Obama's Phony Recovery
By DICK MORRIS
Published on
TheHill.com
on February 14, 2012
President Obama, faced with no recovery from the recession as he
enters an election year, has come up with a handy political gimmick:
Fake the statistics.
The economic data that portend recovery are totally and completely
inventions of Obama's political operation. The reality is that no
recovery is taking place!
Economist James Fitzgibbon, of the Highlander Fund, explains how cooked
the economic statistics on which the president bases his claims of
recovery really are.
Begin with "gains" in the stock market. Fitzgibbon explains that they
are no indication of changes in the public mood because the public isn't
doing the investing anymore. He notes that HFT (high frequency trade
computers) now "account for 80 percent [of the market's] daily business.
No one else is left because they lost their money in 2008 and the public
has fled the market ... Total NYSE volume is 67 percent lower on average
than in 2008. Volume is 29 percent lower this year compared to 2011. The
prices [have] no serious meaning."
Have consumers, as alleged, started borrowing again? Not really.
Fitzgibbon explains that "credit use has surged only because the Obama
administration changed the student loan program to a direct program and
those loans are now counted as part of this metric. It is not comparable
to anything prior to 2011." And, he adds ominously, "massive credit card
use as measured against actual verifiable sales shows the increase is in
borrowed funds to pay for food! Not my idea of a healthy sign."
How about lower unemployment figures? Fitzgibbon says they are a "joke."
He says that the Bureau of Labor Statistics has "completely changed the
... metrics as of January 2012. None of the current percentages are
relatable to anything prior to 2012!" He points out that the January
unemployment data are heavily adjusted for "seasonal variations." He
notes that "the actual data [show that the economy] lost 2.7 million
jobs in January." And that's just the numerator. For the denominator --
the number of people in the workforce -- the data "also shows about 1.2
million people magically left the workforce." He says one has to go back
to the early 1980s to see labor force participation as low as it is now.
Auto sales? He says "auto sales are when the manufacturer dumps cars and
trucks on a dealer. Inventory stuffing! It has no relationship to actual
sales to a consumer. Thanks to Obama, GM dealers are drowning in product
no one wants to buy. It is a meaningless data point. Only
dealer-to-consumer data is useful. It is not showing any growth at all."
Housing? He says positive news in this sector is unreliable. "The raw
data we get shows it is worse than last year and in some regions [the]
worst ever since the '60s."
So it appears that Obama's reelection strategy hinges on asking people
to believe the data he puts before them rather than the evidence of
their own eyes. It won't work.
Any economic recovery is only publicly noticed eight to 12 quarters
after it has taken place. Ask George H.W. Bush, who lost the 1992
election despite very positive economic news at the end of his term. Or
ask Clinton, who lost Congress despite two years of favorable
job-creation numbers. It takes awhile for the good economic news to sink
in. And, when there is no good news, just faked government propaganda,
it takes even longer to sink in!
People will understand that Obama's data are a lie. The economy is not
some abstract issue. Real people do not depend on changes in the
unemployment-rate data to gauge their mood. They are more interested in
whether they can get good jobs themselves. Obama's attempt to rig the
statistics won't work. Indeed, it is a pathetic attempt.
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