Saturday, January 08, 2011

The Official Unemployment Rate Is A Conventional Lie [Anthony McCarthy]

Someone had better get through to Barack Obama that a .4% decrease in the official unemployment rate won't get him out of trouble with anyone but the Democratic side of the elite consensus. Hearing his stentorian voice declaring that the economy is improving is not going to go well with the many who can't find work, whose unemployment has already run out, whose resources have already or will soon be used up and those who are their families and friends. If I had to give him some merely political advice, it would be that his strong, confident voice declaiming those lines are a political liability to those who have every reason to believe he is strongly and confidently lying about their lives. His embrace of the conventional, elitist economics that led us into disaster leaves him vulnerable to seeming out of touch, if not dishonest. President Franklin Roosevelt's far more aristocratically accented encouragement would have had the same effect if it wasn't backed up by a vigorous rejection of the orthodoxy that had driven huge numbers of people into destitution.

Barack Obama will cling to a drop in the official unemployment rate as it goes down millimeters at a time, because it's what he's got. But the official unemployment rate is a fraudulent number, excluding those who have been looking for work and not finding it long enough to have stopped looking during the period measured. The number doesn't measure all of the unemployed. But, being a duly credentialed product of our educational elite which trades in the conventional instead of the really honest, I don't think Barack Obama can bring himself to admit the numbers are dishonest as a means of determining the number of people being driven into poverty and destitution through unemployment, it was and continues to be far worse than is measured.

The numbers used to talk about money and its availability for use by people in order to live a tolerable life are created by economists and then are treated as if they had some atavistic power and significance.

And, to an extent, they might have some limited usefulness in thinking about it but, as all formal, conventional, abstractions they quickly take on a life of their own and become useful in creating cover stories that mask reality. Since the use of those numbers is, largely, done by people getting paid to do it, and since those who can pay are primarily interested in their own financial situation, they will tend to serve the purposes of the elites who commission their manipulation. It is in the interest of the elite to not talk about how many people the miraculous, omniscient Market doesn't serve, how large the real number of people without incomes is and has almost always been. It doesn't want the real story of who is sacrificed to their idol to get out because their narrative suffers when reality is the topic.

Earlier this week, I was reading about how one of the foremost economists of my youth, John Kenneth Galbraith, fell out of fashion as his historically based economics was overtaken by the vogue for technical analysis and a scientific approach. This has happened before, in the history of economics, the late 19th century contained an impressive amount of mathematical manipulation. That the massive intellectual effort didn't do much to prevent the economic catastrophes of the time or the subsequent decades, didn't keep it from being an officially impressive exercise and those who did it from being regarded as wise and oracular as they balanced their equations. I don't think that anyone should let the numbers fool them, science is an attempt to find reliable knowledge about the world and universe independent of desired outcomes. One of the most basic requirements of science is that the measures used have to be honest, themselves. The official unemployment rate is clearly a dishonest number and anything mimicking science done with it will extend that dishonesty into false conclusions. This is certainly known to those who do it. Declaring that their intentions take that into account is belied by the language they use as they cite it*.

I'd like an answer as to why a number that is so important in judging, not only the efficiency of the economy but its justice is allowed to be so obviously a lie, why economists from right to left accept it and use it in their manipulations. I can understand why they do it on the right, it serves their purposes which have little to nothing to do with honesty. Why the left accepts it is the real question**.

* As in the defense of the Consumer Price Index, the official dodge is that it's not supposed to be used in the way it is even as they discuss how it is commonly used and, sometimes, that its use gives a false picture of the economic lives of real people, who are often far worse off than the official numbers would lead you to believe.

**I suspect that some of it is the quiet desperation, the result of the pious yearning to be academically respectable, especially for those of us who didn't inherit that form of respectability. For all of the undoubted benefits of formal learing, academic respectability includes the indoctrination into the passive acceptance of vast rangers of merely conventional measures and definitions that have imperfect or even no real existence. You can't be officially well educated, unless you have imbibed large amounts of it. Being academically accepted as a motivation for people to put blinders on their own eyes is another thing that gets far too little notice. The slightest deviation from the common received way of thinking is one of the things which causes the most violent reaction among the soft, complacent, educated class in the English speaking world. Which can be socially, if not economically, catastrophic in a way that constitutes the daily experience of the underclass.

It is possible to have a more realistic view of life and a formal education is useful for that. But it's never possible to have more than a small view of reality. Being honest about the limits of your view is a good way to prevent some of the disabilities of that fact.

Often, the incomes of those with educational credentials are sufficient so they can take the padded numbers reported as a picture of the economy with equanimity as they mask the catastrophic situation for those with smaller incomes. Sometimes they forget or never knew the mixture of unmet needs, insecurity, and the fear of falling into real, homeless, destitution, that is the common experience of a huge percentage of the population. The margins between the official and the real unemployment rates, between the official Cost of Living and the real ones, give them a knowledge based in a direct experience of real life that makes confident declarations based on the phony numbers the basis of lasting distrust. That is the real danger of Barack Obama's economic policy mixed with his deep, confident voice. It's fuel to the fire of their anger.