Commentary
Since I began writing about questionable government economic statistics, I’ve received a flood of letters from current and retired accountants. They are excited that I have delved into this topic and have shared various insights. One particularly interesting point raised by a correspondent is the lack of numerical intuition among employees. They often fail to see when their figures don’t add up.
The blame, according to my correspondent, lies with technology. In the past, mathematicians and students had to rely on slide rules to perform calculations, requiring them to have a keen sense of numbers and the ability to manipulate decimal points accurately. This skill fostered a strong understanding of numerical logic. However, with the advent of calculators, this intuitive skill has been lost as machines now handle the calculations.
The introduction of computers further exacerbated this issue, as people now rely on tools without fully understanding the calculations behind them. Many data collectors in government and those reporting data operate within a broken system where no one is held accountable for inaccuracies. This results in flawed GDP figures, inflation indexes, and job data that go uncorrected.
This problem is not new and has plagued government data collection for years. An economist named G. Warren Nutter challenged the economic data coming out of the Soviet Union in the 1950s and ’60s, predicting that their growth would not surpass that of the United States. Despite facing skepticism from mainstream economists, Nutter’s analysis was vindicated after the Cold War ended.
Nutter’s story serves as a cautionary tale about the dangers of bureaucratic systems producing desired outcomes rather than accurate results. The complexity of these systems often leaves room for errors and manipulation without clear accountability.
Reflecting on Nutter’s work, one can’t help but wonder if similar forces are at play in the United States today. The passage from Nutter’s book reminds us of the limitations and biases present in economic statistics across all countries, emphasizing the importance of critical analysis and transparency in data collection.
The figures are vulnerable to manipulation and distortion by interested parties, with limited oversight from independent factseekers. Government and statistical agencies may succumb to the temptation to manipulate data for their benefit if they believe they can get away with it.
The Biden administration, for instance, has a strong incentive to present favorable data despite contradicting alternative sources. Grocery prices, housing costs, insurance premiums, and healthcare expenses have all surged significantly, with private sector reports often showing figures double than what is officially reported.
There are discrepancies in job data and other key indicators, raising concerns about the accuracy of government statistics. This practice of inflating data has been observed in authoritarian regimes like the Soviet Union and China, as well as in Latin American countries, North Korea, and possibly Russia.
It is naive to assume that the United States is immune to data manipulation. A realistic assessment of the past few years may reveal a lack of real economic recovery, but revisions are unlikely to occur. Data can be manipulated to fit a narrative, a common practice in academia and potentially in government agencies as well.
In the words of G. Warren Nutter, skepticism is warranted when evaluating official data sources, regardless of their credibility. The views expressed in this article are the author’s opinions and do not necessarily reflect those of The Epoch Times.
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