Skip to main content

We deserve truth on those economic numbers

Published January 29. 2011 09:00AM

In my early career, I stumbled upon a book called How To Lie With Statistics by Darrell Huff. Written in 1954, this book described how statistics could be used to support an erroneous or entirely false claim.

I believe that the Administration has been lying with statistics from the very beginning. As an example, let's look at last July when the Obama Administration reported saving or creating over 3 million jobs, with another 500,000 to be saved or created before the end of the year.

This is an unsupportable claim as one cannot determine how many jobs the Obama Administration actually saved. For my part, I believe that if these jobs were actually created, then the unemployment rate wouldn't be pushing 10 percent. If the jobs were saved, then the economy would have recovered by now.

There is a slight improvement in the economy this month. With the extension of the Bush tax cuts, We The People and Corporate America have started spending again. Is this the recovery? If so, it is a jobless one. The people who have lost their jobs, and there are millions of them, know the truth. It is very unlikely that they will be rehired in a position similar to the job they lost. Part of the reason is that corporations have learned to operate efficiently with fewer staff. This is our new normal.

High unemployment will be with us for the next two to five years. So what does the government do to "cook the books" on the unemployment numbers? They manipulate how they report them.

Let's take a look at how they do this. They created a six-tiered model to measure what they call labor underutilization. (Unemployment is a dirty word, just as the word spending has been replaced with the word investment). If we need to quote a low unemployment number, then we use the U-1 measurement that includes people who are unemployed 15 weeks or longer. Seasonally adjusted this gives us a 5.6 percent unemployment rate.

The oft-quoted official unemployment rate is the U-3 measurement which is the underutilization as a percentage of the civilian labor force. Seasonally adjusted this is 9.4 percent. If you wish to have a higher number, then you can include people who have taken part time work to pay their bills and feed their families. These people are known as "marginally attached to the labor force". This brings our unemployment to a seasonally adjusted 16.7 percent. Thanks to "transparency" this data is available from the US Bureau of Labor Statistics at

These numbers do not include the people who have taken full-time jobs that are far beneath their skill level. We call these unfortunate souls the underemployed. The government does not produce a statistic for the total unemployment plus the underemployed, but I found data this rate in the 25 percent range.

The highest unemployment rate during the depression was 24.9 percent. This was probably before the government learned to lie with statistics so I consider it to be reasonably accurate. Depending on the unemployment indicator used, the "recession" might really have been a "depression."

The impact of such high unemployment has been smoothed by the extension of unemployment insurance benefits to approximately 3 years. We The People are not stupid. We know that the Administration is underreporting the numbers. We just have to look to our neighbors who are not working or our university graduates who have not found jobs. If you are unemployed, you understand how serious this situation is and the effect it is having on our citizens. Additional information is available at

The next thing I'd like to look at is the consumer price index that tracks the official rate of inflation. According to the government statistics, inflation was 1.5 percent over the last year. Anyone who goes to the grocery store or buys gasoline knows that inflation has been much higher.

Let me give you some examples of price increases between January 2009 and January of 2011. Gasoline has gone from the $1.83 a gallon to $3.15 per gallon. This is a 70 percent increase. West Texas crude oil is up 135.9 percent. Corn has increased by 78 percent. Sugar has increased by 164 percent. Yet the consumer price index has only gained 3.8 percent in the same timeframe.

This is illogical to me as food and gasoline costs are major household expenditures. I believe someone is lying with statistics to understate the damage this Administration has done to our economy.

Let's look at some other items that indicate the failure of the Obama Administration. The number of people on food stamps has gone from 32 million to 43.2 million. The number of properties currently in foreclosure is sitting at about 2.87 million homes.

The national debt has gone from $10.6 trillion to $14 trillion. When you look at the real numbers, things look pretty bleak. For additional information on the performance of the current Administration you can go to:

The 2011 State Of The Union address was a dismal failure. In my opinion, the president did not portray the real issues our nation is facing, nor did he offer viable solutions. These hard times require a president who is inspiring, pro-business, and action oriented.

President Obama is eloquent in his speeches but when it comes to the economy his actions leave much to be desired. To be effective the State Of The Union address should have described the dismal state of our economy, with specific examples. Then we should have heard the president's plan to turn the economy around in the coming months. The plan should have included massive tax cuts for corporations that hire workers or repatriate factories. There should have been small business incentives to encourage economic growth in our communities.

Controlling spending and reducing the deficit should have been spelled out more clearly. We must pay down our colossal debt and we must do it soon if we are to be credible to the bondholders and encourage corporations to invest in our country.

The American people come together when the chips are down. They solve problems as individuals and as a nation. We need to harness the power of our fellow Americans to ensure a speedy recovery from our economic malaise. I believe that the people will restore this country to financial strength through their own efforts despite the government's inaction.It is time for the Administration to stop fooling us by lying with statistics and give us the truth. When presented with the truth we will face our problems and work together to rebuild the American economy.

© 2011 Gordon Smith - All Rights Reserved

Classified Ads

Event Calendar


November 2017


Upcoming Events

Twitter Feed

Reader Photo Galleries