paid under government programs via their employers. Many of these programs have been created during the Pandemic. In theory, these people still have jobs. In practice, they’re not working, or are working heavily reduced hours. But they do not count as “unemployed” and are not reflected in the “unemployment” numbers. So throughout the Pandemic, the official unemployment rates barely ticked up, compared to the last crisis, and remain low for the EU era, despite tens of millions of people who’d stopped working due to the lockdowns (chart via Eurostat):

Under these furlough programs, the government pays companies, who in turn pay employees between 60% and 84% of their monthly wage. In some cases, the workers work fewer hours for less pay; in others, they don’t work at all. The workers take a hit to their income but their jobs remain intact, at least for the duration of the program.

The UK adopted a sweeping furlough program at the beginning of its last lockdown. Businesses can claim 80% of a staff member’s regular monthly salary, up to a maximum of £2,500. The money must be passed on to the employee and can also be topped up by the employer.

But the unemployment rate has begun to rise as people come off furlough, and those whose jobs disappeared entered official unemployment. The unemployment rate ticked up to 4.8% in the three months to September, from 4.5% in Q2 and from 3.9% a year earlier, according to the Office for National Statistics (ONS). In London, the unemployment rate surged by 1.2 percentage points from the previous quarter, to 6%, the largest quarterly increase in unemployment since the ONS started tracking the data in 1992.

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Fooled.

Fooled.

How Gullible Politicians Promoted the Destruction of the Global Economy and Threw Us into the Abyss of Serfdom

https://www.vox.com/2014/11/10/7157997/everyone-is-selfish-when-it-comes-to-politics

Anyone with some basic knowledge in mathematical modeling who had taken a look at the structure of the “Imperial College”-model would have noted the faults of this approach and its exaggerations. The model’s prognosis that the United Kingdom would have to count with more than half a million deaths and a complete overload of its health system reversedthe British government’s earlier decision to use prudential surveillance and specifically targeted intervention and to shift to the full-control strategy, which required massive intervention into the public and private life of the nation. The leaders of other countries that were somewhat still in doubt jumped on the bandwagon and the march into a tyrannical State was programmed.

It was too late when the authors of the model finally revised their original estimate from 500 thousand to 20 thousand and later on lowered this number even more. The governments had already set into motion their emergency plans.

After declaring the coronavirus a pandemic by the World Health Organization (WHO), agendas that had been prepared years ago were set into motion and the state agencies followed the procedures that were prescribed by the International Health Regulations (IHR) as the international legal instrument that is binding on 196 countries across the globe, including all the Member States of WHO.

Even now, months after the outbreak of the virus, the true size of the threat remains unclear. The quantitative basis is still too small to make a reliable projection.

If the modelers and the responsible government bodies had looked at the basic numbers instead of elaborating an apparently sophisticated model, they would have noticed that there has been no noticeable rise of the death rate.

…click on the above link to read the rest of the article…

Lies, Damn Lies and Coronavirus Statistics

LIES, DAMN LIES AND CORONAVIRUS STATISTICS

“Never believe anything in politics until it has been officially denied.” – Otto von Bismarck

‘When it becomes serious, you have to lie.’ – Jean-Claude Juncker, former President of the European Commission from 2014 to 2019

We all lie. Of this there is no doubt. And anyone who tells us otherwise is lying. While there are a billion and one reasons to lie, there is only one purpose…to gain advantage, leverage or to maintain, consolidate or increase power over our children or spouses, other family members, friends or unrelated individuals, groups large and small and even entire nations.

At its most innocuous, a lie may be considered small, kind, even considerate. Often, we tell little ‘white’ lies designed to sooth or placate a loved one or close friend. At its worst, a lie is designed to kill or injure physically, financially, socially or emotionally.

Ultimately, no matter how harmless or devastating it is, a lie is at its root a power play, information warfare employed to disarm, confuse, convince, steal, disable or destroy. We tend to treat lies, especially lies told to others that have an effect far removed from ourselves and our interests, with benign disinterest or even mild amusement. It’s only when the proximity is close or we feel we are targeted do we become righteously indignant and demand justice and restitution.

The dirty little secret is that for far too many of us, we welcome, even beg to be lied to. Not all lies, of course, just those lies and half-truths that enable us to remain safely cocooned within our own inner narrative, our customized worldview or belief system that neatly packages everything into a more easily digestible and comforting ‘reality’.

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Economy Still Falling Off a Cliff – John Williams

Economy Still Falling Off a Cliff – John Williams

Economist John Williams says don’t put too much faith in the good employment numbers that came out last week because “It’s not as happy of a picture as it looks.” Williams is the founder of ShadowStats.com. His calculations strip out government accounting gimmicks to give a more accurate picture of economic data. Williams explains, “What the Fed has done with their easing, according to the Fed, is they created a circumstance of sustainable moderate economic growth. So, they don’t need to cut rates anymore. That’s nonsense. You don’t have sustainable moderate growth. For example, look at this last month, industrial production is in a state of collapse. . . . Manufacturing is negative. . . . Oil production is collapsing year to year as oil and gas exploration has plunged. . . . Retail sales have been overstated in employment . . . . That’s going to be revised lower. . . . We have been getting better numbers as of late, and the economy is still falling off a cliff.”

Maybe that explains the Fed’s panic moves with $60 billion a month QE, which it says is not QE, and extreme intervention in the repo market where the Fed routinely pumps out tens of billions of dollars in liquidly a night. Williams says, “The system is not stable, and it probably is insolvent. They blew the system back in 2007. They gave up on the domestic economy to save the banking system. . . . They spent all their resources propping up the banks, and they are still doing the same thing, and it’s still costing us in terms of economic growth.”

So, the Fed is pumping out billions of dollars every month, and yet, the economy keeps sinking. What does this tell Williams? “The system is not operating properly. These are stopgap measures, stopgap liquidity that the Fed is putting into the system.

Economy Still Falling Off a Cliff – John Williams

Here’s The Proof: How The CPI Is Underrepresenting Food Inflation By 40%

Here’s The Proof: How The CPI Is Underrepresenting Food Inflation By 40%

The “muzzle” on reported inflation has policymakers and analysts perplexed.

As Joseph Carson, former director of economic research at Alliance Bernstein writes in his follow up to a “New Working Theory on Inflation“, numerous economic explanations and theories have been offered, and policymakers are considering making changes to their operating price-targeting framework. Yet, before any decisions are made policymakers should consider all of the factors that could be keeping a “muzzle” on published inflation.

Here are two:

First, a little more than 20 years ago the Bureau of Labor Statistics (BLS) introduced a number of new measurement techniques in the estimation of consumer inflation (see Boskin Commission). So the current business cycle, which started in 2009, is the second consecutive cycle in which these new procedures have been employed.

Statistical changes have been made to account for product substitution, a greater degree of quality changes in products and services and faster introduction of new outlets or ways in which people shop. The introduction of new variables in the estimation of inflation alters the pattern and at various times the rate of change as well.

Prior to their implementation, analysts and government statisticians estimated that the potential reduction in core inflation from all of these statistical changes would range from one-half to a full percentage point. Yet, all of those estimates were looking backwards and there is no guidance from the statistical agencies of the scale of the reduction in reported inflation after implementation.

Odds are high that the impact on reported inflation varies year to year, with some years at the upper end of range of estimate and others at the lower end.

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The Crash In US Economic Fundamentals Is Accelerating

The Crash In US Economic Fundamentals Is Accelerating

When looking at the health of an economic system it is impossible to gauge growth or stability by only taking two or three indicators into account. The problem is, this is exactly what central banks and governments tend to do. In fact, governments and central banks wildly and deliberately promote certain indicators as the signals everyone should care about while ignoring a whole host of other fundamentals that do not fit their “recovery” narrative. When these few chosen indicators don’t read well either, they rig the numbers in their favor.

The most promoted and and by extension most rigged indicators include GDP, unemployment, and inflation. I would include stock markets to a point in this list, but as I’ve always said, stocks are a trailing indicator and never tell us accurately when an economic crash is taking place. If anything, stocks are and always have been a placebo for the masses, a psychological crutch meant to lull them to sleep while the crash begins. Other than that, they have no value in determining the health of the system.  As a lagging indicator, we will cover stocks at the end of this analysis.

GDP rigging is mostly a government affair, as much of how GDP is calculated today includes government spending. So, even though the government has to steal your money through taxation in order to then spend money, government spending is still counted as “production”. This includes programs like Obamacare, which despite assumptions among some conservatives, continues to operate today. “Official” establishment estimates of government spending as a percentage of GDP stand at around 20%. More accurate estimates accounting for ALL expenditures show that US government spending accounts for around 35% of GDP. This is an enormous fraud.

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Importance of Model Building in Economics

IMPORTANCE OF MODEL BUILDING IN ECONOMICS

In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of model building is an attempt to produce a laboratory where controlled experiments can be conducted.

The idea of having such a laboratory is very appealing to economists and politicians. Once the model is built and endorsed as a good replica of the economy, politicians can evaluate the outcomes of various policies.

This, it is argued, enhances the efficiency of government policies and thus leads to a better and more prosperous economy.

It is also suggested that the model can serve as a referee in assessing the validity of various economic ideas. The other purpose of a model is to provide an indication regarding the future.

By means of mathematical and statistical methods, a model builder establishes relationships between various economic variables.

For example, personal consumer outlays are related to personal disposable income and interest rates, while fixed capital spending is explained by the past stock of capital, interest rates, and economic activity. A collection of such various estimated relations—i.e., equations—constitutes an econometric model.

A comparison of the goodness of fit of the dynamic simulation versus the actual data is an important criterion in assessing the reliability of a model. (In a static simulation, the equations of the model are solved using actual lagged variables. In a dynamic simulation, the equations are solved by employing calculated from the model-lagged variables).

The final test of the model is its response to a policy variable change, such as an increase in taxes or a rise in government outlays. By means of a qualitative assessment, a model builder decides whether the response is reasonable or not. Once the model is successfully constructed, it is ready to be used.

Is the mathematical method valid in economics?

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“Everything Is Fake”: Ex-Reddit CEO Confirms Internet Traffic Metrics Are Bullshit

“It’s all true: Everything is fake,” tweeted Former Reddit CEO Ellen Pao regarding a Wednesday New York Magazine article which reveals that internet traffic metrics from some of the largest tech companies are overstated or fabricated. In other words; they’re bullshit.

Pao was responding to a tweet by the Washington Post‘s Aram Zucker-Schariff, quoting the following segment of the article:

The metrics are fake.

Take something as seemingly simple as how we measure web traffic. Metrics should be the most real thing on the internet: They are countable, trackable, and verifiable, and their existence undergirds the advertising business that drives our biggest social and search platforms. Yet not even Facebook, the world’s greatest data–gathering organization, seems able to produce genuine figures. In October, small advertisers filed suit against the social-media giant, accusing it of covering up, for a year, its significant overstatements of the time users spent watching videos on the platform (by 60 to 80 percent, Facebook says; by 150 to 900 percent, the plaintiffs say). According to an exhaustive list at MarketingLand, over the past two years Facebook has admitted to misreporting the reach of posts on Facebook Pages (in two different ways), the rate at which viewers complete ad videos, the average time spent reading its “Instant Articles,” the amount of referral traffic from Facebook to external websites, the number of views that videos received via Facebook’s mobile site, and the number of video views in Instant Articles.

Can we still trust the metrics? After the Inversion, what’s the point? Even when we put our faith in their accuracy, there’s something not quite real about them: My favorite statistic this year was Facebook’s claim that 75 million people watched at least a minute of Facebook Watch videos every day —

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Minority Report Comes To Life: UK Police Will Use AI To Prevent Crime

With increasing availability of information and new technologies, West Midlands Police in the metropolitan county of West Midlands in England, has taken a page from the 2002 American neo-noir science fiction film, Minority Report, and will soon deploy artificial intelligence to stop crime before it happens, New Scientist reveals. 

The “pre-crime” software, called the National Data Analytics Solution (NDAS), uses a blend of AI, citywide smart cameras, and statistics to try to evaluate the risk of someone committing and or becoming a victim of a violent crime.

West Midlands Police has taken the lead on the project and will finish the prototype system by the end of 1Q 2019. Eight other police forces across the country are involved in the development, including London’s Metropolitan Police and Greater Manchester Police. NDAS will be piloted in the Midlands district before a nationwide rollout. One of the main reasons behind predictive policing – is a cost-savings tool for law enforcement agencies that have been dealing with funding issues, said Iain Donnelly, the police lead on the project.

Donnelly insists NDAS algorithms will sniff out already known criminals, and divert them with “therapeutic interventions,” such as “support from local health or social workers” to avert a crime.

West Midlands Police used data and statistics from past criminal events to identify 1,400 potential indicators for crime, including 30 important ones. Machine learning algorithms then took the data points and learned how to detect crime while analyzing video from smart cameras.

Predictive policing is based on prior criminal stats, including stops, arrests, and convictions, and it is incapable of expanding the pool of suspects beyond the database.

Predictably, the Alan Turing Institute found “serious ethical issues” with the NDAS, warning the program could have good intentions but “inaccurate prediction” is an ongoing concern. 

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Western Media Make One Death a Tragedy, Millions a Statistic

Western Media Make One Death a Tragedy, Millions a Statistic

Western Media Make One Death a Tragedy, Millions a Statistic

The Western media coverage devoted to the murdered Saudi journalist Jamal Khashoggi proves the cynical adage that one person’s death is a tragedy, while millions of deaths are a mere statistic.

During the past four weeks since Khashoggi went missing at the Saudi consulate in Istanbul, the case has been constantly in the news cycle. Contrast that with the sparse coverage in Western news media of the horrific Saudi war in Yemen during the past four years.

The United Nations has again recently warned that 16 million in Yemen were facing death from starvation as a result of the war waged on that country by Saudi Arabia and its Gulf Arab partners, with the crucial military support of the US, Britain and France. That imminent death toll hardly registered a response from Western media or governments.

Last week, some 21 Yemeni workers at a vegetable packing plant near the Red Sea port of Hodeida were killed after US-backed Saudi warplanes launched air strikes. Again, hardly any condemnation was registered by Western governments and media pundits.

Admittedly, some politicians in the US and Europe are lately expressing disdain over the Saudi-led war and the possible culpability of Western governments in crimes against humanity.

Nevertheless, in proportion to the public concern devoted to the killing of Jamal Khashoggi there is a staggering indifference in relation to Yemen. How is possible that the fate of one man can provoke so much emotion and angst, while millions of children in Yemen appear to be shrugged off as “collateral damage”.

Partly, the circumstances of Khashoggi’s murder by a Saudi death squad are more easily visualized.

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Lies, Damn Lies & Statistics: How the US Weaponizes Them to Accuse  China of Debt Trap Diplomacy

Lies, Damn Lies & Statistics: How the US Weaponizes Them to Accuse  China of Debt Trap Diplomacy

With China and Russia named as the two greatest threats to continuing American hegemony end of last year, the velvet gloves have come off the Washington establishment, baring their knuckles against the Middle Kingdom in plain view of the entire world. In recent weeks, anti-China rhetorics and vitriol emanating from the Oval Office and Capitol Hill have reached feverish, even hysterical, proportions.

The total warfare on all fronts is being waged against Beijing, assisted and amplified by the corporate media. The empire’s propaganda machine is in overdrive, churning out fake news and lies on a 24/7 basis to smear and demonize China. One of such lies is the alleged neo-colonization of developing countries through debt traps sprung by China.

This article puts together all the numbers in four countries – Sri Lanka, Pakistan, Maldives and Malaysia – which are misrepresented by the western press as victims of China’s “debt trap diplomacy”.

SRI LANKA

Lie : Western media have spun tall tales that Sri Lanka, with Chinese loans up to its eyeballs, used 90% of government revenue to service Chinese debts and was forced to “cough up a port” to Beijing.

Fact : China accounted for only ONE-EIGHTH of Sri Lanka’s $65 billion debts. Beijing didn’t demand immediate payment of loans falling due from Colombo. Instead, China acceded to Sri Lanka’s request to restructure the loans. Colombo OFFERED to settle the loans past due by giving a 70% equity in the LOSS-MAKING Hambantota port to a Chinese company. To bring the port up to the operational level, the Chinese company has to spend another $700 million. No competing offer from other parties to take over the port was received before and after the restructuring proposal was completed.

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