{"id":34969,"date":"2018-06-10T09:25:14","date_gmt":"2018-06-10T14:25:14","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34969"},"modified":"2018-06-10T09:25:14","modified_gmt":"2018-06-10T14:25:14","slug":"is-the-u-s-in-a-depression-how-john-williams-became-americas-most-important-statistician","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34969","title":{"rendered":"Is the U.S. in a depression? (How John Williams became America\u2019s most important statistician)"},"content":{"rendered":"

Is the U.S. in a depression? (How John Williams became America\u2019s most important statistician)<\/a><\/h3>\n

America\u2019s economy has been progressing steadily. First quarter real GDP growth came in 2.2%. The official unemployment rate is 3.8%. Inflation, according to the Fed\u2019s preferred measure is 2%.<\/p>\n

But how accurate are those numbers?<\/p>\n

\u201cNonsensical,\u201d says John Williams, founder of Shadow Government Statistics, who has been tracking U.S. government data for more than three decades.<\/p>\n

Williams reckons that, using traditional calculation methodologies, true inflation is likely running above 6% and the unemployment rate over 20%.<\/p>\n

Most importantly, Williams\u2019 calculations suggest that the US economy has been in a two decade-long depression. His line of reasoning is worth a look.<\/p>\n

Underestimating inflation <\/strong><\/b><\/p>\n

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.<\/p>\n

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement <\/em><\/i><\/a>, also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.<\/p>\n

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made \u201cimprovements\u201d in the way they calculated the data.<\/p>\n

These adjustments (such as hedonic adjustments to inflation calculations, or not counting people who have stopped looking for work as part of the labor force) inevitably cast the government\u2019s numbers in a more favorable light.<\/p>\n

However, mainstream media journalists tend to have a poor grasp of mathematics. They were thus unable to grasp the depth of the problem, let alone explain the issues to the public.<\/p>\n

Politicians have thus been able to fudge economic data openly. For example, the chart below shows U.S. GDP growth as measured by official sources.<\/p>\n

The following chart (produced by Williams) shows GDP growth as calculated using a GDP deflator, corrected for an approximately two percentage point understatement.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Is the U.S. in a depression? (How John Williams became America\u2019s most important statistician) America\u2019s economy has been progressing steadily. First quarter real GDP growth came in 2.2%. The official unemployment rate is 3.8%. Inflation, according to the Fed\u2019s preferred measure is 2%. But how accurate are those numbers? \u201cNonsensical,\u201d says John Williams, founder of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,353,426,459,13228,721,6355,2084,824,3650,843],"class_list":["post-34969","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-gdp","tag-inflation","tag-john-williams","tag-peter-diekmeyer","tag-shadow-stats","tag-sprott-money","tag-statistics","tag-unemployment","tag-us-federal-reserve","tag-us-government"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34969"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34969\/revisions"}],"predecessor-version":[{"id":34971,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34969\/revisions\/34971"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}