Thursday, June 24, 2010

Government Alchemists

"At 8:30 AM on Friday , June 4, the Bureau of Labor Statistics released its much anticipated monthly jobs report. ... The jobless rate decreased only because hundreds of thousands of people became so discouraged, they dropped out of the workforce. ... There is just one problem: these numbers are wrong. They always are. The jobs numbers are revised each month and then again in subsequent years. Sometime later this year, we may learn that twice as many jobs were lost in May as we thought or that, actually, hundreds of thousands more were created. ... If you examine almost any government statistic or calculation more closely, you will find that it is a guesstimate. ... On almost every level, we are making national economic policy on the basis of problematic data and inadequate models. ... We need better models, and we need them urgently", Zachary Karabell at Time, 21 June 2010, link:

I draw a different conclusion. We should stop trying to control the economy. Let it cycle by itself. Recognize there is no statistic we can collect which will give us the magic lever with which to ensure economic stability. It is human arrogance that leads our experts to think they can control anything.

2 comments:

Anonymous said...

True leaders would recognize that the nation will be strong in some years and weak in others... most factors are outside of their control...

Leaders should guide their people create a store of wealth/supplies/savings to weather the poor times...

It's shameful how our leaders want Americans to incessantly consume.

This is the road to ruin and an ecological disaster. And it's fueled by Ben Bernanke's printing press.

Ubu said...

Your advice sounds like vintage Hayek, and it's spot on target. The numbers are massaged to provide PR pep talks from the touts: "go buy a car and a house and a TV you can't afford, things are turning around."