How to Lie, Cheat, and Steal with Statistics

Numbers don’t lie, but people sure as hell can.

The reliability of numerical data means nothing if they are interpreted subjectively. All data sets are accompanied by context that can be manipulated, embellished, or entirely forgone to paint a picture that contradicts reality.

Statistics are often used to represent inequities in our society that necessitate civil and economic policy. Or maybe the policy came first, and justification came after…?

Economic data is the worst. There is far too much nuance to accurately gauge the financial health of an entire nation. There are too many people in diverse situations with different incomes from a variety of careers within numerous industries. It’s a whole fruit basket of apples-to-oranges comparisons that amount to horrible misrepresentations.

Yet, this is where our monetary policy comes from. Government bureaucrats and central bankers rely on data with built-in fallacies to pull the levers of finance, credit, and subsidies. Our individual financial health and decision-making are contingent on which levers are pulled and when.

Our opportunities for employment, our propensity to make a large purchase, or even our inclination to start a business may be affected by arbitrary policy.

It matters if they are lying. Especially when their solution to any perceived economic weakness is to devalue your currency or limit your access to credit. For some reason, central bankers believe that they can influence the collective decisions of a global economy by finagling the rate at which banks can counterfeit money.

Irrespective of their astounding hubris, these institutions use these capricious economic metrics to instill uncertainty and dependence in the populace. Even if the data is misleading, it can still be self-fulfilling. Market participants may reevaluate their risk tolerance and tighten their belts financially if the data indicates an impending recession.

Once the poor sentiment becomes reality, the central planners feel compelled to use their tools of economic manipulation to impede the free market and “help us.” Of course, the policy was already baked into the cake, but they needed the unfavorable data to justify it.

The Federal Reserve relies on three main economic figures:

· Unemployment rate.

· The rate of inflation (Consumer Price Index or CPI).

· Performance of all monetary value in the economy (Gross Domestic Product or GDP).

“Unemployed” only pertains to those who are collecting government income assistance checks. The rate is calculated by dividing this by the number of active jobs that have filed a W-9 form with the IRS. Therefore, this is a government statistic that measures the inflows and outflows of tax revenue and government spending. It does NOT measure the rate of gainful employment in the economy. It does not even address actual labor participation. The rate does not disclose multiple job holders, part-time work, or underemployed skilled workers.

The unemployment rate can be historically low despite a garbage labor market full of struggling gig workers driving Uber, record corporate layoffs, and thousands of baristas with PhDs.

Inflation used to be defined as the increase in the money supply or loosely defined as the intensification of counterfeit currency relative to a productive economy. Now it is simply treated as a measure of cherry-picked price increases. The CPI is horridly deceptive, as it measures the aggregate year-over-year difference in prices of a very questionable apportionment of goods. To the average person it makes zero sense, and it’s just downright disrespectful as a measure of the cost of living. The measurement is totally subjective, as certain necessities are omitted, and more desirable products are replaced with a “substitute” product.

The current CPI rate is 2.7%, which sounds great and might actually be true if you live in Section 8 housing and only eat pork and Lays chips. For those who insure their property and eat nutrient-dense whole foods like eggs, beef, and orange juice, your cost of living has likely doubled in the past 5 years.

Gross Domestic Product is the silliest of all economic figures because it includes government expenditures, inflated asset values, and consumer debt in its assessment of total value in the economy. None of those things have value, and some are detrimental to a healthy economy. GDP growth has been negative for years, but the government would rather degrade your currency to make up the difference than admit we are in a recession.

The biggest problem with disingenuous economic data is that we are lying to ourselves and pretending that everything is fine and dandy while we dig ourselves further into destitution. If we were honest about the state of our markets and financial health, we might actually enact policy to alleviate hardship and stimulate REAL growth. Instead, we allow them to kick the can down the road and jack up our economy with more monetary heroin to perpetually delay any honest reflection or fiscal responsibility.

This foolish game of fighting inflation with expensive debt and combatting poor employment conditions with cheap debt is just worsening every problem to make arbitrary statistics look better for the incumbent politicians.

We need to stop using their dishonest metrics as indicators of success and allowing them to rationalize the theft of our purchasing power. Our anecdotal evidence is far more reliable than some numbers made up by the Bureau of Labor Statistics.

You had better start keeping your receipts and tell your boss that the annual cost of living adjustment is pathetic. If he argues that CNBC says otherwise, tell him to stop basing our livelihoods off propaganda.