No Conspiracy Theory — Just Data

One of the things people do not understand is a basic truth about the BLS, BEA, Commerce Department, and other government data sources. I get constant emails warning me of the dark cabals manipulating the official releases.

While I have been critical over the years of the models and
methodologies employed, I do not believe this is any grand conspiracy.

Sure, the headlines are often misleadingly spun, but the data is all there for whoever wants to peruse it. Indeed, if you strap on your green visor, you can find all of the data releases for Inflation, Unemployment, GDP, New Home Sales, Durable Goods, etc. The non-seasonally adjusted non hedonics, no substitutions data is all right there. You need only bring a critical eye and a dollop of skepticism, and you can usually deduce the real meaning beneath the spin.   

In fact, the Truth is actually much worse than any conspiracy: Its as if the government is saying:

"Conspiracy theory? Ha! We don’t need to bother fabricating anything — we dump ALL of the data to the web each month, and that site gets less traffic than a dog’s blog in Kuala Lumpur.

We just think you couch potatoes are too lazy, too dumb, too easily distracted by other nonsense to really look at the actual data. Heavy lifting? Actual thinking? Working to figure out what is really going on? Don’t make us laugh!"

And you know what? They’d be right.

Even most conspiracy theories are just a lazy approach to the data . . .

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What's been said:

Discussions found on the web:
  1. david foster commented on Nov 29

    Yeah, the data is there, but actually figuring out how the various indices are constructed–and what they really mean–would probably take several days of effort per index.

    Business media could do everyone a big favor if instead of just reporting (say) the CPI and speculating as to its future direction they would publish “A User’s Guide to the CPI” which explains its assumptions and the implications of those assumptions.

  2. michael schumacher commented on Nov 29

    with all the advances in technology and our gov’t is still reporting figures as if they were gathered, parsed, and compiled by the three stooges. Remember the Fed discontinuing the M3 due to cost considerations…..however they had enough money to totally re-do the website and launch it on a fed release day no less!! and what about all those points they make on repo’s……..let’s also remember that the treasurey began auctioning off excess tax receipts in later 2002, which just happens to coincide with the bull market that most think we are still in. Nope no conspiracy here.

    There may not be a conspiracy theory that can be applied however when the collective urge of the gov’t (and all of it’s reporting entities)is to show the same thing (all is well) there really does’nt have to be any conspiracy……they all have the same goal.

    Just like the banks and brokers…….it’s not like they all got in a room and decided that up was good….they are all positioned for that and have the means and capital at there disposal to do it with. With the “hold and hope” philosophy that is being espoused at every talking point banks have little choice in what they CAN do. how else can you rationalize data that just has little or no basis in any of our realities.

    Merely saying there is no conspiracy is just a little too easy……


  3. peter from oz commented on Nov 29

    barry we pay couch potatos $350000 base plus bonus and we let them write flyers for our desk jockeys to talk to mushrooms (kept in the dark and fed on bs)that we politely call clients at cocktail parties
    these potatos are officially known as analysts
    and everybody seems happy because the s&p and dow and US Govt figures keep them happy
    why let facts get in the way of a good bedtime story
    rgds pcm

  4. Ironman commented on Nov 29

    My apologies for not knowing who to attribute the quote to, but it seems appropriate:

    “For any given event that may be explained by either incompetence or conspiracy, incompetence will always be the correct explanation.”

    In all honesty, where BLS data is concerned, it can take quite a bit of time before the bureau’s bean counters have enough data to be able to put a truly coherent picture together. I expect the latest GDP data to be revised downward substantially, but I also don’t expect it for some time.

    A good case in point is the higher inventory data that appeared in the latest release – I think that this may be somewhat of a correction for the BLS having previously undercounted inventory levels back in 2006Q4 (in other words, the economy wasn’t growing quite as slowly at that time as is currently believed).

    At some point, all the data will get sorted out, the numbers will be revised, and the whole thing will look a lot more realistic than it does today.

  5. moom commented on Nov 29

    This is so true. There is so much garbage financial conspiracy theory type stuff out there on the web. These kind of people don’t stop to think that if inflation was really 12% or whatever then GDP growth must be very negative. But it can’t be or there would rising mass unemployment. You don’t even need any data for this kind of basic reality check…

  6. peter from oz commented on Nov 29

    umm why were claims for unemployment relief up sharply

  7. ajhmstilt commented on Nov 29

    peter from oz,

    I’ve allways seen this quote attributed to Napoléon Bonaparte.

    “Never ascribe to malice, that which can be explained by incompetence.”

  8. Tom C., commented on Nov 29

    The traditional way of accounting for consumer prices was a fixed basket of basic goods. No hedonics or substitution theories. In ’95 or so the traditional fixed basket of goods was modified to take the above mentioned factors into ‘account’. One need not be a conspiracy theorist to recognize that cost of living increases on ‘entitlements’ needed to be controlled. Government has limited ability to control ‘entitlement’ spending in light of automatic cost of living increases without controlling CPI. The state has interests which sometime conflict with the interests of those who pay for government as well as those who take from government. The coercive power is located rightly in the state. The coercive power ALWAYS wins. When given too much power it is only a matter of time until that power is misused as the interests of the state come into conflict with the interests of the productive economy.

  9. Mort Glickman commented on Nov 29

    You moonbat conspiracy theorists probable believe Ron Paul too.

  10. Greg0658 commented on Nov 29

    me (well, maybe somebody beat me to it) –
    “Its Not My Job”

    childless and outta market(*) – really dont have ta care

    watch out WASPs & WASRCs

    (*)NOT – really can’t be, can I

  11. gek commented on Nov 29

    “The non-seasonally adjusted non hedonics, no substitutions data is all right there.”

    And where is that supposed to be. Where are these links?

  12. Larry commented on Nov 29

    Sort of like how “pro forma” results get emphasized, but the real numbers are still there?

  13. VJ commented on Nov 29

    What conspiracy ?

    Just as national employment was tanking, this administration implemented a never before utilized “model” that reported just the opposite.

  14. Eric commented on Nov 29

    Without getting into the issue, I´d just like to say that this aphoristic post gave me a wry laugh. Very nicely done!

  15. Jmay commented on Nov 29

    Using the word “conspiracy” carries with it all kinds of connotations, as if anyone who suggests that the government is skewing the presentation of the data has a tinfoil hat on.

    Managing the release of information for political purposes isn’t really a conspiracy anymore. It’s pretty much business as usual, no?

    But if you think that the presentation of the data is not intentionally, shall we say, re-packaged, do you therefore believe that the surprises in the data have been equally distributed to the upside and the downside?

    Also, do you believe that the average American/registered voter has the time, interest and inclination to research economic data beyond the sound bites they hear on the evening news?

    And most importantly, (to celebrate the release of the new Steve Martin bio) does the pope shit in the woods?

  16. wunsacon commented on Nov 30

    >> “For any given event that may be explained by either incompetence or conspiracy, incompetence will always be the correct explanation.”

    I strongly disagree with this statement. “Incompetence” is the perfect cover to establish “plausible deniability”. Certainly, sometimes, you can have both incompetence *and* conspiracy within the same organization. When is it more of one than the other? Depends on the situation.

  17. wunsacon commented on Nov 30

    You’re ALL conspiracy theorists. Some of you just believe in more conspiracies than others.

    A conspiracy is an agreement by two or more people to do something considered harmful (not necessarily illegal). Introducing hedonics and substitution was done by two or more people, a whole organization in fact. And it was done in order to reduce *real* entitlements to retirees and cripples who rely on social security. That’s harmful to those people. That’s a “conspiracy”.

    I wear the label conspiracy theorist proudly. Thank you. Some of you need to come out of the closet.

  18. wunsacon commented on Nov 30

    I’m getting a little frustrated by the “comment spam” filter. I’m giving up posting the rest of my rant…

  19. VoiceFromtheWilderness commented on Nov 30

    I have certainly always felt that an awful lot of the famous ‘conspiracies’ were pretty darn fanciful, require an awful lot of credulity to even remotely take seriously. I remember being told by a 19 yr old, that ‘the CIA’ was in on a super-secret conspiracy, that no one knew about, with the most powerful scientists, to spread AIDS throughout the 3rd world. So, I asked him, if it’s so secret, just exactly how is it that you know about it?

    On the other hand, this administration has been apparently giving lectures at GSA lunches about what ‘we can do for our candidates’ (The GSA?! — yeah there’s a real center of power), and it seems pretty likely that they have been twisting the arms of US attorneys to bring cases to trial against their political opponents just prior to elections. The ‘there is no manipulation’ claim rests on the following: Karl Rove might be willing to call decorated war hero’s cowards (and other things)(I’m refering to Max Cleland), he might be willing to see to it that people are arrested and brought to trial in order to win elections, but he would never mess with economic data.

    uh, yeah, sure, I believe that.

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