Lunatic Fringe Alert: Government Statistics Edition

Longtime reader Ricardo (aka Dick/DickF/RicardoZ) writes:

…Our government is doing a serious disservice by falsifying the employment condition in our country. Policy changes that could actually help are being delayed with false information.

(second sentence added 11/8 -mdc)
If the secret government was really serious about falsifying the data to make it look better, they could for sure do a better job…

But seriously, how can economic discourse proceed if all the inconvenient data are disbelieved? Fortunately, Floyd Norris is on the case, as is Paul Krugman. See also Econbrowser posts [1], [2], and [3].

Update, 11/8 11:40AM Pacific: Ricardo states the government is falsifying the data. But the BLS reports many series. I downloaded on FRED just a few, before I got tired, and here are the unemployment rates. What series would Ricardo want reported before he didn’t accuse the government of suppressing the truth?


Update, 11/9, 8AM Pacific: I am reminded that 5 years ago, Ricardo in his DickF incarnation showed up in a similar context, in this post. Here is a snippet of DickF‘s comment:

Also any time numbers are manipulated by government there is a political element involved. The whole reason the numbers are manipulated is to the will be “more normal” but who decides what is normal? In the government political bureaucrats who know their jobs depend on pleasing the politically connected.

If that is not an allegation of falsifying data, I do not know what is.

155 thoughts on “Lunatic Fringe Alert: Government Statistics Edition

  1. Bruce Hall

    From Mr. Norris’ article: “All those forecasts turned out to be wrong. Does that mean the forecasters were mistaken? Some would rather think it shows the statistics are being faked.”

    That’s the funny thing about statistics and forecasts. When actual/newer data become available the statistics can change and forecasts can look foolish. Seasonal data is a good example of statistics changing as new actual data is added. Sometimes the basis for seasonal patterns gets disrupted or fundamentally altered and it takes awhile for seasonal adjustments to more appropriately adjust. Likewise, forecasts can be tricky. You need a lot of assumptions to be correct to be close to achieving “near miss” status for economics forecasts. One can project the number of new jobs based on assumptions that don’t pan out. Is the forecaster lying? Only if he knowingly used erroneous assumptions. Most of the time it’s just “sh*t happens.”

    Unemployment rates are slippery little fellows. You’ve got surveys that never have perfect samples and then there are those “caveats” that, like factors of seasonality, can just make the apparent seem obtuse. You know, change the divisor in the calculation and the rate changes. Change the mix of full versus part time employment and good news becomes depressing news. As the saying goes, “all things being equal…”, but they never are. What’s important? The absolute value? The rate of change? Historical comparisons? Who is governor? Who is president?

  2. The Rage

    Dick sounds mad. When you don’t get what you want, I guess you get mad. Reminds me of communists.

  3. Ed Hanson


    You need to just stop the personalized attacks. One suggestion, read closer what people write. Another suggestion, take a step back and a deep breath when you feel a strong personal emotion envelop you.

    In this case read what Ricardo wrote. “Our government is doing a serious disservice by falsifying the employment condition in our country.” I point out to you that the key word you missed/or and badly misinterpreted is “condition.” You chose to define “condition” as data. And then continued, wrongly and maliciously, to accuse Ricardo as saying the government is falsifying data. Ricardo wrote no such thing. Read his complete comment which I will quote, in full, below.

    “There is a decline in a percentage but there is no significant improvement in employment. Employees are still leaving the workforce with African-Americans seeing 114,000 dropping out to go on government assistance. This is a double hit to the economy. Not only do we lose productive employees who add to our economy we add the the rolls of those who are pulling resources out of the economy for unproductive activity. Our government is doing a serious disservice by falsifying the employment condition in our country. Policy changes that could actually help are being delayed with false information.”

    I find his comment both important and thoughtful, but can understand that some may disagree. What has no place in the discussion is the personal vindictive comments such as “Lunatic Fringe Alert.”

    1. dilbert dogbert

      MMMMM? “the key word you missed/or and badly misinterpreted is “condition.” Did you miss the word falsifying?

    2. Robert Hurley

      Ricardo’s messages are rarely thoughtful. Thoughtful is dealing with facts and putting forward arguments supported by those facts. Absent that, I am not sure how we can have a reasonable discussion.

    3. AS

      Good points!
      Regarding job conditions, last night on PBS, Paul Krugman said that he was not aware that a person with two part – time jobs totaling 40 hours per week would be counted as a full time employee.

    4. Menzie Chinn Post author

      Ed Hanson: Thank you for the advice, and your rousing defense of Ricardo.

      You quote Ricardo’s comment in its entirety. Look to Ricardo’s last sentence: “Policy changes that could actually help are being delayed with false information.” I think you have made an excellent point, and I have added that sentence to the quote.

      Now, look up the synonyms for “information”. Here is one entry: “details, particulars, facts, figures, statistics, data”.

      So, the point you make is a distinction without a difference. And the phrase “false information” makes clear what Ricardo wishes to convey. Hence, I would say I have perfectly perceived Ricardo’s meaning, and have characterized appropriately.

      1. Ed Hanson

        Reply to Dilbert and you too Menzie, and also Hurley,

        Dil, you have concentrated on the word falsifying, Menzie you have moved on to word, information, And Robert, you wonder how to have a reasonable discussion. The answer for each of you is the same. It is not by creating unnecessary personal attacks by the use of words like lunatic and fringe and alert, but just a simple query of what Ricardo meant by the words condition, falsifying and information. That is how conversation becomes reasonable, and civilized, not vitriolic. So put the dictionary away, quit wondering, and have that thoughtful conversation.


        1. macroduck


          I don’t know whether you are defending Ricardo to provide Ricardo more traction (that is to say, because you hate America) or out of a misplaced sense of civility. Either way, you are supporting an intentional degradation of the discussion here. I suppose there is some chance that Ricardo actually believes what he writes, in the same sense that enough monkeys with enough typewriters could write the works of Shakespeare. Far more likely is that Ricardo doesn’t care at all that he’s spouting nonsense. The clearest, simplest explanation for his behavior is that he is trying to confuse less sophisticated readers so as to leave them vulnerable to Fox News and its ilk.

          Harry Frankfurt has written an essay entitled “On Bullshit” that is well worth reading in this context. If you don’t hate America, you really need to read it before running to the defense of the likes of Ricardo. Frankfurt has made it available as a free PDF, so no excuses for not reading it.

  4. DeDude

    It is pretty much impossible to discuss with people who dismiss data they don’t like and make up data in support of what they want to believe. This has pretty much been standard fare for the lunatic fringes as long as I can remember. The scary part is that this type of behavior has invaded a substantial fraction of the GOP – and we just put them in charge of legislating policy.

    1. Hans

      Dedude, speaking of the “lunatic fringe” how are things at The View?

      Are they still banning Conservatives there?

  5. dilbert dogbert

    Maybe Ricardo should do another name change to Ricardoh. As in the Simpson’s Homer’s famous Doh!

  6. Ricardo

    There are those who seek the truth of economic theories as they relate to prosperity, increased value, and relief of the uneasiness of men. Then there are those who are more interested in calculations being robust than truthful.

    1. Tom G.

      Your first sentence applies to people like Professor Chinn, Krugman, etc. Your second sentence applies to people like Arthur Gaffer, Sam Brownback, etc.. I’m tired of your nonsense, Ricardo. You do nothing but lie.

  7. ray lapan-love

    In the JOLTS data, are those who were once self-employed being accounted for, and what about all of the employees who are fired, or not eligible for unemployment for other reasons? I was denied unemployment because my employer refused to pay me for the last 2 pay periods during which I worked. Thus, I was ineligible due to my not ‘receiving’ payment during the required period, this though being rather odd considering that the Texas Workforce Commission found that my employer had violated the ‘Texas Payday Law’, and I was eventually able to receive payment, but not during the ‘necessary’ time period. And before that I was self-employed, so, was I ever counted as unemployed?

    Also, are the jobs which are listed and counted as jobs being checked to find out how many are actually jobs, and how many might be better categorized as ‘scams’. I’m not sure what qualifies as a job, but I do know that a significant percentage of what is being advertised as job opportunities is actually bs.

    1. spencer

      The data on people getting unemployment compensation is completely independent of the data on unemployment and is not used to calculate employment and unemployment.

      To answer your question,the BLS does two surveys of employment.
      One, is to ask firms how many people are working for that firm– otherwise known as payroll employment.
      According to the information you provided I’m quite sure the firm you worked did not claim you as an employee. Consequently you were included in the unemployed.

      Second, the BLS asks individuals if they were employed and how many hours they worked in the relevant survey week.

      According to the info you provided if you had been included in the sample you would have correctly reported if you worked or not.

      Remember, the two surveys are statistical samples,so even if you were not included in the sample the overall accuracy of the sample would not be impacted.

      Note, that the statistical methodology used by the BLS is even much more accurate than the poling surveys about the election.

      Interestingly,this dual survey makes the employment report one of the best economic releases around because you can check one against the other to see if they are telling the same story, which they almost always do– for example the y/y change in the payroll and household employment data is almost always the same even when their monthly numbers are very volatile.

      The info you provided on how your former employer treated you demonstrates to me that you have no understanding how statistical sampling works are how the unemployment rate is determined. Based on that info I would ignore your belief that the data is manipulated.

      1. ray lapan-love

        I don’t say or suggest that the data is “manipulated”. And, the firm I worked for did in fact report my employment to the IRS, and that was ultimately what allowed me to prove that I had worked during the pay-period for which I had not been paid. But, other than that, unless there was a BLS survey, the Dept. of Labor wouldn’t have known that I existed at all. This in part because before that I owned a small business, and as I said, I don’t remember any surveys (my wife may have gotten that call?). And what does the information “provided on how your former employer treated you demonstrates to me that you have no understanding how statistical sampling works” have to do with any of this. My employer simply didn’t have the money. And the simple fact that my entire comment was a genuine effort to better understand how the % is established… says that I “have no understanding how statistical sampling works”. So why the rancor?

  8. Sebastian

    Ricardo said: “There are those who seek the truth of economic theories as they relate to prosperity, increased value, and relief of the uneasiness of men. Then there are those who are more interested in calculations being robust than truthful.”

    Whenever I have engaged posters with this point of view, the “truth” always seems to be objectively unverifiable. Instead, it seems to be “truthy.” The widely-used economic measures are allegedly being manipulated for political gain, but whenever I ask what they think is a genuinely accurate indicator of economic conditions (so that it can be objectively studied over multiple expansion/recession cycles for value), they never have an answer.

    And meanwhile, they take that same “flawed”, government-manipulated data that they, in turn, manipulate for their own purposes so it will be “more accurate”, to “prove” their point of view. It’s the debunked ShadowStats all over again.

    If they offer anything at all.

    “Lunatic fringe” may sound like flame-thrower language, but it’s actually close to the mark.


  9. Blissex

    I think that equating “condition” and “information” with “data”, and writing “data” when someone wrote “condition” and “information” is a regrettable misrepresentation, and I sorry that our blogger uses words in that way.

    That USA government “headline” statistics are misleading is a widely held opinion and it seems reliable to me; the raw data probably is not yet falsified (by the government at least) but what the USA government reports *prominently* is not the raw data, but a number of estimated indices, computed from the raw data using often very biased by questionable methodologies; it is “astonishing” that virtually all changes in methodologies in the past few decades have the effect to make them look better than otherwise.

    Indices like the nominal GDP, headline unemployment, headline inflation, seem to be significantly unreliable because they are too biased by those “clever” methodologies. The private sector is not better, as headline indices like SP500 and DJIA, or financial industry reported assets and profits, are also based on “clever” methodologies. The main reason why all that cannot be called fraud is that it is all legal and disclosed in footnotes; but the well compensated heralds of the “sell-side” somehow rarely if every point at those disclosures and mention that the “headline” figures have changed meaning so significantly over time and nearly always in a flattering way.

  10. Joseph

    Ricardo: “Employees are still leaving the workforce with African-Americans seeing 114,000 dropping out to go on government assistance.”

    When Ricardo talks about false information, what about his whopper above in the same comment where he complains about falsification? As has been pointed out to him before, you don’t compute labor participation by subtracting two months of “Not in Labor Force” numbers. That is simply mathematically wrong and Ricardo refuses to learn from his mistakes no matter how many times his mistake is pointed out to him.

  11. Blissex

    «African-Americans seeing 114,000 dropping out to go on government assistance. This is a double hit to the economy. Not only do we lose productive employees who add to our economy we add the the rolls of those who are pulling resources out of the economy for unproductive activity.»

    That’s a tiny effect. The impact of higher education and imprisonment (and disability welfare) on the reported unemployment rate is far higher.

    Starting some decades ago one after another most first-world governments adopted a “clever” policy of boosting and lengthening higher education (and making it easier for the unemployed to get disability welfare), and the USA government also opted a policy of boosting and lengthening imprisonment.

    Boosting and lengthening higher education and imprisonment have to say the least “controversial” positive consequences (beyond a low threshold) other than a massive reduction in reported unemployment numbers, as students and prisoners don’t count as unemployed; and the definitions of “unemployed” have been “cleverly” changed over time to “improve” that effect even more in various countries.

    Boosting and lengthening higher education numbers has not just the amazing advantage of reducing reported unemployment by probably around 1-3 percentage points, but also of boosting *employment*: because students usually borrow a lot of money to pay the wages of higher education academics and staff, and of financial sector workers processing the loans. From a realistic point of view the main and surest effect of bigger higher education is to turn higher private debt into lower reported unemployment.

    What’s not to like? 🙂 It is just one case of what a perceptive UK academic calls “private keynesianism” which is the set of policies of many “anglo-american culture” governments that encourage or push household to become more indebted so they can spend more, thus sparing governments the embarrassment to tax or borrow more in order to spend or invest more themselves. With the result that in “anglo-american culture” countries private debt has been growing far faster than government debt and often to absurd levels, thanks often to the debt-collateral spiral (another key policy of many “anglo-american culture” governments).

    As mentioned before, it is all above board, all disclosed, so it is technically not fraud.

  12. ray lapan-love

    I honestly don’t know just how objective or truthful government data is, or isn’t. But, I have found that Upton Sinclair said something very true: “It is impossible to get a man to believe what his livelihood depends on his not understanding”. It follows too that these Econ blogs tend to be rife with material that someone’s livelihood not only “depends on”, but also that their sense of self worth depends on too. So it is easy to understand how so many, prefer to believe that which they ‘need’… to be objective and factual, but isn’t, yet is that which is easily made to appear as factual. And of course ambition is so infamously blinding that it warranted a cliche.

    I do however know, honestly, that I’ve met an alarming number of people like myself who were small business owners that lost their businesses and then found themselves unable to find employment. And so far as I know, none of us are being included as officially unemployed. We of course hear about those who have gone off the roles, but nothing about those who were not eligible for unemployment for a variety of reasons.

    I’m also curious about how so many more women could have joined the workforce since the 70s and then only had an impact on the participation rate of 5% or so. Surely an increase of more than 5% occurred. So it would seem that the percentage of men must have decreased, and this assumption is consistent with what my life experience suggests, that being, that the common occurrence of men working for themselves. But, as I said above, many of us lost our businesses either as the recession swept through, or as a result of the slower demise caused by NAFTA, or, as in my case, due to both.

    So, is there a lost cohort? A group including millions of men perhaps, many of whom worked in the construction industry as sub-contractors. Did economists notice for instance that since the 70s the employed construction worker has been replaced by 1099ers? And that this practice of ‘subbing’ has become the norm in wide range of occupations? Did the cost of health insurance play a central role here

    Anyway… I honestly don’t know just how ‘objective’ economists tend to be, but I agree that the following seems very common “Then there are those who are more interested in calculations being robust than truthful”. Maybe though I just don’t know enough about the field of Economics?

    1. steve

      There are three things to note that may help you. First, when people like Ricardo have their own team in office, they usually don’t question the data. They use it, when convenient, to prove that the policies implemented by their team have been successful. This selective criticism should make you wonder whether this is tribalism or a real questioning of the facts.

      Next, when other groups try to collect relevant data they tend to support the findings of the FED, BLS, etc. Look at the billion price project. Maybe not Ricardo, but I can guarantee that some of those with whom he is the most ideologically comfortable claim that the govt is making up and manipulating inflation data (see Welch). However, the billion price project shows they are wrong.

      Last of all, it is very easy to make claims and then not have to offer supporting evidence. There i son shortage of conservative and libertarian economists. No shortage of money available and going to think tanks and writers. They could easily collect and publish their own data. They do not. That should tell you something.

      1. Blissex

        «claim that the govt is making up and manipulating inflation data (see Welch). However, the billion price project shows they are wrong.»

        But this statement is laughable if only because most service prices do not appear online, and currently 80% of the GDP is services.

        But it is laughable also because it is based on a clever and popular prevarication by sell-side Economists as to what the word “inflation” means, which requires a bit more explanation.

        According to Milton Friedman the technical definition of “inflation” is a purely monetary phenomenon, where the price of money goes down wrt every other price. Otherwise there is no “inflation”, because even if most prices go up a lot as long as a few go down or remain constant there is just an adjustment of relative prices, that is redistribution of income, not “inflation”. Therefore according to the definition given by Milton Friedman and recently endorsed by Brad DeLong and Noah Smith what matters as to detecting “inflation” is the *number* of prices that have gone up, not their *weight* (by quantity). Also, according to Milton Friedman’s definition there is only one overall “inflation”, that of the “quantity of money”, because MV = PT (delta M = delta P after subtracting the effect of changes in V or T).

        However, for vulgar citizens, “inflation” is the increase in cost of living, that is the increase total price of the yearly “basket” of purchases for a given household or person. Therefore there are as many “inflation”s as there are “baskets”. The change in cost of living change for the “basket” bought yearly by someone on $30,000 a year is usually very different from that of the yearly “basket” of someone on $300,000.

        The Billion Prices Project makes available a Milton Friedman style of “inflation” for prices of goods, mostly manufactured goods, which exist in an enormous number of varieties, and most of whom are priced based on the wages of labor in China. In other words it is a measure largely of how many of the types of goods available online are imported from China, and the higher the percentage, the lower it goes. In particular it is also a summary of prices of mostly manufactured goods, and probably high-tech goods are a large number of the goods sampled.

        So it has nothing to do with the notion of “inflation” defined according to common sense as the increase in the price of a constant yearly “basket” of goods, and even not very much to do with the definition by Milton Friedman.

        Now there is an interesting argument here: the BPP publishes graphs of their index vs. CPI, and usually they are fairly close. But BPP is mostly (because of the point above) an index of import prices for technology goods, and the yearly “basket” purchased by most households includes mostly services, which have greatly increased in price over the years.

        How is it possible that the “headline” CPI is then close just to the average of prices of goods imported from low wage countries, when the fast increasing prices of services mostly produced in the USA has hit households and persons hard? I guess that this is achieved thanks to the many (fully disclosed!) “methologies” that are used to ensure that the CPI is “more accurate”, from quality adjustments to astutely designed mathematical formulas. Nearly all those “methodologies” make the CPI substantially smaller than it would otherwise be. Some of the effects:

        As usual, shysterisms, dissembling, prevarication (all fully disclosed in methodology footnotes), are not fraud or falsification.

    2. macroduck


      If it’s any help, you are “counted” as unemploy (U3) if you are of working age, not institutionalized and seeking work, and are contacted in the BLS household survey. Often, there is confusion between the U3 definition and qualification for jobless benefits. You are almost certainly not qualified for benefits because you were a business proprietor.

      1. ray lapan-love

        Thanks duck,

        So the BLS checks census numbers, and then assumes that anyone of working age and unemployed is looking for work? Otherwise, I can’t figure out how it is done. Here in Texas for instance, the state employment service is only used by persons who are required to do so in order to receive benefits. Everyone else, and anyone serious about finding a job, uses Craig’s List or some other internet service, or they search in person, the reason being that the state agency has only a sparse offering of low-paying jobs, and the process is rather time-consuming. And so, as I suggested above, anyone previously self-employed, fired, just entering the workforce or returning from outside the country, or whatever, is likely not registering as unemployed in any way that I can think of?

        1. spencer

          Sorry, your statement is incorrect.

          The household survey is the BLS going out and asking a representative sample of people various question about their work such as did you work, how many hours, self employed or not, etc.,etc..

          The Representative sample is changed regularly to reflect changes in the population revealed by the census.

          The BLS household survey only counts as unemployed people who told them they were unemployed — that is what the unemployment rate is based on.

          Before you go around demonstrating your ignorance, maybe you ought to go to the BLS website and read their explanation of how the numbers are derived.

      2. ray lapan-love

        Anyway duck…

        I owned and operated a small business for 22 years and I never had any more than a few employees at any given time but… I did have workers quit occasionally, and I fired a few. But, I don’t remember ever completing any BLS surveys, nor did I ever report anyone’s unemployed status. Plus, when my business failed, I didn’t inform any government agency that I was searching for a job. So, how could every unemployed person get counted? Then too, how could the BLS data include high-school grads and drop-outs, do they perhaps look at college enrollment numbers?

        1. Menzie Chinn

          Ray Lapan-Love: The Current Population Survey is…a survey. Not everyone is counted — otherwise it’d be a census. Googling led me to this link.

          1. ray lapan-love

            Thanks Menzie. I suppose I was confused due to the regular announcement of how many workers enrolled for unemployment benefits and etc.

  13. Rick Stryker

    This is yet another absurd post. I’m not sure what Menzie thinks he’s accomplishing by publicly ridiculing his readers with ridiculous charges.

    Ricardo is obviously not claiming that the secret government is falsifying the data. He is saying that the data is giving a false picture of the state of the economy, which is a very different point. Ricardo is talking about the fact that a low unemployment rate can give a misleading picture of the health of the labor market if lots of people have dropped out of the labor force. Ricardo’s comment is just a reaction to an article on the conservative news service about the employment report. That’s where he got the 114,000 number. If you look at that article, there is no allegation in any way that government statistics are falsified.

    Menzie points to Krugman being on the case, but Krugman is the bumbling Inspector Clouseau of economics who continually investigates crimes that haven’t been committed. Krugman also falsely accuses an investor of claiming that the books are cooked but if you actually read the article beyond the headlines, which use terms like “fake”, that’s not what’s being claimed. What’s actually being claimed is that economic data is providing a misleading picture. “Fake” means the data is misleading, not the that data is actively being falsified. For example here’s a quote from the article referred to by Krugman on the unemployment rate:

    “The unemployment figures are also a source of faulty or misleading data. The headline currently reported unemployment rate of 5.9% is deeply misleading. A 35-year low in the workforce participation rate, a policy-driven transition from full-time to part-time jobs, and the transition from high-paying jobs to relatively low-paying service jobs, all combine to make the headline rate a poor measure of employment health.”

    That quote echoes the point that Ricardo is making. But Krugman would have you believe that means that they are saying the government is “cooking the books.” Now let’s go back to 2003 and observe how Krugman described the unemployment rate under Bush in his NYTimes article Our So-Called Boom:

    “An aside: how weak is the labor market? The measured unemployment rate of 5.9 percent isn’t that high by historical standards, but there’s something funny about that number. An unusually large number of people have given up looking for work, so they are no longer counted as unemployed, and many of those who say they have jobs seem to be only marginally employed. Such measures as the length of time it takes laid-off workers to get new jobs continue to indicate the worst job market in 20 years.”

    What Krugman means by “funny” is that the headline unemployment rate is giving a false picture of the health of the labor market since it’s not accounting for people who have left the labor force, the same point that Ricardo and the investor made. He doesn’t mean “funny” to mean “fishy,” as in the numbers are suspicious. And no sensible person would take it that way.

    If Menzie would put Ricardo into the lunatic fringe camp, then he also needs to put Krugman in there with him, since Krugman made the same point during the Bush years. And if Krugman wants to put the investor in the lunatic fringe camp, then he should put himself there as well.

    1. Menzie Chinn

      Rick Stryker: Falsified means falsified, at least in my book. And please note, Ricardo has not disputed my interpretation of what he said, as you have. He believes (and states) the data are falsified. So who am I to believe about what Ricardo means — Rick Stryker or Ricardo? Is it unreasonable to believe Ricardo means what he says?

      1. Rick Stryker


        You seem to be able to read Ricardo’s mind. I only know what he wrote and he didn’t say the government falsified data in the sense that there is some conspiracy to put out incorrect data that they know is wrong. No, Ricardo hasn’t disputed your interpretation but he hasn’t confirmed it either. And he also didn’t dispute Ed Hanson’s interpretation, which is the same as mine.

        I wonder why Ricardo doesn’t care to come on these pages to discuss, especially given the fair and reasoned debate he can expect? For example:

        “Dick sounds mad. When you don’t get what you want, I guess you get mad. Reminds me of communists.”

        “Maybe Ricardo should do another name change to Ricardoh. As in the Simpson’s Homer’s famous Doh!”

        “I’m tired of your nonsense, Ricardo. You do nothing but lie.”

        “Ricardo refuses to learn from his mistakes no matter how many times his mistake is pointed out to him.”

        “If this were my blog I would have banned certain commenters long ago. But it’s not. I really don’t understand why you continue to allow Ricardo to post here, Menzie. He adds nothing.”

        1. Menzie Chinn Post author

          Rick Stryker: By my count, Ricardo has something like 100 pages worth of comments written under his Ricardo moniker; there are additional under his Dick and DickF monikers. I would not characterize him as “reticent”, as you seem to imply he is.

          1. Rick Stryker

            Like I said, I can’t read Ricardo’s mind. But if I saw a lynch mob coming my way I wouldn’t try to talk my way out of it. Better to vamoose.

        2. Menzie Chinn Post author

          Rick Stryker: The reason I know what Ricardo means is because of these words “out of the horse’s mouth” (from Ricardo in his DickF incarnation) — see this 2009 comment:

          The government thinks it can run the economy on data that is years old and inaccurate at best. Also any time numbers are manipulated by government there is a political element involved. The whole reason the numbers are manipulated is to the will be “more normal” but who decides what is normal? In the government political bureaucrats who know their jobs depend on pleasing the politically connected. This is just another reason why centrally planned economies always fail. The hubris in government economic circles is enormous.

          I am not saying that the agencies are manipulating data to make “each respective Administration look good.” Sometimes they manipulate date to make an Administration look worse than it actually is. It depends on their political inclination.

          ’nuff said.

          1. Rick Stryker


            But there is more to be said. But before I do that, I’d just comment that I find it pretty interesting that you are able to go back 5 years and pull out comments of readers. You must keep extensive files on certain readers along with IP addresses, especially if you are sure that DickF and Ricardo are the same person.

            Anyway, Ricardo in that thread explicitly repudiates the conspiracy theory of government statistics that you are claiming he holds. First, let me quote myself in a previous comment. I said:

            “You seem to be able to read Ricardo’s mind. I only know what he wrote and he didn’t say the government falsified data in the sense that there is some conspiracy to put out incorrect data that they know is wrong.”

            Now here’s your question and DickF’s answer:

            Menzie question:
            “DickF: Just to clarify your views on virtual paper, are you asserting then that National Income and Product Account statistics (including GDP, PCE deflator), the employment situation reports (including establishment and household surveys) and price series (CPI, PPI), industrial production and capacity utilization (from the Fed) have all been manipulated due to pressure from the policy level? If that is your assertion, I am sure all the readers of Econbrowser would like to see your documentation.”

            DickF August 10, 2009 at 10:55 am

            DickF answer:
            I am asserting that you would not deposit your money in a bank that maintained your account with the accruacy of all the numbers you mention, yet you will allow bureaucrats to run our whole national economy based on such inaccurate numbers.
            Can I prove that the motivation behind manipulated government numbers are political? Of course not. But are they manipulated? Of course. Do people fudge numbers to make the boss happy? Of course. Can this be proven? Not most of the time.
            When the CBO released numbers President Obama did not like did President Obama call the head man into his office? Yes. Did President Obama overtly pressure him to change his numbers? I doubt it, but sitting in front of the President of the United States will certainly make you check any numbers that throw cold water on one of his programs.
            Are you asserting that politics never plays a part in the release of government statistics?”

            Notice that DickF is explicitly saying that there is no conspiracy in the sense that people are ordering that information be put out that they know is false, which directly contradicts the charge against him you’ve made in this post. He’s making a much more subtle argument that when the data have a large component of judgmental estimation, it can be influenced by the incentives and pressures of the bureaucracy even though no one is engaged in any kind of conspiracy.

            Given that Ricardo directly contradicted your charge 5 years ago, isn’t it time to retract this post?

          2. Menzie Chinn Post author

            Rick Stryker: There is something called a “search engine” which allows one to search for keywords, names, IP addresses, which the administrator of the weblog can access. Does that surprise you? I do not have a Ricardo/RicardoZ/DickF/Dick file, but I can retrieve the relevant comments.

            I might observe those comments you deem critical of Ricardo are pretty weak tea compared to many hurled at me. I don’t approve, but that seems to be the state of the blogosphere. A couple of the most egregious you do not see because they have been deleted for either profanity or racist comments. So, I don’t share your worries about Ricardo’s tender sensibilities, particularly since he hasn’t been a shrinking violet himself.

        3. Rick Stryker

          I have to add Macroduck’s contribution to my list above of the fair and reasoned debate Ricardo can expect. To quote:

          “I don’t know whether you are defending Ricardo to provide Ricardo more traction (that is to say, because you hate America) or out of a misplaced sense of civility.”

          Menzie, with people saying that defense of Ricardo is motivated by hatred for America, is there any question why Ricardo does not choose to participate? Is this the tone you wanted when you did this post?

        4. macroduck

          There is information to readers tone as well as in substance. Addressing Ricardo in a tone that suggests he is taken seriously or deserves to be taken seriously would mislead readers, and so partake of the same degradation of the discussion that is Ricardo’s stock in trade. It is obvious to anyone who has read much of Ricardo’s writing that he hasnothingserious to say. Jumping in to defend Ricardo suggests your goals are congruent with his.

          As to the “mind reading” malarkey, yes, we can read Ricardo’s mind. As social animals, understanding the unstated intentions of others is a highly developed ability. Your effort to suggest that Menzie, who has put up with over 100 comments from Ricardo, can’t see beyond Ricardo’s simple text suggests that your own motives ain’t above suspicion.

          1. Rick Stryker


            You should really step back and listen to yourself. Because in your view Ricardo has nothing serious to say, he deserves to be publicly ridiculed? Furthermore, you are able to read his mind, divining the real intent that he’s apparently concealing, even though he didn’t say what you know he’s actually thinking? And people who would defend him hate America?

            You’re really comfortable with these views?

    2. Menzie Chinn Post author

      Rick Stryker: Well, going to the ZeroHedge quote of Singer, I find:

      Even apart from rising prices in high-end goods, all of this suggests that CPI inflation is being understated by some unknowable amount, which we estimate is between 1/2% and 1% per year. This is a big difference in a 2% or 2-1/2% per year reported real GDP growth environment. Middle class citizens who are paying more at the supermarket and for college tuition and for many other goods and services feel that inflation is higher than reported, but they lack access to reliable data. The well-off think that it is their exquisite good choices that enable them to sell their overpriced $10 million co-op apartment and buy a $20 million overpriced Hamptons beach home. Neither group is coming to grips with the insidious and tricky nature of modern inflation, and the government just uses its tone of complete confidence to ignore what citizens see with their own eyes.

      If that is not an assertion the books are cooked, I don’t know what is.
      By the way, why does the Billion Price Project track the CPI. Is it a conspiracy so vast…?

      1. Rick Stryker


        That passage is merely an argument that the CPI is biased down by 1/2% to 1% per year. It is most assuredly not claiming that the government is falsifying data or cooking the books in the sense of knowingly giving out incorrect data.

        As you may remember, Stanford economist Michael Boskin led the Boskin Commission in 1996 to study whether the CPI was a biased estimate of true inflation. That commission concluded that inflation was biased up by 1.3% points. So, was Michael Boskin accusing the government of falsifying data or cooking the books? Of course not.

        I noticed you passed over in silence the unemployment passages. The similarities are striking. The arguments are the same. Krugman even made the same argument he’s now criticizing when the unemployment rate was 5.9%–same as in the article he criticizes. Krugman’s hypocricsy is stunning.

        1. macroduck


          The “reply” button was missing at the bottom of your response to me, so I’m replying here.

          I am more than comfortable with what I wrote. I stand by every word. It is, I think, beyond doubt that as social ani!mals,we have a well-honed ability to see beyond the surface in social interactions. It is also really clear that Ricardo is attempting to disrupt discussion by tossing around nonsense.

          When it comes to my response to your “mind-reading” comment let me give you an example of how whatt you call mind-reading is done. Let’s consider your response to me. You aimed to cast doubt on what I wrote, but avoided specifics. Your approach was to suggest that I was insincere or that I hadn’t given much thought to my response. That’s a pretty common rhetorical trick. It show up on the internet a lot and serves as a way of dismissing views that one doesn’t like when no substantive objection is available.

          Let’s take this a step further. You have poured words into this comments section. Somehow, trying to overturn Menzies’s observation about Ricardo has gotten you going. This also looks a lot like s standard blog tactic. If you don’t actually have a way to invalidate the other guy’s view, just dilute what everybody else has to say by piling words into the comments.

          So, here’s the mind-read. You and Ricardo share the intention of preventing legitimate discussion if that discussion doesn’t support your views. You employ the same basic techniques that professional trolls use, but I can’t tell if you actually get a check for diluting honest discussion. Either way, the legitimacy of your arguments are at very best a secondary concern to you. Your goal is to disrupt discussion you don’t like.

          1. Rick Stryker


            I make arguments and support them with evidence. You claim that people you disagree with hate America. I don’t need to read your mind to understand that it is you who intend to disrupt honest discussion.

          2. baffling

            rick, actually you do not use evidence to support your arguments. you develop hypotheticals to further your straw man arguments. i vividly recall the use of your “son” and “brother”, perhaps even the man on the moon, to advance your notion of why obamacare was going to fail. of course you were wrong. but i reiterate, this was an argument not based on evidence, but on your ideology as evidence for facts.

  14. Joseph

    So, is there a lost cohort? A group including millions of men perhaps, many of whom worked in the construction industry as sub-contractors. Did economists notice for instance that since the 70s the employed construction worker has been replaced by 1099ers?

    Self-employed people, including small business owners and 1099 contractors are counted as employed by the BLS. They are not lost. As to whether people who were converted to 1099 contractors are worse off, well that is a different issue, but they are not uncounted by the BLS.

    The BLS definition of employed is “All persons who did any work for pay or profit during the survey reference week.”

    1. ray lapan-love

      Thanks. I’ve read otherwise, but it has always been difficult to believe that the BLS could ignore such a large group.

  15. randomworker

    If this were my blog I would have banned certain commenters long ago. But it’s not. I really don’t understand why you continue to allow Ricardo to post here, Menzie. He adds nothing.

    This kind of casual disbelief of a government statistic is quite common on the internet. Read through Marketwatch comments on the Friday employment report, or any of the Thursday unemployment reports and you can see a hundred comments like Ricardo’s. My guess is if Scott Walker were president all such statistics would be shouted from the rooftops and used as proof positive that simply the election of Scott Walker was responsible for the current American renaissance. In fact, we may be able to see just this in action come January 2017.

    Anecdote alert: Driving through my socialist hellhole here in Minnesota today, on my way from my suburban home to a suburban shopping center, we lost count of the number of “Help Wanted” signs. At Burger King sign, yes indeed. And they were paying $15 an hour! Sacre bleu! But also a variety of businesses all up and down the state highway had them out. Said state highway was also buzzing with construction activity along both sides – office parks, light industrial, warehouse construction. Unemployment is going down, people.

    My prediction – the economy will suck until November 2016. Then it will either instantly and miraculously recover or continue to suck, depending on who wins.


    1. Hans

      Worker, your post added nothing to the conservation other
      than your Socshevik desire to ban members and thoughts.

      BTW, those helf wanted signs would be few if any, if our Maoist
      state did not offer such wonder welfare benefits.

  16. Robert Hurley

    I really don’t like censorship. I think that allowing people like Ricardo to post serves two purposes for a person like me who worked in private industry, is now retired and is interested in learning more about economics especially macro so I can support policies that are effective. 1. It exposes the power of ideology that blinds people to facts. 2. It also helps sharpen my understanding of why they are wrong.

  17. Rick Stryker

    By the way, there are some very good examples of the lunatic fringe, i.e., people who that believe the government is falsifying data. A great example comes from none other than Paul Krugman himself. Back when Bush was President, he saw clearly that the Bush Administration was falsifying intelligence reports on weapons of mass destruction. As he put it in his NYtimes column Standard Operating Procedure

    “Suggestions that the public was manipulated into supporting an Iraq war gain credibility from the fact that misrepresentation and deception are standard operating procedure for this administration, which — to an extent never before seen in U.S. history — systematically and brazenly distorts the facts.”

    So, let’s get this straight. When Bush was in power, the government was capable of successfully engaging in a massive conspiracy, a conspiracy requiring hundreds of people in the intelligence community to keep silent, and a conspiracy which fools the Democrats in Congress who are charged with oversight of intelligence. But in 2014 Krugman makes up out of thin air the that people today are alleging such a conspiracy in government statistics, so that he can tut tut about the foolishness of people who think these conspiracies are possible.

    Yes, the Inspector is on the case.

    1. Menzie Chinn Post author

      Rick Stryker: There is a difference between the statistical releases put forward by the nonpartisan statistical agencies (BLS within Labor, BEA within Commerce), and reports at the direction of the EOP. For instance, I myself noted the climate change documents suppressed by the Bush Executive Office of the President.

      1. Rick Stryker

        Sorry Menzie, but that won’t wash. The conspiracy that Krugman is alleging is much bigger than what it would take to push falsified data through non-partisan statistical agencies. The conspiracy that Krugman is claiming is a Hollywood movie level conspiracy starring Bruce Willis.

        Krugman should not be lecturing anyone on conspiracy theories, being a card-carrying member of the lunatic fringe himself. But if he ever gets tired of blogging, Krugman could consider writing a season of the tv series 24. He’s got the imagination for it.

        1. Robert Hurley

          Rick: your definition of a lunatic seems to be anyone who disagrees with you. I wonder how many economists would agree with your characterization of Krugman. It is probably a fool’s errand to believe anyone can carry on a rational discussion with you where you lay out your theory and see how accurate your predictions are. That means accepting the accuracy of data produced by groups that have no ax to grind. That is something you seem unable to do.

          1. Rick Stryker


            Not sure how you draw any of those conclusions. My point on Krugman has been that he advanced a huge conspiracy theory on WMD. If we define the lunatic fringe as the set of all conspiracy theorists, then Krugman belongs in that group and shouldn’t be lecturing others about their alleged conspiracy theories. This is not a question of economics and so economists’ views don’t really matter on this.

        2. macroduck

          Actually, it washes just fine. Intelligence reports and analysis are done under rules of secrecy. Economic data collection and the treatment of the data are done without the cover of secrecy. It’s baffling that anyone with any knowledge of how these two very different areas of government activity could honestly miss the distinction. Somehow, Striker did miss the distinction. More evidence for my point that he, like Ricardo, is not engaging in this discussion in good faith.

          1. Rick Stryker

            I see. The reason I don’t know the conspiracy actually happened is because it’s classified, “for your eyes only.” I should have known, since the same thing happened in the “Bourne Identity.” But you must know since you can read minds.

      2. Rick Stryker

        I certainly agree, by the way, that the situation is different when it comes to reports controlled by the EOP. For example, health care analyst Bob Laszewski reported in his USA Today column on the Administration’s manipulation of Obamacare facts and numbers. Amazingly, the Administration prohibited any insurance company web site testers from disclosing in any way their experiences testing the revamped web site–no disclosure to the press, nor to Congress, nor to the public. Laszewski also discussed the problems with the Administration’s reporting of enrollment figures and insurance premiums.

        So, yes, manipulation of data is happening. But this doesn’t really bother me. Republicans weaponized Obamacare and then dropped the Big One last Tuesday–so it’s all working out.

        1. steve

          Uhh, no. It has been very well documented that Bush did selectively emphasize the part of the NIE which made Iraq out to have significant WMD programs. However, the second half to he report went over reasons why they might not have WMDs. He, Bush, chose to ignore that part. To be clear, the whole report is extremely subjective. Much of the info came from human intelligence sources, which are always subject to problems. (Looking back it is amazing how much influence people like Chalabi had.)

          But, what you forget here (giving you the benefit of the doubt), is that O’Neill reported in his book that at the very first cabinet meetings, well before 9/11, the Bush admin was already looking for a way to go to war with Iraq.


          1. Rick Stryker


            I would keep in mind that Paul O’Neill was an embittered man who was fired from his post because he couldn’t get along and couldn’t convince others of the policies he wanted. O’Neill presents Bush as disengaged in meetings, lacking basic info, and being cocooned by Cheney. But this view is directly contradicted by Bob Woodward in his book “Bush at War” who presents Bush as engaged and demanding details and results. Other Administration officials have confirmed Woodward’s view. I don’t think we can take O’Neill very seriously.

            In any event, O’Neill’s views are beside the point. Krugman is claiming that there was a massive conspiracy to cover up and distort intelligence information. That conspiracy, as I said, would require quite a lot of people to keep quiet, would have had to fool all the major Democrats, who have their own relationships with the intelligence community, and would have involved the complicity of major foreign intelligence services. There is no documentation of this nor could there be. Krugman should not be lecturing anyone on believing in conspiracy theories.

          2. macroduck

            Wow, we are really getting a taste of the world according to Striker here. O’Neill must be a bitter old man, because he reported from inside Bush Cabinet meeting exactly the sort of thing that was revealed to be true by subsequent events.

            Interestingly, Striker claims there can be no evidence of O’Neill’s assertions. That is as much as to claim that Striker’s own views of O’Neill is not falsifiable. “Believe me,’cause you can’t prove I’m wrong.”

            For those who are not familiar with O’Neill’s book, it might be worth knowing that O’Neill didn’t write it and never claimed to. He handed his notes from meeting, his schedule books and such to Ron Suskind, who did the writing. For Striker’s story that O’Neill cooked up his story out of resentment to be true, he’d have had to concoct records of events day by day, make sure the were internally consistent, in good enough order that an experienced journalist wouldn’t catch him. Of course, Striker may claim that Suskind was in on the lie. Why not? That isn’t falsifiable either.

            By the way, Paul O’Neill was fired because he was what Bush called a “truth-teller”. O’Neill was fired for telling the truth. So was Larry Linsey. Richard Foster wanted to give Congress the true cost estimate for Medicare Part D coverage, but was told he’d be fired if he did. The Bush administration gutted the intelligent and research office of the Department of State because it consistently saw the truth behind the administration’s distortions. “Getting along” under Bush meant engaging in lies and distortions that cost lives and international credibility and hundreds of billions in debt. O’Neill and a handful of others in the Bush administration put the country ahead of themselves. The true scandal is that so many others went along with the lies. Striker apparently favors those who went along over those who were willing to speak up.

  18. dilbert dogbert

    Some of the comments remind me of the old Mark Twain quote about open mouths and removing doubt.

        1. Rick Stryker

          There you go commenting again. You’ve already removed any doubt so further comments are unnecessary.

  19. 2slugbaits

    Once again Rick Stryker continues his eternal battle with the English language. So let’s help him out. Rick Stryker says that Ricardo only meant to imply that the data were “misleading.” But “misleading” is an adjective that describes the noun “data.” The word that Ricardo actually used was “falsifying,” which, according to the dictionary, is a verb. In Ricardo’s construction “our government” was the subject and the verb was “falsifying.” Now if Rick Stryker truly believes that Ricardo intended to attach the adjective “misleading” to his claim, then it would read like this: “Our government is falsifying misleading information.” Huh??? If you falsify misleading information, then apparently you are giving an accurate picture…or who knows what you intended to say. It’s just gibberish. Given that the words did come from Ricardo I do not entirely discount the possibility of utter gibberish; however, in this case I’m willing to give him the benefit of the doubt and assume that he intended to give those words their plain meaning. Ricardo was saying that the “our government” was “falsifying” data. We have a subject and a predicate. It’s a complete thought. No need to go through silly mental gymnastics to try and save Ricardo from his own words.

    As to a massive conspiracy to mislead the public about WMD in Iraq, I don’t know why it had to be massive. The data were classified, so access was limited. And it’s not uncommon for the government to classify patently false information in order to short circuit any attempt to refute it. Weapon system project managers do it all the time in order to make it effectively impossible to refute. But what’s most telling is that the few US Senators who actually reviewed the classified reports were shocked at how thin the case was for WMD. But very few Congress critters actually bothered to read the report…and that includes then Sen. Clinton, who voted in self-imposed ignorance.

    steve You may well be right about the Bush Administration wanting a war with Iraq well before 9/11. I think it’s reasonable to think so, but I cannot honestly say with 100 percent confidence that it’s true. That said, I can say absolutely, positively and with 100 percent confidence that the decision to go to war with Iraq was made no later than the afternoon of Wednesday, 26 Sep 2001. Those are not meetings “at the highest level” or late night phone calls that one easily forgets. In any event, the decision to go to war happened well before the US started deploying conventional troops into Afghanistan. The decision to go to war with Iraq and put Afghanistan on the backburner had two fateful consequences. First, it diverted FY2001 “Defense Emergency Relief Fund” monies explicitly appropriated by Congress away from the Afghanistan war and (after having been laundered) to the Iraq build-up (98% of the DERF monies were diverted). [Note: the FY2001 DERF monies legally had until Sunday, 30 Sep before expiring; however, the last business day was Friday the 28th, so the latest possible date for the decision was on Wednesday afternoon because one day was needed to generate the requirements and another day was needed to obligate the monies.] Second, it led to the calculated decision to stand down the battalions that were supposed to finish off A-Q at Tora Bora. In his memoirs GEN Tommy Franks claims that he was the one who countermanded the deploy order. If you believe that one I’ve got a bridge to sell you. There was great concern at the time that bin Laden had to be kept alive in order to serve as the poster child for terrorism that would justify and support the coming war with Iraq.

    1. Rick Stryker


      Ricardo did not say the government was falsifying data as you falsely claim. Ricardo said “Our government is doing a serious disservice by falsifying the employment condition in our country.” “Employment condition” is not “data.”

      Looks like you’ve self-identified as a member of the lunatic fringe. Can’t say I’m surprised. Maybe you can help Krugman write an episode of 24.

    2. macroduck

      “One of the keys to being seen as a great leader is to be seen as a commanders in chief.”
      – George Bush the lesser, 1999

      “The President wanted me, after the fact, to blame iIraq for the 9\11 attack.”

      – Richard Clark, Bush Terrorism Advisor

      Bush wanted war and he wanted war specifically with Iraq. We see the results still today.

      1. Rick Stryker

        Lunatic fringe alert! Lunatic fringe alert!

        This is the same Michael Clark who believes Bush should be tried for war crimes by the UN. And this is the same Michael Clark, who, when journalist Michael Hastings’ car crashed, Michael Clark advanced the conspiracy theory that a major intelligence agency, possibly the US, had taken control of the car by cyber-hacking and caused it to crash.

        You, 2slugs, and Krugman should really get together to discuss your theories–just make sure you haven’t been followed.

          1. Rick Stryker


            Yes, I did mean Richard Clarke. Intelligence officials doing their job uncovering terrorist plots is hardly equivalent to the speculation that an intelligence agency hacked an automobile in order to silence an investigative journalist. That’s a pretty wacky conspiracy theory.

            Of course, there are genuine and serious analyses by former intelligence officials. Don’t know if you have read it, but in my opinion one of the best treatments of what went wrong with intelligence with respect to Iraq is Charles Duelfer’s book Hide and Seek: The Search for Truth in Iraq. As you may recall, Duelfer led the Iraq Study Group that definitively established that Iraq had no weapons of mass destruction at the time of the invasion. The Duelfer Report laid out the facts about WMDs. Duelfer was also a U.N. weapons inspector during the Clinton years and he relates his experiences with the cat and mouse game in the 90s of forcing Iraq to give up its weapons programs, which Saddam always intended to restart once he got the UN sanctions lifted. Duelfer was intimately involved with Iraqi affairs for much of his career and knew the players on both sides well. In the book, Duelfer reflects on why US foreign policy and intelligence failed. But Duelfer emphasizes that just as the US didn’t understand Iraqi domestic or foreign policy, Iraq also failed to understand the U.S., miscalculating with the invasion of Kuwait and in its actions after 911, ultimately leading to the invasion of Iraq.

  20. genauer

    Maybe it helps, when I add my german 2 cents to the discussion, as an outside and decades long view.

    Back in the very old days, the number of people registered in the unemployment office (whatever that is called then and now in what place) was a realistic number to describe the situation.

    If however that does not result in some benefits, and/or doing something like further education / “self employed” that became a bad number and the telephone surveys (60 000 people by landline phone, I think) became the relevant number. That has some, not too serious, structural problems too.

    The US Government guy doing it was actually a little surprised and amused to talk on the phone with me, a private German guy, asking details : – )

    For comparison, German unemployment is 6.7 % like we count it here (state Saxony 9.7%) , international standard number is 5.3%,
    But while back in 2007, you could find a good cleaning lady for 8 Dollar (6 Euro) per hour, now they demand upwards from 15 (PLUS 19% VAT tax),
    Which is now a little rich, when you look at it from the other side : – )

    The labor market has cleared, and supply and demands just works, textbook style. They really have pricing power, despite a headline number of 9.7% unemployment

    Why do I tell this to US folks ?
    a) to explain difficulties of international comparison, AND
    b) the “misleading” can also work the other way

    Hopefuly that helps to reconcile the emotionally charged differences here

    Please take a look at IMF 2014 WEO (World Economic Outlook) and there at the two variables LE (Employment) and LP (Population), dividing both gives you a much better picture than the variable LUR (Unemployment), maybe divided by the fraction of people in the working age (taken from the CIA world factbook, omitted here, because the difference between the US and Germany is small)

    1984 1994 2004 2014
    Canada 0.442 0.451 0.499 0.505
    France 0.406 0.393 0.409 0.404
    German 0.438 0.439 0.430 0.506
    Ireland 0.317 0.340 0.463 0.400
    Italy 0.346 0.359 0.390 0.373
    Japan 0.480 0.516 0.495 0.499
    Dutch 0.384 0.438 0.482 0.494
    Spain 0.298 0.318 0.419 0.361
    Sweden 0.503 0.445 0.476 0.484
    UK 0.431 0.441 0.476 0.471
    US 0.444 0.467 0.475 0.458

    2004 was the height of our unemployment with 10.4%, but Employment has risen much more dramatically, from 0.430 to 0.506, by relative 18%
    It should be mentioned, that such things happen mostly on the lower side of the pay scale, until the scale tips.

    Employment fractions for the US are the exact same 0.455 for 2009 and 2013, underlining the point from Ricardo, that this counted as 9.3% unemployment in 2009, compared to now

    Soo, It is not “falsifying”, but misleading

    but a blog is not an academic paper, requiring more precise wording

  21. Joseph

    Ricardo: “Employees are still leaving the workforce with African-Americans seeing 114,000 dropping out.

    People are arguing about the semantics of the words “falsifying” and “misleading” while ignoring the part of Ricardo’s statement that is actually demonstratively false.

    Ricardo got that number by a mathematical mixup he applied to the BLS table A-2. His error was pointed out in a previous post and here he is again making the exact same mathematical error with respect to African-Americans. Now that is what I call falsifying data.

  22. dilbert dogbert

    Here is Krugman covering some of the same territory:
    “The crudest level is that of the inflation truthers, who insist that the government is covering up real inflation. There’s also the “I never said that” faction, claiming that they haven’t been refuted, because they only said there was a “risk” of hyperinflation — I’m not sure which position is more contemptible. “

    1. Ricardo

      I cannot tell you all how I appreciate all the attention. I am just a little someone and I have been honored with over 50 posts and the number seems to be growing. Not many of Menzie’s posts get this much attention. Perhaps he should put me in the spotlight more often. But that is another issue. Let me repeat, thanks for all the attention.

      But I do have to say that I don’t need the attention. I am actually just trying to learn more economics and point out the errors of the mainstream economists making the big bucks. If I have made one person actually question the errors taught in Keynesian economics that is all I really want. Just stand strong and don’t let them get away with half truths. Make them prove they make things better not worse. Make them prove that good economics is not just Sudoku. Make sure that truth is more important than being “robust.”

    2. Rick Stryker

      Not surprisingly, Krugman is accusing others of what he himself is guilty of. Back in 1982, when Krugman was on the CEA, he famously predicted in a memo to Martin Feldstein that inflation would accelerate substantially. Of course, we all know how wrong he was and no doubt Feldstein put the memo in the circular file. Krugman himself was an inflation truther back in the day.

      1. Menzie Chinn

        Rick Stryker: The memo says “reasonable to expect”. Far cry from the less hedged views from Sarah Palin. And, September 1982 m/m annualized CPI inflation was 0% (9/82 was when that memo was written). Inflation did rise to 5% m/m in October. And in April 1983, m/m inflation rose to 8.5%. So inflation did rise.

        Oh, and when Sarah Palin decried QE, inflation was 2.8% m/m annualized; September 2014, it was 1%.

        1. Rick Stryker


          Not sure if we are reading the same article about Sarah Palin. According to the article, she came out against QE and said that “we shouldn’t be playing around with inflation.” Unlike Krugman, she did not give any numerical estimates or even claim that it’s reasonable to suppose that inflation would accelerate.

          However, when you look at Krugman’s memo, he was much more specific. Krugman clearly wasn’t talking about monthly numbers. The first section is titled “The Inflation Time Bomb?” and argues for a significant re-acceleration in the near future. The section claims that there has been only apparent progress against inflation that are the temporary results of tight money and high interest rates. Krugman predicts that the normalization of commodity prices and real exchange rates will add 5 percentage points to future increases in prices alone. That’s very specific. But he goes further.

          In the second section, titled “How Much Progress Has Been Made Against Inflation?” Krugman argues that the progress made in inflation since 1980 is not really a reduction in the underlying rate. He goes on to say that inflation depends on the rate of change of the level of slack rather than the level of slack. He then darkly issues a reminder about the acceleration of core inflation after the end of the 74-75 recession. Inflation was 12.2% in 1974, dropping to 7% in 1975. But then, as Krugman warns, by 1978 it had re-accelerated to 9%.

          Krugman was predicting that inflation hadn’t been licked and would show the same re-acceleration pattern as it did after the 74-75 recession. And Krugman was completely and utterly wrong.

          1. Menzie Chinn

            Rick Stryker: Yes, well we have all made predictions that didn’t work out. But the standards for an internal staff memo are somewhat different than a public pronouncement of Administration policy. As a CEA staff economist, I was asked to speculate on certain matters, and frankly — otherwise we would not have a free exchange of ideas (yes, this is valued inside CEA, as well as academia, much as I am sure you don’t believe it). I would have been much more circumspect if my speculation was to be on the record as the Administration position — well, that’s why the Members are at the pay grade they are.

      2. macroduck

        Krugman has acknowledged his error. He has acknowledged others. Among the big point she has been pushing is that mistakes ought to be acknowledged. The point he has made repeatedly about the signers of the “inflation letter” is that they refuse to acknowledge error. Ofcourse , Striker failed to mention that inconvenient bit of information.

        1. Rick Stryker

          No, Krugman did not acknowledge this error. In fact, Krugman almost never acknowledges his many errors. But maybe he did admit his inflation mistake in his secret thoughts and you read his mind.

  23. t thomson

    Wow! This thread is fun. More laughs than watching Dr. Phil or Oprah.

    Given that no one involved can predict what US interest rates will be 36 months down the road with actionable precision, its all ‘yar boo sucks and you’re another.’

    Please keep it coming! No one has been called a Nazi yet. And Sluggo’s work on Talmudic linguistics is especially enjoyable.

  24. Blissex

    «He’s making a much more subtle argument that when the data have a large component of judgmental estimation, it can be influenced by the incentives and pressures of the bureaucracy»

    Well, that nearly all adjustments for “greater accuracy” enacted in the past decades have the same direction must be proof to our blogger that *there was* a conspiracy for the past decades to “cook the books” in order to overstate unemployment and inflation and understate GDP, a conspiracy so vast and secret that is shocking to realize it existed 🙂 :-). It must have taken brave people to fight this hideous (certainly liberal, probably funded by foreign powers) decades long conspiracy to terrorize Usians by publishing much exxxagerated “headline” estimates of inflation and unemployment, and underestimates of GDP, to sap their patriotic fervour and depress the sacred valuations of stocks. 🙂 🙂

    «even though no one is engaged in any kind of conspiracy.»

    The very clever people who “manage” the indices publish all details, so there are no secrets, no conspiracy…

    However as to the buffoons who claim that “conspiracies” involving organizations with thousands of people cannot exist, some names: Enron, MCI, Citigroup, Countrywide, Bear Sterns, Lehman, AIG, …

    Of course except for Enron and MCI practically nobody in the others has been convicted, so technically there was no falsification of accounts and no conspiracy to commit accounting fraud.

    1. Rick Stryker

      We’re fighting over a comb? I wish I had known that sooner so that I would not have wasted so much time on these comments. I thought we were fighting over whether Progressives can get away with the tactic of discrediting conservatives or libertarians with arguments they didn’t make so that people don’t listen to their real arguments–a technique that Krugman has pioneered. But it’s been about a comb all along!

      1. macroduck

        Oh, then you’ve been wasting your time Striker. We’ve been engaged in an exchanged aimed at preventing dishonesty from going unchallenged. What Ricardo initially claimed was untrue. Given his long record of untrue statements, the odds that his is operating in ignorant honesty are very, very small. You, too, have a record of disingenuous argument, distraction, misdirection…the whole playbook from the right-wing troll crowd.

        Most of us would welcome an exchange with someone honest who holds conservative views. People like you just get in the way and it’s obvious that getting in the way of honest discussion is your aim. It’s actually kind of funny – in a sad way – that Ricardo claims to be trying to learn about economics when his behavior suggests he is trying to prevent others from learning economics when economics leads to a conclusion his masters don’t like.

        That’s why the rest of us have a real obligation to point out how debased your comments are. Innocent bystanders who really are curious to know how the world works, by the simple fact of their innocence, could be misled by your comments. That is apparently your exactly what you are aiming at.

        1. Rick Stryker

          Well, you’ve made a lot of accusations about my motives, which I guess you are qualified to do since you can read my mind. But I wonder if you will ever get around to pointing out just why I’m wrong. After all, you don’t want innocent people to be misled by people who, in your own words, “hate America.”

  25. JBH

    Corruption, thy name is big government. Along with a hefty portion of the corporate world joined at the hip. Conservatives from their right eye see only the deprecations of the left. As does the other side in flip mirror image. This conveniently diverts both eyes of the populace from the real game of the deep state. With nary a chapter on corruption in Principles of Economics texts. Where, then, is the body of knowledge that informs and aids one in the discovery of crooked statistics? It exists not. That is on purpose, being along with propaganda, disinformation, half-truth and other psychological methods how the corrupt elite rule.

    Where, then, is the health insurance component of the CPI? Nowhere to be seen. Splintered into five or so other components, as the BLS informs us in an aside box. That, and hedonic adjustments on so many components – these opaque to nearly everyone. With political appointees atop each agency handing down directions. Are we to believe the statistics are not slanted? Just how much slanted field data collection is there? Lois Lerner, the IRS, and smoked hard drives? Not even Congress with official inquires can get to the underlying reality. An entire research field opens up here, but few will enter it as it takes courage, and will never lead to tenure. Indeed, quite the opposite.

    Ray lapan-love says: “I honestly don’t know just how objective or truthful government data is, or isn’t.” This statement is a reliable one. Nearly everyone would say so. We can fairly categorize it as truthful. And it motivates us to ask: How is it that we recognize the truth? All the commenters here think they have the truth. Clearly given the disagreement, some must be wrong in that belief and not even know it. Chances are, they are the ones most cocksure.

    1. Blissex

      «Corruption, thy name is big government. Along with a hefty portion of the corporate world joined at the hip.»

      My impression is that as a rule central government is fairly clean. What is
      famously corrupt in the USA is private business, where fraud (against shareholders, customers, employees, …) and bribery (most notably of purchasing managers) seem standard practice; plus “pay-per-play” politics, and often local government, which is subject to more direct pressure from “pay-per-play” politics than central government.

      While private business employes are driven by “or else” pressure to deliver the numbers that management want, doing whatever it takes, there are some safeguards for government employees. But government employees can be subject to political pressures, and while many try to resist, those who choose the easiest option seem to have more rewarding careers. SOmewhat like the many sell-side aligned analysts, Economists, journalists, politicians, who know how rewarding is to follow the principle of “don’t bite the hand that feeds you”.

      This is the opinion of noted historian Gingrich on private business practice:
      «If you have a society where almost every middle class person routinely fudges the law, that’s telling us something. We have laws that matter – murder, rape, and we have laws that don’t matter. Speed limits are an example. Why would you think that a regulatory, process-oriented bureaucratic model would work?
      The first thing that every good American says each morning is “What’s the angle?” “How can I get around it?” “What does my lawyer think?” “There must be a loophole!” Then he proceeds to work the angle, and the bureaucracy spends its time chasing that and writing new regs to stop him. America is the most incentive-driven society on the planet.»

      And from rather more serious de Tocqueville from the 1830s:
      «Consequently, in the United States the law favors those classes that elsewhere are most interested in evading it.
      It may therefore be supposed that an offensive law of which the majority should not see the immediate utility would either not be enacted or not be obeyed.
      In America there is no law against fraudulent bankruptcies, not because they
      are few, but because they are many.
      The dread of being prosecuted as a bankrupt is greater in the minds of the majority than the fear of being ruined by the bankruptcy of others; and a sort of guilty tolerance is extended by the public conscience to an offense which everyone condemns in his individual capacity.»

      In the USA it seems that honesty in private business is considered a quaint weirdness that only jimini crickets and uptight nerds (usually from the Great Lakes region) stupidly care about; because in Dixie culture winners do whatever it takes.

      «Lois Lerner, the IRS, and smoked hard drives?»

      That was indeed a scandal, because none of the many nakedly political campaign organizations fraudulently pretending to be charities to enable tax cheating from their donors was ever deprived of their tax-exempt status as the law required; thus allowing many conservative (and a few liberal) campaign donors to cheat on large amounts of taxes. That may well be because government employees were worried of being punished in some indirect way by the receiving politicians if they stopped the fraud and enforced the law to get many very rich campaign donors to pay the taxes they owed by law.

  26. DeDude

    The interesting thing about employment is that there are both things that are very good and things that are very bad. This gives people who are stuck in their own narratives and political motivations lots of opportunities to cherry pick data.

    Calculated risk has some nice presentation of data:

    New unemployment claims are the lowest since April 2000 at the same time as long-term unemployment and “part-time for economic reasons” still are as bad as at the worst during the Reagan double dip recession. No matter what your favorite narrative is you have reasons to rejoice and feel vindicated.

  27. Ricardo

    Let us assume that Menzie is correct and everyone in government is totally honest with their data. In my spirit of trying to open minds let me ask a question. Is that economic data or historical data? What I mean is, will knowing the unemployment rate or last quarter’s GDP help an entrepreneur make decisions about his business tomorrow or next year? Consider, history is history and the number of buggy whips manufactured last month has little meaning. There are those who use history to predict the future but there are others who use the stars and horoscopes. Who is better at predicting?

    Just think about it. The government makes decisions always looking in the rearview mirror. A free market is based on entrepreneurs looking to the future. The more government takes from the free market the more we are bogged down in the past and hindered from experiencing the future.

  28. AS

    Is 60 Minutes part of the lunatic fringe for reporting last night about the VA reporting false statistics on veterans’ care and gross mismanagement? The bad news is that gross management spans Democrat & Republican administrations. The good news is that it may be addressed. An excellent former head of Proctor & Gamble who is a West Point graduate seems capable and committed to fixing the problems.

    1. ray lapan-love

      At the risk of being seen as a right-wing sympathizer, (which I’m not), I can’t resist mentioning how conspicuous it is that Krugman’s misrepresentation of the VA’s efficiency has not been mentioned in this conversation. IIRC, in 2011, Krugman gave credit to the VA for having a stellar cost per procedure record only days before a 60 minutes piece that showed how patients were simply not receiving the care that the VA was taking credit for, and of course this has of late become an even bigger issue. That has all been very embarrassing, no doubt, but, by no means… do I mean to suggest that one mistake is defining.

      1. Robert Hurley

        I am not sure how that can be characterized as misrepresentation. First, Krugman was depending on data that he could have no way of knowing was fudged. Also, it could well be that even with more accurate information, Krugman’s assessment is correct.

        1. ray lapan-love

          Well yea, unless he had maybe talked to some patients, or had done something other than accept what was provided over the internet. But then of course that is what the MSM does these days, isn’t it? Diligence be damned, or at least when the data supports the agenda.

          Except of course the 60 Minutes crew got the truth, so it was there to be discovered. In fact, if you watch that segment, you’ll see the ‘fudge’ in cardboard boxes that were being used to file the vast number of cases that had been waiting for approval, some of these cases years old.

          1. Robert Hurley

            You still have not proved your point. Given that the cost of VA care is less than care outside the VA, it is highly likely that despite the problems with the VA, Krugman is right. Just look at the math

          2. ray lapan-love


            I’m an advocate of a single-payer system myself, and have been so since the early 70s. However, what Krugman said back in 2011 did far more to tarnish socialized medicine than it did to move it forward. For example, he referred to the VA’s Veteran’s Health Administration as “a huge policy success story” that “offers important lessons for future health reform”. He also made mention of multiple surveys that were not cited but that allegedly upheld his “huge policy success” claim. But then, shortly thereafter, the 60 Minutes piece showed that vast numbers of cases were being ignored, with many lost in a basement, and many patients were interviewed who told one sad story after another. So, how can Krugman be “right”? He simply put his considerable weight behind a misrepresentation of the truth, regardless of whether the VA might be able to provide efficient care, or not.

            Anyway Robert, as this comment board shows, unavoidably, political agendas have a powerful influence, and alas, objectivity does of course give way to muddled thinking. This all being easy to understand. It is far less easy though… to understand how, when everyone knows that each political party is beholden to big money, that so many continue to support corrupt positions on both sides. Surely it can’t be naivete, not with the corruption so obvious. So is it ‘wishful thinking’ maybe, or brainwashing perhaps?

        2. Hans

          Serious, Mr Hurley, how often is the Krugmeister denouncing
          bad government or failures? He is a Demco hack, at minimum.

          1. Robert Hurley

            Hans . There is no way to debate you as in your world facts have no standing and all is distorted through the prism of ideology. To have a discussion where people can debate and learn, you have to be willing to test your theories and accept the results whether they confirm or deny your theory. Menzies and Krugman do. What about you?

  29. Ricardo

    The following is for entertainment purposes only. Please do not use this government data to make investments or government policy!!!

    It seems inevitable that some Ph.D. student in economics some
    time soon will pick up a recent copy of the Economic Report of
    the President looking for a dissertation topic and learn that
    there was a Great Depression in 1946, a topic which he or she will
    then analyze using all the tools of modern economic analysis. The
    student will read that real gross national product in 1946 fell 19
    percent, the largest single decrease in annual output in the century
    of recorded annual GNP data.’ He or she will also learn quickly that
    from 1944 to 1947, real output fell by 22.7 percent. Looking up
    population figures, the student will observe that per capita output
    actually declined by more than one-fourth in real terms over the three
    years of conversion from war to peace, and did not regain the pre-de-
    pression (1944) level until 1964.’

    From all of this the student will no doubt conclude that the hereto-
    fore neglected Great Depression of 1946 was the worst cyclical downturn
    in modern American economic history, and that by some measures it had
    a greater disruptive impact on the American economy than the earlier,
    more celebrated Great Depression of 192941. For example, in the
    earlier downturn, real per capita GNP surpassed the 1929 peak levels
    within 12 years, compared with 20years it took to surpass the 1944 peak
    after the 1946 depression. Moreover, while the 1929-33 downturn was
    quantitatively a bit larger (30 percent vs. 23 percent), no single year
    exhibited a decline of the magnitude of that witnessed in 1946.

    If the student is typical of most economics students today, he or
    she will lack a historical perspective. Therefore, that individual no
    doubt will fail to observe that the Great Depression of 1946 has been
    worsening every decade. In 1960, when Historical Statistics of the
    United States, Colonial Times to 1957 was published, the reported
    decline in real GNP in 1946 was but 7.8 percent, and for the three
    years 1944-47 just 9.8 percent, hardly a great depression.3 When the
    next edition of Historical Statistics was published in 1975, however,
    the 1946 decline was a more robust 12 percent, and the total business
    cycle downturn (1944-47) saw a drop in real output of 14.2 per~ent.~

    By 1981, when the Department of Commerce reported revised
    national income data, the 1946 drop had reached a truly “depressing”
    14.7 percent, with the episodic decline reaching 17.4 percent.5 Five
    years later, in 1986, the 1946 depression truly earned the label of
    “great” when the latest revisions in statistics revealed the 19 percent
    drop discussed above. The Great Depression of 1946 seems to be
    getting constantly worse, and if current trends continue should soon
    pass the 1929 depression in magnitude by any criteria.

    1. Menzie Chinn

      Ricardo: It is customary in academia, and even in blogging, to cite sources. This excerpt you have quoted is from Vedder, Richard K., and Lowell Gallaway. “The Great Depression of 1946.” The Review of Austrian Economics 5.2 (1991): 3-31. What you intend to prove by quoting it verbatim, I don’t know. I am afraid the Review of Austrian Economics is not a venue that puts me in awe…

      1. genauer

        The data in the Solow 1957 paper show only a drop of 4.4 + 1.7% in productivity, with unemployment change 2.7% adding up to 8.8%, simplified calc

        Technical Change and the Aggregate Production Function
        Author(s): Robert M. SolowReviewed work(s):Source: The Review of Economics and Statistics, Vol. 39, No. 3 (Aug., 1957), pp. 312-320Published by: The MIT PressStable URL:

        The data in URL: as of 2014, show a cumulativedrop of real GDP per capita, after 1944 of 16181 / 13456 -> 20%, only to be fully recovered in 1956

        They want to be cited as

        Samuel H. Williamson, “What Was the U.S. GDP Then?” MeasuringWorth, 2014 

        To add to this, I want to note that the accounting in Table R100 is constantly changing.
        I have 5 different versions of data, leading to substantially different wealth / income ratios

  30. spencer

    There were no weapons of mass destruction.

    Krugman was right and the administration was wrong.

    Yet you call him a member of the lunatic fringe for being the one who was right.

    What does that say about how I should treat your judgement

  31. Hans

    Spencer, try watch the MSM, as they have reported WMD
    now finding there way into Islamic Terrorist groups.

    Keep spreading the lie – until they die.

  32. Hans

    This is the worst administration and the most corrupt in American history.
    One lie begets another..The end justifies the means..Since the Progressos
    cheat at the polls, why not with little old data..

    Moreover, the FBR and governmental agencies, are more than willing to
    “work” with the present White House gang, to further the cause..One for all
    and all for one.

    Those that believe everything that your governmental unit tells you, are
    simply, simple fools.

    Let’s remember, that the leftwing consisting mainly of Atheists whom are in fact
    Statists…The government represents their deity..They can not manage without
    some form of governmental control..For them life begins and ends in a regulatory
    climate..These people have and always will, need a third party arbitrator..It relieves
    them of the demands of life.

    Moral convictions, in the main, are carried in the back pocket..There is a higher propensity
    of the left to lack honor and morals..These fundamentals, only make the final objective
    more difficult and are quickly cashiered..Forget not, that the left is agenda driven, to the
    point of no return..As one campaign is finished the next starts..The lie is simply an asset
    to be deployed when needed and often it is.

    In fairness, it is a very difficult task compiling this data but why in God name would you
    allow an entity to self-audit? You know that this data winds up for spending and other
    political consideration? Followed with this – the massive growth of the Regulator..

    To my knowledge, only the NY Post has reported questionable data reporting by
    governmental units…The MSM is in effect an organ of the state.

    This would be the same as Professor Chinn’s student grading their own test…Irregularities, nah, because
    as we all know college students do not lie and have high standards of ethos.

    Simply put, audits and data mining should not be the purvey of governmental units..They have no
    accountability nor neutrality..

    1. randomworker

      Hmmm…we should take the word of a notorious tabloid over, say, the Billion Prices Project for inflation data or vaunted private sector hero ADP for employment data? The conspiracy grows! Valerie Jarret is blackmailing the CEO of ADP!!! You heard it here first.

      1. Hans

        Worker, it is apparently you and others do not understand the BBP, which can not
        be an inflation data index, since it does not measure services, which account for
        for about 70% of the US economy.

        Furthermore, the reported stories in the NYP has been supported by governmental
        unit employees (whistle blowers)..But sure, just blow them off because they are a
        Conservative news outlet and don’t preach the virtue of leftwing dogma.

  33. Ricardo

    Menzie wrote:

    “What you intend to prove by quoting it verbatim, I don’t know. I am afraid the Review of Austrian Economics is not a venue that puts me in awe…”


    I know you reject data based on whether it is “robust” rather than its truth and I know that many Keynesians prejudge truth based on their prejudice of the source rather than the accuracy of the data so I quoted it so people would read it. The quote was for amusement and enlightenment only, but I appreciate you taking the time to find the article and give the source. Giving the source will allow others to read the truth in context.

    I would encourage you to be a little more skeptical about government statistics. As ray lapan-love notes about Krugman and his gullibility about the VA (of course we could spend pages and pages on Krugman’s gullibility), a little more diligence can make your analysis more realistic and the fallout might be that it would even be more robust.

    1. Menzie Chinn

      Ricardo: You have now repeatedly used the term “robust” as a characterization of data and placed in opposition to truth. I frankly have no idea what you mean by “robust data”. I’ve never used the term. Robust estimators, yes; robust data analysis, yes; robust data, no.

      My guess is that you are trying to say “truthiness” is more important than actual data. If so, please just say so.

    2. macroduck

      Ricardo, claiming to “know” things doesn’t make them true. Your comment does, however, show, again, how little concern you have for the truth. What you’ve done is to present false dichotomies – robust vs true, for instance – and bald assertions of what some scorned group – Keynesians this time – are prone to do when you seem hardly to know or care what members of that group actually think. Scurrilous behavior, surely, but also just so plainly stupid. It is nonsense to claim that Keynesians as a group share an attitude toward data – or toward ethics. What they share is an economic theory. And the vanity of pretending someone like you has any advice worth offering to Menzie, or to pretty much anyone, is just astounding.

      The Kochs and Scaifes of this world pay to keep the airwaves and the internet full of the kind of crap you peddle, but what I don’t think anybody outside their circle of troublemakers knows is how low they are willing to stoop. So please, in what may be the only contribution to the general pool of knowledge you ever make, do you make a fool of yourself on blogs for pay? Or does the case right-wing conspiracy have higher standards?

  34. jules defelices

    re: Ricardo and the “lunatic fringe” – I have had Econobrowser bookmarked for quite a while, but have not been a regular reader. But I was intrigued by this thread, and the way in which the moderators/regular contributors attacked Ricardo in, yes, an ad hominem fashion. Rather than parsing his intention: that perhaps we are taking our eye off the ball in looking at (let’s face it) a rather meaningless headline unemployment rate figure, they simply “killed the messenger”, as just another (Fox viewing, was it?) political neanderthal who needed a good slap-down. This contemptuous, dismissive tone toward “deniers” reminded me of a similar encounter I had with a website back in 2006. I had begun to doubt my long standing scepticism of AGM (“global warming”) and decided I would go to the source for much of what was promulgated on the web from a pro AGM perspective. “Real Climate” then was just such a blog, and I read (mostly the comments section, I am no scientist), the give and take of the true believers who ran the site, and the occasional sceptics (many with computer modeling, physics, and meteorological backgrounds) who would write comments. The tone was very similar towards non believers as in this thread: the collegiate certainty that can only come from an insular ivory tower perspective, and the conviction that enough data, algorithms, models can “tell the tale”; and worse, the arrogant dismissal of those who hold contrary views. I spent way too many hours at the site, but came away much enlightened on the viability of their worldview; needless to say my scepticism was only reinforced.

    The Ricardos are just so many rubes who don’t “get it” , and are easy fodder for the Krugmans, Menzies, etc. The irony is that this economic elite operate under the fiction that theirs is a discipline akin to science, when in fact it is nothing more than a branch of psychology, which itself is no science (if the word is to have any meaning). Perhaps it’s instructive that one of the seminal economic texts of the
    20th c. was called “Human Action”.

    1. Robert Hurley

      Why even comment when you think there is no science to economics. Why come to this site. Truly wierd!

      1. Hans

        Now, Mr Hurley, please tell the audience whether economics is more science or art? Please, no
        weird replies.

      2. jules defelices

        you clearly don’t understand the meaning of the word “science”, and delude yourself that your discipline is such. You confuse number crunching and their attendant algorithms (which always work…until they don’t), with scientific theory. You have the futile hope that you can mimic scientific induction -if only we had enough data! Back in the 70’s they had a word for this attempt in the social “sciences” to mimic the true scientific disciplines – physics, chemistry, biology, etc – “scientism”. Your comment indicates what a bubble you and your colleagues occupy. I humbly suggest a course in the history and sociology of science. Indeed, most of the econ, psych, soc staffs in this country could benefit, and perhaps even find some humility, by such a course. Your models that purport to understand the human spirit and predict behavior have done enough damage.

    2. genauer

      jules defelices

      The difference to the past and with Prof. Chinn to so many others is that deviating opinions get expressed and not censored.

      After Menzie sneered at the “Austrian Economics” , it remembered me, how Deidre McCloskey wrote about the terrible treatment of Hayek by the intolerant, arrogant american academic mandarins, in “Bourgois Dignity”, and how right he was with “The road to serfdom” when they were wrong.

      Ricardos persistence, maybe not every time perfectly worded, and him citing the text, reminded me,
      that I had analysed the two sources linked above, Solow, and the group of american economists running the measuring GDP site.

      And the differences confirm Ricardos claim. It is fascinating. What is the chance that one person, me, remembers in such a moment those 2 sources, which are beyond doubt, even for those, who don’t like Austrians : – ) And sporadically reads the Econbrowser.

      Today we have a similar situation.
      Arrogant, Ignorant american professors dish out freely and in volume advice to other countries, they know very little about, posterboy Krugman, especially if they are completely ignored by the politics in their US home country.

      Young authors abroad either accommodate to the ruling american opinion or get isolated, nothing new and openly talked about

      And the result is, that I have one more example, that the “Austrian” interpretation is actually much closer to the data, than the other from the Krugtron gang.

      1. Menzie Chinn

        genauer: I didn’t sneer at Austrian economics; I merely noted that the Review of Austrian Economics did not inspire me with awe. In point of fact, I am aware of no post where I have made mention of “Austrian economics”. Please provide a specific quote and URL, if you have evidence to the contrary.

        1. genauer

          Prof. Chinn,

          you are completely right to point out the difference of the

          a) “Review of Austrian Economics”,
          b) whoever claims to be the representative of “austrian economics” in the US
          c) and of that in the economists talk areas

          d) real present day AUSTRIAN Economists

          e) GERMAN Ordnungspolitik, then (Röpke, 1932 Crisis and cycles) and now

          which includes German companies bringing some union civilization into their last dark corners in the US : – )

          “VW paves way for UAW representation at U.S. plant”

      2. baffling

        “And the result is, that I have one more example, that the “Austrian” interpretation is actually much closer to the data, than the other from the Krugtron gang.”

        really? krugman, and other good economists, have had a pretty good grasp on the economy of the past six years. however, the austerity and austrian crowd, not so much. you may recall the 2010 open letter to the fed:

        “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.”

        and their response several years later is denial!

        genauer, i think you and others are in denial of the economic realities in the world today.

          1. baffling

            you can certainly address how the signatories of that letter were wrong, and how they continue to this day to deny they were incorrect. i have no problem per se that they were wrong-you go out on a limb and take a stand at your own risk- but to continue to deny that truth is what makes them lose all credibility. their denial of reality does not bother you?

  35. westslope

    Sad day for

    When posters post nonsense (as Ricardo did a while back with respect to Colombia), is not the best course simply to ignore them?

    I guess the netiquette espoused in UseNet days is now past tense.

  36. Ricardo


    I have a bit of a suspicion that you are intentionally distorting my use of the word “robust” to establish another straw man. “Robust” is not a term I normally use but read often from econometricians who describe their work as “robust.” I would never use “robust” to describe data.

  37. Hans

    Mr Hurley, I ask you a question about Krugmen and you simply launched
    an attack about my ideology.

    You want a debate, answer the question(s) or get off the stage.

    1. Menzie Chinn

      Hans: In 8 posts between 11:35 PM 11/10 to 12:16 AM 11/11 Pacific, you hurl content-free insults at various commenters. I suggest that you have little reason to ask others to leave for alleged behavior you yourself are pursuing, apparently enthusiastically.

      1. Hans

        Professor Chinn, no insults just frank characterizations or behavioral descriptions…

        Thank you for hosting me, Professor, as you are a kind and thoughtful man.

        I wish you well.

  38. Ricardo

    Okay, Menzie, that was a misstatement. I did not mean “robust” data but robust analysis. I stated it incorrectly.

  39. baffling

    wow, the lunatic fringe was out in force for this article! for those of you who are uncertain on whether you are part of the lunatic fringe, if this article raised your blood pressure, then you my friend are a member of the lunatic fringe. put on your tin foil hat and sunglasses, and look out for the helicopters flown by men in black suits!

    1. ray lapan-love

      Almost funny stuff, but I am fairly certain that your lacking critical thinking skills have allowed a dependency on generalizations and lazy conclusions. Some persons, for example, do not experience a rise in blood pressure while reading the most horrific passages, while the blood pressure of others rises from reading something as soothing as a romance novel. Then too, a reader’s mood can affect blood pressure from one sitting to the next.

      So…how can blood pressure serve as criteria for lunacy? In my experience, and especially in the context of blogging, ‘lunatic’ might loosely apply to those who resort to name-calling: ( “you my friend are a member of the lunatic fringe”), and usually, name-callers fail to support their claims. but, in your case, the support is just weak, as explained above; and so, words such as ‘hyperbolic’ and ‘juvenile’ would do better.

      Then there is this ‘fringe’ attachment. And again, in some loose sense one might say that such an inaccurate use of a common term might warrant, its user, as part of the ‘lunatic fringe’. But that would also be inaccurate… even applied loosely. This because the lunatic fringe has identifiable tendencies that are widely known and accepted, on the right, for example, the lunatics espouse racist and violent attitudes that are typically based in hatred. But nothing of that sort was expressed here. Nor did any lefties express any radical views. So why not strive for something insightful, something a bit more mature? And like I pointed out in another comment… the dems and repubs are equally beholden to the money monsters, so maybe it is foolish to be too near the center on either side in any way other than a subjunctive one.

      1. baffling

        ray, why don’t you assess the half a dozen or so insults hurled by hans in this post and tell me if there is not an element of “lunatic fringe” on this blog article. even when the evidence punches you in the face you cannot recognize it? baffling how you would try to defend those statements as anything but “lunatic fringe”!

        1. ray lapan-love


          Once again, you are simply not being honest with yourself about what it is that you are saying. My contention points out, or at least attempts to, that your comment is hyperbolic and immature. And your response to that does little other than provide further support to my comment. This: “wow, the lunatic fringe was out in force for this article!” is not substantiated by this: “ray, why don’t you assess the half a dozen or so insults hurled by hans in this post and tell me if there is not an element of “lunatic fringe” on this blog article. even when the evidence punches you in the face you cannot recognize it? baffling how you would try to defend those statements as anything but “lunatic fringe”! One person’s comments do not add up to “the lunatic fringe out in force”. Nor do insults carry much weight without meaningful support, there needs to be some ‘why’. Then too, I can’t find where hans ‘hurls insults’, but I only scrolled up and read a “half dozen or so” of his comments, but why should I be required to guess at what you find insulting? It seems likely too that you are confused about the difference between someone who disagrees with your ideology, and someone who ‘hurls insults’.

  40. AS

    I read above that some are in favor of single payer healthcare. If we do have single payer in our future, remember that the VA is single payer and has not generally been the “gold standard” of care. I spent over 20 years in health care administration (holding both financial and managerial positions) and never knew any private sector health care personel (MDs or administratiors or nurses with VA experience) who looked to the VA as a leader in health delivery or efficient management. At conferences where I met with international health care managers from single payer countries, the mangers I met did not praise single payer and said they were looking to the USA to develop the most efficient delivery system. Anectdotal, but perhaps relevant.

  41. Joseph

    Anecdotal, but perhaps relevant.

    Well, anecdotes as they say, are are not data. Actual survey data indicates that the VA hospitals overall rate higher than private hospitals for quality of care and patient satisfaction, despite a few overloaded, understaffed outliers in the recent news.

    1. AS

      It would be interesting to read such surveys. Very hard to believe given my career contacts. Also difficult to believe based upon recent 60 Minutes report.

    2. baffling

      joseph, your point is accurate. problems with the VA had to do with individual VA hospitals, not the entire system. there are many very well run VA hospitals in America today. it is a shame we continue to trash the good ones with the minority of troubled ones. in addition, one should note the VA is really a single provider healthcare system, as opposed to Medicare which is a single payer system.

      “I spent over 20 years in health care administration (holding both financial and managerial positions) and never knew any private sector health care personel (MDs or administratiors or nurses with VA experience) who looked to the VA as a leader in health delivery or efficient management.”
      the VA has been a leader in the implementation of electronic medical records for years, far surpassing the experiences of the private healthcare businesses. this has resulted in improved health care. i know of many health care professionals in the VA today who feel this way. as you say, perhaps anecdotal, but relevant.

  42. Ricardo


    Could you cite a source for you statement on the VA? I have never seen any study that rated the VA higher than private hospitals. I know when my daughter was doing her internship the VA was the last choice of everyone in her graduating class. She was forced to do half of her internship in a VA hospital.

    1. baffling

      my wife split her residency with a VA hospital and had no problems dealing with the logistics of the VA system. different patients with different types of problems, but the operation itself was actually preferred in the VA over the private hospital. the inclination going into the VA system is hesitation, but it seems many residents find the operating environment better in the VA once they actually experience the work. but again, you need to separate the patients from the operational character.

  43. JBH

    In response to a comment by Blissex on November 11th replying to a comment of mine:

    The corruption of one object acts on other objects. One rotten apple can and will rot the barrel, and a corrupt father will tinge the son. Acts of corruption have their effects along force vectors. Force vectors have magnitude and direction. The magnitude of corruption is proportionate to the number of connecting points, the potential power at the source, and the degree to which the source is corrupt.

    No entity has more connecting points than government. Whereas to a large extent you can avoid being directly affected by corruption emanating from a corporation since you have the choice of doing business with another, the government effectively exercises power over all things which thus permits of no avoidance.

    No corporate entity is even close to the government in size. Exxon has $500 billion in revenue. The federal government $3 trillion – 6 times that of Exxon. Revenue, of course, is only a partial and paltry measure of magnitude. Law and regulation are arguably magnitudes more weighty.

    One of the nation’s highest ranking public officials made a decision to redefine the word penalty to mean taxation. That swung the court from 4-5 to 5-4 and Obamacare was ruled constitutional, affecting over 300 million Americans directly or indirectly against the wishes of the majority. The words penalty and tax bear no relationship to each other, so it was a corruption of language to capriciously redefine the one to mean the other. No corporation could do this.

    The federal judiciary is corrupt to the bone. Attorneys General, political appointees one and all without regard to party, have been vastly corrupt going back many administrations. This alone, without recourse to the corruption in any other sector of government, is enough to trump ever other suit in the deck.

    Power tends to corrupt. And absolute power corrupts absolutely. This has been known since the dawn of time, though it took Lord Acton to frame it pithily. Where do you see absolute power but in government?

    There is no governor on government as profit and loss governs corporate behavior. You may say the voters are a governor. But this overlooks the propaganda put out by the largest propaganda machine ever known to man — the modern day US government that spoon feeds a corrupt mainstream media. The media being corrupt in that they grossly distort and/or leave out pertinent facts.

    The greatest corruption in the world in terms of impact on the future of the largest number of people emanates from: the Milner Group, Fabian Society, Chatham House, Rhodes Scholarship Fund, CIA, Bilderberg Group, Trilateral Commission, Council on Foreign Relations, Rockefeller, Ford, Carnegie, and other nonprofit foundations and organizations. This nexus is the New World Order that secretively for over a century has had as its aim the stripping away of sovereignty from nations so that a narrow group of wealthy elites and bureaucrats can dictate to the rest of humanity who in the end will effectively become serfs. This nexus is the deep state that controls the visible state through multiple channels including an ever-revolving door between these organizations and the highest levels of government.

    The by far dominant events that changed the path of this nation the last half century were the assassination of JFK and 9/11. Each was covered up by a presidential commission. If you seek out and read the best books on each to get a grasp of the larger picture, you will find your impression of corruption might change. I use the conditional because change depends not just on facts newly uncovered by an individual, but even more on being open-minded enough to engage in the process of searching for the truth.

    1. Menzie Chinn Post author

      JBH: Wow! Well, thanks for the trip down nostalgia lane — it’s been a long time since I heard about the Trilateral Commission.

      But I think you have omitted the most important group — the Masons!!!!

      1. T Thomson

        Thanks Professor Chinn – you have not only patience but a sense of humor. Bringing these folks out from under their rocks has given me great pleasure.

        Now please just curb your need to comment on WI politics and we will steam ahead merrily. Try a thread on alternative energy or cell towers. Or point out that the recent Chinese-American emissions ‘deal’ is meaningless in practice.

        Best damn musical I’ve seen in years.

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