I saw it most dramatically in the Democratic Party's response to President Biden's debate performance, this total disconnect with reality, followed by an abrupt and dizzying volte face. How could they not have known about his cognitive decline, which had been obvious for years, and why was it so suddenly a matter of national panic? (I've already written about that.)
When it comes to our country's economic situation, the same phenomenon has occurred. We go for years and years of ever-increasing prices, obvious to anyone who does his own grocery shopping, or fills up his own gas tank, or has to find his own place to live, and the government officials tasked with keeping us informed insisted there was no inflation, could be no inflation, inflation was a thing of the past.
Jobs? They insisted that unemployment was down, and job creation up. The people knew better—we knew that high-paying jobs were still going away; it was low-paying service jobs that made up the bulk of the deceptive numbers. We knew that what looked like good employment numbers was actually people taking on second or third low-paying jobs in order to make ends meet.
We were told again and again that the job market is good, there's no inflation, and the economy is robust. But with a reversal as sudden as the evaluation of the state of President Biden's mental faculties, inflation is now a critical problem, the unemployment numbers are frightening, and the economy needs to be saved. (By the same people who have been managing it for almost four years now?)
How is it that there is now panic over something that so many of us have been worried about for years? Where have these people been?
(As an aside, how is it that Vice President Harris thinks we should trust her to "fix" the housing problem, when she bears responsibility for adding nearly 10 million people to the population pressure of those who need housing?)
That's a long introduction to this video interview, from August, with Jeremy Tucker. He has a good grasp of economic theory and reality, and is worth listening to. However, it is long (over an hour), as too many interviews are. There is a full transcript below the video, for those who prefer text. Here's an introduction:
Just one set of numbers, released on Friday morning, showing a small increase in the unemployment rate, completely shifted the attitude in Washington, Wall Street, and the mainstream media. We went from celebrating a booming economy and the absence of inflation to suddenly believing that a recession is probably already here. The world seems to be falling apart, and panic selling begins. It’s an overreaction, to say the least. First, the data is already a month old, so the recession didn’t just happen on Friday. It was from the previous month. Secondly, the numbers weren’t particularly bad compared to the past. It has been obvious to me and many others for at least two years, if not longer, that we never fully recovered from the lockdown period. Worker participation ratios and labor participation rates are still below 2019 levels.
When we analyze the jobs data, we see a growing gap between the household survey and business payrolls, indicating potential double counting in the establishment survey. This gap never existed before, but now it’s widening. It’s becoming more extreme, with one set of data dropping and the other rising. This has been happening for several months over the past year.
Additionally, there have been revisions to the jobs data every month. For example, they would initially report 220,000 jobs, but then revise last month’s 190,000 jobs down to only 90,000 jobs. Where did those jobs go? It seemed like all the jobs were being pushed forward a month and taken out of the previous month’s count. There have been illusions in the data all along. I lost interest in the headline unemployment numbers because they don’t include discouraged workers or account for people who have dropped out of the workforce. The unemployment data only counts those who are actively looking for jobs and can’t find one. While that number may be relatively low, it doesn’t mean a healthy job market.
In other words, the job market has not been healthy for a very long time. There was something that shattered the psychology of denial on Friday morning. It had something to do with Wall Street and the attachment of Main Street Media to the headline unemployment number. Once that news broke, everything else crumbled, and suddenly someone shouted, “There’s an elephant in the room!” and chaos ensued.
That's only a taste. Even the transcript is long, and technical in places, but is a good introduction to the sleight-of-hand that our government has been using to play with the economic numbers on which so much depends. And not just the current administration, either, though it's increasingly egregious.
