More Proof That ‘Any Liar Can Figure’

Not worried about the jobless rate that was reported yesterday? Do you think that the United States is nowhere near the point of disaster that occurred in the ‘30s and continued until the early ‘40s?

Take a look at this -

By Pedro Nicolaci da Costa

NEW YORK (Reuters) - When economists tell us the current U.S. slump could never turn into another Great Depression, they all point to one thing: one of four Americans was out of work in the 1930s.

But since the definition of joblessness has changed over the years, this expert assessment might be too rosy.

This is something we were taught in school, but somehow forgot. Politicians in Washington are glad that most did forget it.

As many as 25 percent of Americans were unemployed during the days of bread lines that symbolized the Depression, but that figure is more than three times the current 6.7 percent unemployment rate, the economists say. Even the most pessimistic estimates only foresee the rate rising barely above 10 percent.

“We are in a very, very different place than the U.S. economy was in the 1930s,” James Poterba, president of the National Bureau of Economic Research told a recent Reuters Summit.

This agency is part of the same administration that told us that Saddam Hussein had Weapons of Mass Destruction. Do we really want to believe anything put forth from it?

Or are we? Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5 percent — more than double the stated rate.

Whoa! Those figures aren’t lies, but someone certainly ‘figured’ that you’d never get to see this.

“I expect that unemployment in the current downturn, which will be particularly deep and protracted, eventually will rival, if not top, the 25 percent seen in the Great Depression,” Williams said.

Not good news, is it? This is why the individual states are having so many problems remaining solvent. It is also why those who state that allowing the Federal government to try to bring us out of the problem is wrong are deluding themselves. These ‘blue dog’ Democrats, and ‘Toyota’ Republicans, are out of touch with reality. (I’m sure that some of the Republicans would say that World War II was what brought us out of the Great Depression, but we have had 2 unnecessary wars going for over 5 years, and things have only gotten worse)

He and other critics have one particular sticking point with the current way of measuring unemployment: the treatment of discouraged workers.

Under President Lyndon Johnson, the government decided individuals who had stopped looking for work for more than a year were no longer part of the labor force. This dramatically decreased the jobless rate reported by the government.

Bad policy then, and bad policy now.

“Both part-time workers wanting full-time work and discouraged workers tend to make the unemployment rate lower than it would otherwise be,” says Robert Schenk, professor of economics at St. Joseph’s College, Indiana.

The latest report, due on Friday, is expected to show another month of more than half a million job losses in December, and a jump in the unemployment rate to 7 percent.

Actually, it is 7.2, using the fudged methodology put into place by the Johnson administration. Also, certain areas of the country are much closer to that top percentage quoted from the pre-WWII era. I live in San Bernardino County, California, and by the fudged method, we are frightfully close to 10% unemployment. All of California is above the national rate.

However, some economists, including Kenneth Rogoff at Harvard University, now say joblessness could top 11 percent. Under Williams’ methodology, that picture might look much more like the Great Depression.

So… why should we use the old method of reckoning? For the same reason that we should face up to the fact that greed and mental laziness (or incapacity) has put us where we are, and using our brains, finally, is the only thing that will make our lives better.

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