Government numbers – can they be trusted?

by thoughtfulconservative

Dad29 last week posted a chart from the San Diego Union-Tribune showing inflation rates using different measures.

[Well, I was going to put the chart here, too, to save y’all some clicks, but WordPress is acting up a little with the media loads, so I guess you’ll have to go to Dad29 or the Union-Tribune charts.]

While the article connected with the chart tells part of the story, this one from the St. Pete Times tells more. I summarize below:

1961, implemented a few years later, was that out-of-work Americans who had stopped looking for jobs — even if this was because none could be found — were labeled “discouraged workers” and excluded from the ranks of the unemployed, where many, if not most, of them had been previously classified.

1969, Lyndon Johnson orchestrated a “unified budget” that combined Social Security with the rest of the federal outlays.

Richard Nixon, asked his second Federal Reserve chairman, Arthur Burns, to develop what became an ultimately famous division between “core” inflation and headline inflation.

1983, the Bureau of Labor Statistics (BLS) decided that housing, too, was overstating the Consumer Price Index.

1990, “reoriented” U.S. economic statistics principally to reduce the measured rate of inflation. His stated grand ambition was to move the calculus away from old industrial-era methodologies toward the emerging services economy and the expanding retail and financial sectors.

1994, the Bureau of Labor Statistics redefined the work force to include only that small percentage of “discouraged workers” who had been seeking work for less than a year. The longer-term discouraged — some 4-million U.S. adults — fell out of the main monthly tally.

For its last four years, the Clinton administration also thinned the monthly household economic sampling by one sixth, from 60,000 to 50,000, and a disproportionate number of the dropped households were in the inner cities.

2002, the administration did introduce an “experimental” new CPI calculation (the C-CPI-U), which shaved another 0.3 percent off the official CPI.

2006 it stopped publishing the M-3 money supply numbers, which captured rising inflationary impetus from bank credit activity.

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