“Quack Doctors in the House” by Jim Willie discusses some of the statistical tricks being used to paint a rosy picture of the US economy. In addition to manipulation of the Consumer Price Index, which I’ve previously mentioned, he also discusses similar treatments of the GDP and jobs growth. Now there have been hundreds of reports in the mainstream media about job growth stats. Did you notice any of these articles pointing out that much of the “growth” comes from assumed but undocumented “growth” via a “Birth-Death model“? In this model, the government assumes that jobs coming in and out of existence from newborn and newly dead businesses aren’t documented and thus must be added (via guesswork). Jim Willie makes this point:
JOBS GROWTH: The jobs picture is ripe with distortion. The April, May, and June job growth reports incorporated Birth-Death model lifts greater than the total number. June gains of 121k jobs included 175k mythical B-D jobs. May gains of 75k jobs included 211k imaginary B-D jobs. April gains of 138k jobs included 271k fictitious B-D jobs. Of course, the press and media failed to notice this point of embarrassment. Without these convenient B-D modeled new jobs, all three months would have registered a DECLINE in job growth, a point not even mentioned by the sleepy press & media. Moreover, newly created jobs continue to come far under the population growth requirement of 150k jobs monthly. The Birth-Death model remains a principal job producer, without any basis in reality, certainly no scrutiny.
Mike Shedlock also offers some insight into the questionable Birth-Death adjustments on job growth.
So why do I mention this here? Understanding the declining jobs market as well as the realities of inflation and a weakening economy are important to the concept of provident living and the temporal welfare of our own families as well as those around us. The Lord’s counsel becomes more relevant all the time: stay out of debt, save and prepare for rough times in the future, have a food storage program, and get all the education you can.
And let me thrown in my own two cents: make sure your investments include at least a little of something that won’t evaporate in an economic slow down or in a time of massive inflation. The scriptures warn us not to put our trust in gold and silver – please don’t – but they are far more likely to preserve their value over time (or greatly increase) than the US dollar. (And now, with exchange traded funds like SLV and GLD, it’s usually possible to include these in your 401k – but that’s another story.)
And here’s an interesting observation on the GDP in another article from Jim Willie:
The US GDP (economic growth) is exaggerated by 4% to 5% easily and most assuredly. Designed to remove price inflation from economic activity, the GDP Deflator is even lower than the goofy CPI. As higher costs filter through the economy, too little price inflation is removed. The result is that we label “inflation” as “growth” and claim strength, which is pure horse manure abuse of statistics, my chosen field. My favorite quote from all last year in [my] public scribbles is the following:
Any lack of proper adjustment in nominal GDP is falsely labeled as real economic growth. In my view, most of it comes from inadequate adjustment of higher energy and material costs, even food costs. Ironically, we boast that the economy is strong enough to handle higher energy costs, but evidence of that strength to handle more burden is distorted growth from wrongful (favorable) adjustment of those same energy costs! Most economic growth comes from hedonics to information technology and improper removal of general cost increases. The most glaring obvious higher cost born by the public and business world is for energy costs… Our GDP growth is mostly exaggerated technology spending and price inflation!
Look, I know some economists can produce seemingly great reasons for why the current Deflator and CPI are used and why they differ, but it’s hard to believe that there is not serious temptation to select criteria that tend to make things look a little better.
Interestingly, the surprisingly low but still positive GDP stats reported yesterday were taken as good news by Wall Street. Since the economy is showing less growth than expected (it might be negative growth if better stats were used), maybe the Fed won’t think we are growing too rapidly and maybe they won’t inflict painfully higher interest rates on us, thus causing the economy to really tank, and since they might quit inflicting so much pain, maybe there is a chance for real growth – and so stocks shot up on the bad economic news.
This has become a recent trend in the market: bad economic news creates an aura of hope that the Fed (the unaudited, secretive masters of the economy – anyone troubled by that and by all the power concentrated in the hands of a few unelected officials??) might gives us a break, resulting in hope that drives stock prices up (after the terrible beating they’ve had when Bernanke growled a time or two). When the market depends on hope fueled by bad economic news, something is seriously wrong.
Wow. I just learned something. Thanks for posting this.
The “birth-death” model sounds eerily similar to the LDS Church’s claims of yearly growth…
Hi,
My comment is about at totally different matter.
Ron Priddis has just posted a response on the Book of Mormon and the DNA-issue on http://www.signaturebooks.com
See this url
http://www.signaturebooks.com/excerpts/Apocrypha2.html
It is worth reading.
Jeff, can you explain exactly how we should account for jobs that were created by new companies? If they weren’t counting them, you’d probably be blasting the fed for giving us depressing economic statistics when they’re using faulty methods, but this time not including the Birth/Death numbers.
Ron Priddis makes some reasonable points, in general. I am interested to see Ostler’s response. Brother Ostler’s approach is not based so much on an analysis of scientific evidence as I think is needed for the DNA issue, and I feel some of the other articles on the topic are better references.
But I also think Ron strains too hard to make Blake’s position seem self-contradictory. There is a consistent stance one can take: beware of importing modern assumptions into the text, but recognize that we must read between the lines to interpret the text in an ancient context.
So, Mormontramper, do I take your screen name as a reflection of some kind of hostility? Or is tramping your way of expressing love for your Mormon brothers and sisters?
Hi Mormanity!
No, I’m not an anti-Mormon and neither do I have any wishes to offend my brothers and sisters in the Church. In fact I am a very active Mormon. I pay my tithing and do visit the temple every month. I do also have an important calling in the church and I do raise my kids in the gospel.
In fact I love the Church!
I also love Church history. Especially the books and articles written by D. Michael Quinn. On the whole he is quite fair I think. I liked his article on the supposed 1820-revival.
When it comes to the Book of Mormon and the DNA-issue there is a lot to be said. Personally I agree with Stephens and Meldrum and I also find Whiting’s article very valuable. Even your own (sadly un-updated) article on the issue is worth reading.
Priddis article on Signaturebooks.com rises two important questions where LDS-apologists like David Stewart misleads the faithful latter-day saints.
The first question do we find under the title “Withholding evidence”. Some apologists like Stewart (and this can be said about you as well) claims that we don’t know the DNA for Lehi and Sariah. Actually we do! We know that the Israelites sprung from the Canaanites. We also know the existing DNA (Y- and mtDNA-) lineage families in the Middle East. We can safely assume that the whole colony carried some of these lineages in to the New World. If someone in the company carried with them some of the mtDNA-lineages (A, B, C, D or X ) that we find amongst Native Americans in the New World today we should expect to find the same lineages in the Middle East today which we don’t.
Stewart argues (wrongly in my opinion) that we don’t know what lineages the members in colony carried with them and that we therefore are hindered to compare our DNA-samples from today because we don’t know what to expect. Stewart expresses this by saying we lack “controls”. The reader of DNA articles can easily confuse haplotypes and haplogroups, and more important confuse individual recombinant DNA with DNA (Y- and mt-) lineage families. The latter DNA doesn’t change much over time and there exists little more than twenty major family groups represented by letters A, B, C, etc. Each group can thereafter be divided in haplotypes. It is possible to study this DNA in population studies. We do know for sure that 99,5 per cent of the Native Americans carries the same lineages that we find in Asia. We also know (almost) for sure what lineages Lehi and company brought with them. We know that the latter lineages are those that we find in America.
Bad apologist argumentation is sometimes more harmful to the church than the writings of church critics.
The second question is more interesting. If a small colony brought with them some lineages from the Middle East and intermixed with Native Americans to what extent should we be expect to find any traces of these in the DNA (Y- and mtDNA-) lineages? This question is not fully addressed in my opinion. Whiting, Stephens and Meldrum claims that we could not expect to find any traces for various reasons. Southerton and Priddis argue otherwise. As I understand this it should be fully possible to make a computer simulation via a statistical model. If a little colony came to Mesoamerica they would meet let say a couple of thousand inhabitants (not sixty millions). What would a likely result be if the newcomers would be regarded as a new “elite”? Surely one has to deal with the extinction that was the result of the great slain in BofM and the diseases introduced by the Spaniards.
Speaking about withholding evidence: I find Brian Stubbs language analysis encouraging. I’m not an expert in that field however. I haven’t found much discussions of that issue. Personally I find these findings troublesome for Southerton/Murphy/Priddis.
Greetings from Scandinavia! I apologize for my poor English (certainly full of error).
Still a firm beliver!
Mormontramper
A CORRECTED REPLY – DO NOT READ THE PREVIOUS ONE FROM ME!!!!
Hi Mormanity!
No, I’m not an anti-Mormon and neither do I have any wishes to offend my brothers and sisters in the Church. In fact I am a very active Mormon. I pay my tithing and do visit the temple every month. I do also have an important calling in the church and I do raise my kids in the gospel.
In fact I love the Church!
I also love Church history. Especially the books and articles written by D. Michael Quinn. On the whole he is quite fair I think. I liked his article on the supposed 1820-revival.
When it comes to the Book of Mormon and the DNA-issue there is a lot to be said. Personally I agree with Stephens and Meldrum and I also find Whiting’s article very valuable. Even your own (sadly un-updated) article on the issue is worth reading.
Priddis article on Signaturebooks.com rises two important questions where LDS-apologists like David Stewart misleads the faithful latter-day saints.
The first question do we find under the title “Withholding evidence”. Some apologists like Stewart (and this can be said about you as well) claims that we don’t know the DNA for Lehi and Sariah. Actually we do! We know that the Israelites sprung from the Canaanites. We also know the existing DNA (Y- and mtDNA-) lineage families in the Middle East. We can safely assume that the whole colony carried some of these lineages in to the New World. If someone in the company carried with them some of the mtDNA-lineages (A, B, C, D or X ) that we find amongst Native Americans in the New World today we should expect to find the same lineages in the Middle East today which we don’t.
Stewart argues (wrongly in my opinion) that we don’t know what lineages the members in colony carried with them and that we therefore are hindered to compare our DNA-samples from today because we don’t know what to expect. Stewart expresses this by saying we lack “controls”. The reader of DNA articles can easily confuse haplotypes and haplogroups, and more important confuse individual recombinant DNA with DNA (Y- and mt-) lineage families. The latter DNA doesn’t change much over time and there exists little more than twenty major family groups represented by letters A, B, C, etc. Each group can thereafter be divided in haplotypes. It is possible to study this DNA in population studies. We do know for sure that 99,5 percent of the Native Americans carry the same lineages that we find in Asia. We also know (almost) for sure what lineages Lehi and company brought with them. We know that the latter lineages are absent among Native Americans beside those examples which are due to modern post-Columbian intermixing.
Bad apologist argumentation is sometimes more harmful to the church than the writings of church critics.
The second question is more interesting. If a small colony brought with them some lineages from the Middle East and intermixed with Native Americans to what extent should we expect to find any traces of these lineages in the DNA-samples taken from Native Americans today? This question is not fully addressed in my opinion. Whiting, Stephens and Meldrum claims that we could not expect to find any traces for various reasons. Southerton and Priddis argue otherwise. As I understand this it should be fully possible to make a computer simulation via a statistical model. If a little colony came to Mesoamerica they would meet let say a couple of thousand inhabitants at the most with they could intermix (not sixty millions). What would be a likely result of this intermixing today if we consider these newcomers according to BofM as a new “elite”? Surely one has to deal with the extinction that was the result of the great slain in BofM and the diseases introduced by the Spaniards, but still it would be possible to create a picture of what to expect. Wouldn’t it? Am I wrong here?
Speaking about withholding evidence: I find Brian Stubbs language analysis encouraging. I’m not an expert in that field however. I haven’t found much discussions of that issue elsewhere. Personally I find these findings troublesome for Southerton/Murphy/Priddis and encouraging for us Mormon trampers on the fringe. The members in the church (this is my opinion) do actually believe that there exists more evidence in support of BofM than what is the case. However I am satisfied with the stuff that you have listed on your “BofM-evidences” page. Our testimony must rely on a testimony in the end.
Greetings from Scandinavia! I apologize for my poor English (certainly full of error).
Still a firm believer!
Mormontramper
The “birth-death” model sounds eerily similar to the LDS Church’s claims of yearly growth…
The was a news report a while back that explained the Church is growing faster by conversion then by birth rate. It may have been different years ago – but in this day and age, it’s growing more by new memebers then by members being born in the church.
Sort of the same way, Utah is loosing it’s LDS majority…