Sunday, June 8, 2008

How to Myth-Jack the Nation: by the numbers

Democracy Now! May 6, 2008

AMY GOODMAN: We’re talking to Kevin Phillips. His latest book is Bad Money. And you have a piece in the latest issue of Harper’s magazine: “Numbers Racket: Why the Economy Is Worse Than We Know.” Who’s covering up, Kevin?

KEVIN PHILLIPS: Well, the political system has basically found it comfortable to let the data shade in the make-believe. And I wouldn’t single out either party, and that’s actually part of the difficulty. The pot can’t talk about the kettle, and the kettle can’t talk about the pot. There are some signs, perhaps, that Barack Obama is freer to talk about it. His chief economic adviser is somebody who has talked about the government cooking the books back earlier in this decade.

I think the government has cooked the books, and as a result, we get this unrealistic view of where the economy is. For example, they pretend that inflation is in the two- to three-percent range. Barron’s magazine did a survey of money managers, and their average estimate of what the CPI would be later this year was 2.7, and for 2009, at the end of the year, 2.8. Now, that’s ridiculous. We’re starting to see global commodity inflation. Foreign investors believe that the inflation rate, including food and energy, is six to nine percent, not this nonsense about 2.6 or 2.7 or 2.8 or 2.9.

Now, the real meaning here is that when you look at the growth statistics for the economy, the GDP figures, you have to take—to get the real figures, you have to take nominal gross domestic product growth, and then you subtract for inflation. So if you’ve got nominal growth of four percent and you subtract for inflation, you still would get a positive number if you use the number of, you know, 2.6 or three percent inflation. But if you’ve got nominal growth at four percent and inflation is really six to nine percent, then you’ve got big-time negative growth, and the economy is contracting.

The government talks, you know, like they used to say in the Western movies, with a forked tongue, but so does the financial sector. All the questions about whether the ratings were really AAA or they were really something lower than BB on the securities that were imploding, no honesty in economic data or ratings or descriptions of what really goes into a financial instrument, and this has the American people at some degree of peril, because foreigners don’t really believe what we say anymore.
Sounds to me like the MO of EHMs. Meanwhile, we subsidize companies making record-breaking profits, and spend more on our military than the entire rest of the world spends on defense. Isn't this how the economic hitmen work?

It's also the practice of myth-jacking. We're lured aboard a supposedly safe ship of state by a deceitful narrative, only to find ourselves in the hold of modern-day slavers and about to be sold down the river. This is how myth-jacking works: Conflate yourself with the Great Cosmic Machine, fake the numbers in your favor, and then jack the nation to hell, making sure to stick the suckers whom you supposedly serve--aka We, the People--with the bill.

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