According to Gallup, 42 percent of Americans say that they are worse off financially now than the year before. This is rather remarkable, considering that according to the Bureau of Economic Analysis, we are informed that the U.S. economy has recovered, the unemployment rate has continued to fall, inflation is low, and the stock market is hitting all-time highs.
So, how is it possible that so many people are feeling financially pinched when so many economic indicators are not merely positive, but downright bubbly?
The reason is that the economic indicators have been so heavily gamed that their connection to the actual economy is largely imaginary. They are essentially fiction. One would be almost as well served to read a Harry Potter novel as to read any of the self-serving reports put out by the BEA, the IMF, or the Federal Reserve.
For example, the reason unemployment has “fallen” is not because there are more Americans working in more jobs than before. In fact, a lower percentage of Americans are working than any time since 1978. The way this has been concealed is by continually dropping unemployed workers out of the labor force, thereby creating a situation where statistics from the past cannot be meaningfully compared to the current numbers. Forbes reported on the BLS shenanigans recently:
Since 2008, the civilian non-institutional population has jumped by 11.9 million, yet the civilian labor force has only increased by 1.1 million, according to annual figures published by the Bureau of Labor Statistics…. If the labor force participation rate had held steady at its 2008 level, unemployment would be 11.2 percent instead of the current reported rate of 6.7 percent.
Of course, an 11.2 percent unemployment rate would make the Obama administration, Congress, and the Federal Reserve look bad, since they have been promising an economic recovery since 2009. So, the labor force participation rate is lowered, which reduces the size of the labor force to which the numbers of employed workers are compared, and the unemployment rate falls. The media dutifully reports the good news and no one is the wiser, except, of course, for the millions of unemployed Americans and their families.
But don’t make the mistake of thinking that this is something that electing Republicans can fix. Republicans are part of the problem here, and it is more likely that Vladimir Putin will march naked in a gay pride parade at the Sochi Olympics than a Republican president will do anything to address the matter of statistical fiction in the various federal agencies. Both parties created this system, both parties benefit from it, and neither party intends to do anything about it.
In the Soviet Union, the workers pretended to work and the government pretended to pay them. The USA hasn’t reached that point yet, but it’s not hard to imagine how one might eventually come about.