Unpacking those govt numbers
March 8, 2006 7:04 PM   Subscribe

"Real unemployment right now -- figured the way that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression -- is running about 12%. Real CPI right now is running at about 8%. And the real GDP probably is in contraction." Bill Fleckenstein, writing at MSN Money, provides a summary of an interview with economist John Williams on government number crunching. The full interview, with Kate Welling can be found here (PDF link) . More from John Williams at Shadow Stats.
posted by Zinger (64 comments total)
 
I just read the summary. I've heard this information before (I think I heard it on NPR a few years ago). It's depressing to think that our government screws everybody (retirees, foreign governments, investors, unemployed, etc.). Just so they look good come November. I hope I'm not around when the facade finally comes crumbling down.
posted by Mijo Bijo at 7:30 PM on March 8, 2006


I for one am hoping the facade comes down as soon as possible, as decisively as possible, so at least we have some chance to fix things up.

I fear that what will happen instead will be that the government will continue to lie to us until it is too late to fix anything and we'll be, literally, doomed.
posted by lupus_yonderboy at 7:32 PM on March 8, 2006


Er, so those libertarians over at rockwell are right? We should all be stockpiling gold?
posted by Richard Daly at 7:45 PM on March 8, 2006


Richard Daly: no, in fact I would guess that gold is actually a bit overpriced right about now precisely because of those libertarians over at rockwell. Gold is just a commodity now; the gold standard is long gone and there's no "inherent" value in it any more than anything else.

While I don't know that this article really illustrates it so well, it's definitely important to know what we're talking about when we talk about unemployment, especially the way it doesn't include people who aren't "actively seeking" employment. This seems to rely on the idea that everyone who's not actively seeking a job is somehow choosing not to work; it totally discounts people who have become so discouraged in their job search that they don't look "actively" in an ongoing way.

Another important aspect of the current economic situation is that gains in GDP are disproportionately taking the form of corporate profits rather than wages, and thus they're going primarily to the very top of the income distribution. So even though GDP is growing, which is how we distinguish between recessions and recoveries, that doesn't mean that median-ish people are feeling any love.

After looking over shadowstas.com, which seems to be a big "we'll show you the stats those Washington FAT-cats DON'T want you to KNOW!" deal, I'm less optimistic about John Williams. But the point about unemployment is still good.
posted by rkent at 7:58 PM on March 8, 2006


Oh, here's another good "sky is falling" statistic for you: Insider stock sales higher than at any time since just before the tech-bubble burst.
posted by rkent at 8:02 PM on March 8, 2006


So then what should we be buying, rations?
posted by Richard Daly at 8:05 PM on March 8, 2006


Foreign currency.
posted by Mijo Bijo at 8:13 PM on March 8, 2006


rkent, gold is an excellent investment even now, for the simple reason that people like it. The love of gold runs deep and strong in humans, and thirty years of attempted counter-programming aren't going to overcome the weight of cultural tradition.

The reason people like using gold as money is because paper currencies SUCK, as we are, once again, learning. People have been forced to learn this over and over and over through the centuries. Commodity-based money isn't perfect... it certainly has warts. But it is very hard for politicians and banks to abuse it, which is why they hate it and talk it down.

Within ten years, with the way the Fed and the US government is treating the dollar, you will see gold go over 2000 dollars an ounce. Gold will at least hold its real value (ornamentation and electrical usage, even if you ignore the cultural money aspects.) The dollar is worth NOTHING. We have written checks we can't cash, and a dollar collapse is slowly but surely underway.

There are other investments that would be good. Real estate is very bad, it's horrendously overbought. Art, guns, fresh water, gems, platinum and silver... we are entering an era when commodities will rule for a time. Eventually, that will shift back to stocks... when everyone hates stocks and real estate, having been abused and battered for a decade of terrible (or negative) returns, that will be the time to start buying them again.

Fleckenstein is a great analyst... you can subscribe to his Daily Rap at Fleckenstein Capital. Unlike any other analyst I know, he tells you what positions he has in any stock he mentions, so he shows you where his MONEY is, not just his mouth. A class act, one sharp cookie, and well, well worth the subscription.
posted by Malor at 8:17 PM on March 8, 2006


Foreign currency is also going to have a problem, as the global economy has become extraordinarily interconnected.

My suggestion: buy land in a country that isn't heavily dependant on imported goods.
posted by I Love Tacos at 8:19 PM on March 8, 2006 [1 favorite]


No use in buying foreign currency. If the US economy tanks, so does everyone else's.

Global depression, WOOT!
posted by billysumday at 8:20 PM on March 8, 2006


Damn you, ILTs!
posted by billysumday at 8:20 PM on March 8, 2006


The only upside: if the dollar crashes, any debt you've accumulated will crash with it.

Sucks for the careful savers, but it's great for the families with a mortgage and six maxed out platinum cards.
posted by I Love Tacos at 8:21 PM on March 8, 2006


I suspect that many of Mr Williams claims need to be taken with a huge grain of salt themselves - after all, as I understand it, he's got a lot of self interest in selling his own set of numbers himself.

The overwhelming majority of indices are set internationally, by accountancy standards boards or the OECD. I am very confident that the unemployment rate figure is rubbish in one meaningful sense, but is comparable across countries and across time. As for CPI, what he said would be a load of horseshit in Australia, since these stats are compiled by our independent Bureau of Statistics and have no political meddling whatsoever. If the US started screwing round with their ratios, international finance groups would complain very very forcefully.

Richard, yeah, rations, an AK-47, water purifier, etc.
posted by wilful at 8:21 PM on March 8, 2006



The only upside: if the dollar crashes, any debt you've accumulated will crash with it.


Well, that or the country you owe will just say..."Hmmm, we'll take Taiwan and call it even."
posted by wah at 8:23 PM on March 8, 2006 [1 favorite]


wilful: I always take financial advice with large grains of salt, but it doesn't take a genius to see that the dollar is in huge fucking trouble, long-term.

I haven't the foggiest if the dollar will self-destruct in five years or fifty, but I'd wager my estate that it will happen before I die, so long as I live past 80.
posted by I Love Tacos at 8:26 PM on March 8, 2006


Malor:

gold is an excellent investment even now, for the simple reason that people like it. The love of gold runs deep and strong in humans

If you're arguing that an investment in gold amounts to an irrational fetish for shiny things, then I'm with you 100%.

But it is very hard for politicians and banks to abuse it,

... because they can't print more of it. While this is superficially attractive, I think the ability of the state to have a monetary policy is a good thing. Remember the Great Depression?

Within ten years, with the way the Fed and the US government is treating the dollar, you will see gold go over 2000 dollars an ounce.

To be fair, everything else (like euros, yen, foreign stocks) will also sharply increase against the USD if there's a devaluation.

Real estate is very bad, it's horrendously overbought.

In a few markets around the country, yes. Not that I'm urging property speculation in middle America, but the property bubble is really only bad in a few cities.

we are entering an era when commodities will rule for a time.

I'm not so sure... that just seems like SUCH a step backwards. I think anyone who can maintain short positions will get very, very rich in the next decade or so, and then it'll be back to business as usual, but with a much worse GINI coefficient. Argentina, here we come! Hopefully without so much rioting in the street.
posted by rkent at 8:29 PM on March 8, 2006


This is the part where someone is supposed to come into the thread and say, "Guys, you're over reacting. Sure things are crooked, but the economy isn't going to collapse us back into the dark ages within our lifetimes!"

Yup, someone's supposed to enter the thread any moment and say that.

Please?
posted by Richard Daly at 8:30 PM on March 8, 2006


I am very confident that the unemployment rate figure is rubbish in one meaningful sense, but is comparable across countries and across time.
If I recall correctly, we are the only country in the world that counts unemployment the way we do. The example that comes to mine is France, which is commonly belittled for it's high rate of unemployment. The problem with this comparison is that France includes anyone in the labor force that is not employed as unemployed. In the US, you have to be looking for work to be unemployed.
posted by sequential at 8:30 PM on March 8, 2006


The problem with this comparison is that France includes anyone in the labor force that is not employed as unemployed.

Really? Even stay-at-home moms, children under 18, and retirees? And it's still only 10%? Holy crap! No, France's unempmloyment is genuinely worse than that in the US (most years, anyway), though their stat might well be more encompassing.
posted by rkent at 8:40 PM on March 8, 2006


rkent, I don't know how they define the labor force or the unemployed, but I recall that those not looking for work, but would otherwise be considered unemployed in the US are considered unemployed in many EU countries. I did not intend to imply that France had a better rate of unemployment, but that France uses a more inclusive definition of who is unemployed than the US.

As an aside, in the US children between the age of 16 and 18 are considered part of the labor force.
posted by sequential at 8:48 PM on March 8, 2006


rkent, the Great Depression was brought about BECAUSE OF bad monetary policy. The Fed at the time had a loose-money policy, wherein they were printing too many paper dollars for the gold reserves they actually had. The 1930s crash happened because of the 1920s boom, and the 1920s boom happened because of the Fed's monetary policy.

Had we not been subject to the vagaries of a central bank manipulating the system, we most likely wouldn't have crashed.

What we're going to see is something like the 1970s, only a lot worse. A LOT worse. The Fed is 'talking' tight, but behind the scenes they are flooding the market with dollars. They make the interest rate 'higher', but flood the market with new money... it's running at over a 13% expansion rate right now. Easy Al and the Clinton administration dug us into a huge hole during the boomtime 1990s, inflating the stock market bubble. To avoid the fallout from that, they dropped interest rates so far that they set off debt and real estate bubbles. When these crash, as bubbles always do... they'll probably open the taps even wider and send us further into an inflationary death spiral. All their options are bad. They have been backed into a corner by a combination of their own fiscal stupidity and the absolutely insane deficit spending by the government. We have, in essence, eaten our seed corn, and the economy is going to collapse. The longer it takes, the more manipulations they attempt to stave off the inevitable, the worse it will be. if they'd let us crash in 2000, we'd be past the worst of it now... but instead, we're going to crash harder and deeper.

They're so afraid of a debt deflation that they're going to kill us via inflation instead.

You're very right about Argentina... that is EXACTLY where we are going. Argetina failed because they pegged their currency to the dollar, which was being so badly abused by the Fed. Their smaller economy couldn't take the abuse and collapsed. Ours will too. Argentina is exactly what will happen here.

And gold and silver will be very, very good things to have.
posted by Malor at 8:48 PM on March 8, 2006


the worst thing about all this, is that the numbers everywhere are so fudged that no one really knows what the hell is going on anywhere ... your government, your company, your financial advisor ... they're all playing these games

and they're all guessing as to what the right thing to do is based on information they have no idea about

it's post modern finance

and for those who would argue for the gold standard, one simple question ... how do people know that a government actually holds the gold it says it does in this day and age? ... trusting them? ... yeah, right
posted by pyramid termite at 8:48 PM on March 8, 2006


wilful: Richard, yeah, rations, an AK-47, water purifier, etc.

Not so fast.
posted by Chuckles at 8:50 PM on March 8, 2006


So instead of looking for a new job I really should be investing in some land out in the boonies with a trailer and some guns? Because I can handle that much better, anyway.
posted by dilettante at 8:57 PM on March 8, 2006


On the unemployment numbers front at least, Australia has a similar disconnect between the rosy Government view and the dismal reality.

In my experience, once the marketroids have seized control of the corporate brain away from the engineers and management starts behaving as if it believes its own bullshit, it's time to jump ship... harder to do with a whole country, though.
posted by flabdablet at 9:04 PM on March 8, 2006


pyramid, I wouldn't trust this administration to tell the truth, but gold is heavy and hard to fake. All they'd have to do is have regular audits... no big deal.

As far as I know, however, our gold has not been inventoried since the Eisenhower administration, so god only knows how much we actually have.

There was some evidence that we might have swapped our gold for Bundesbank gold and sold it off during the 1990s... there's a chance that the gold in Fort Knox _might_ be German. There were very, very strong signs of gold market manipulation during the 90s, and there were some funny wording changes in the government's books. Accountants don't change wording without a reason, and if I remember correctly, they reclassified the gold in Fort Knox from 'gold reserves' to 'deep storage gold'. I don't remember the details anymore, I read about it a number of years ago.... but it's just barely possible that the US owns no gold at all.

Some of this info came from really reputable places, and some from the lunatic fringe, so treat it as no more than a possibility. The market-manipulation stuff was circumstantial, but seemed very solid. The evidence tying it to the government was weaker. It could have been banks or big commercial traders. But Fed minutes definitely talked about the US doing gold swaps, and that they were ready to do more of them, so it's not complete tinfoil-hattery. (this was likely a blackout error... they redact their transcripts pretty heavily before releasing them to the public, and this mention of "gold swaps" was probably missed during the redaction process.)

I'm just mentioning it because you were wondering if the government could be trusted. I suspect even the Clinton administration was grossly dishonest.... god only knows what the Bushies are up to. It's always possible they may not be smart enough to continue the Clinton-era programs.... Clinton's government was brilliant. The Bushies.... not so much.
posted by Malor at 9:11 PM on March 8, 2006




Oh, one more thing: my tagline on Slashdot, for a long time, was:

US Dollar, n: A politician's promise to pay nothing on demand.

Unlike most, that's a promise you can be absolutely sure they'll keep.
posted by Malor at 9:21 PM on March 8, 2006


Here's the .pdf of those numbers by country, to June 04. USA 5.6%, France 9.4%, that's using the same ILO Guidelines.
posted by wilful at 9:23 PM on March 8, 2006


My two cents: Do what the big players do and HEDGE...

rations and palm beach realestate
posted by slickvaguely at 9:30 PM on March 8, 2006


Wilful, if you read the fine print you'll see that "without work" means "have worked for less than one hour in the reference week".

This definition, in countries where full-time work is disappearing in favour of part-time or casual employment, allows governments to claim low unemployment numbers (and make policy on the basis of those numbers) even when vast numbers of people are looking for more work than they have. In effect, they can (and do) respond to the underemployed by singing "laa laa laa, we're not listening".
posted by flabdablet at 9:31 PM on March 8, 2006


dilettante - naw, I'd suggest learning a useful skill. Barter, no matter how bad the "official" currency is, can put food on your table.

I'm dirt poor so I don't know the in's and out's - but look to what the super- and ultra-rich are doing with their money to ensure that they stay super- and ultra-rich if/when the economy/currency collapses (part of it, I'd imagine, is to prevent said collapse).

As a scientist, I'm fucked if the economy/currency collapses. Hell, I'm fucked even if things stay status quo.

/if there's a cataclysmic infrastructure collapse, remember me; I can make antibiotics from dirt
posted by PurplePorpoise at 9:32 PM on March 8, 2006


Thanks for the links, wilful. What's the difference between the monthly survey in the US and the ILO numbers, if any? My understanding of OECD standardised unemployment rate is that they are useful for comparison, but may differ from how individual countries measure their unemployment.
posted by sequential at 9:40 PM on March 8, 2006


flabdalet, if you read the large print you'll see that the numbers are calculated the same way for all countries. Which is my point, and which rubbishes Mr Williams hypothesis.

Besides, I actually do think we're at a low level of unemployment at the moment - it's about the only ameliorative for Howard's IR changes. There are a truckload of job ads in the papers going unfilled. They're importing 100 bakers from Vietnam (and paying them award wages), fruit is rotting on trees and vines because of a lack of pickers, the rates for tradesmen is through the roof due to too much work. Sure there have been seriosu issues with people moving onto the disabled pension, but workforce participation rates have been on an increase since the 60s.

unless you think the nasty ABS are getting political on behalf of government?
posted by wilful at 9:52 PM on March 8, 2006


While I share the general concern for the ongoing health of the global economy, there's no evidence to suggest that we'll all be rooned. Sure, America and Australia have got to give up on their excessive consumption (that means you, middle class), but the correction that will have to come will merely restore balance to the world, where consumers of things will have to pony up real goods, not just debt, in order to afford what they want. Of course, America will probably find an excuse to shitcan even more of their social programs and increase the misery for their most disadvantaged citizens. Australia thankfully has no public debt (and no public assets) so will ahve some capacity to get all keynsian, if it dares.

I predict that unemployment will balloon, but only to about 15 - 20%, and GDP reduction will take us back about 10 years, then we'll pick ourselves up and move forwards once more, hopefully having learnt something. Not many people in the first world will starve to death, the number of third worlders already starving to death is about 40 000 a day and we don't care about that number so they obviously don't really matter.

My main concern will be with the environment - oil consumption will drop, which will be good, but the pressure for alternatives will also disappear. Cheap coal will be pumped into the atmosphere. China may take the opportunity for the break in grwoth to try and fix it's massive enviro problems, but I don't think so.

My solution is to avoid excessively inflatable assets, ie cash, embrace voluntary simplicity such as growing your own vegeis and chooks. Cheap transport will be good, like a bicycle, or public transport or a scooter. But then, why would oil supplies be disrupted or more expensive? The main problem will be keeping a job, having a job that is entirely recession-proof is hard to come by, the police forces would be a good bet.
posted by wilful at 10:24 PM on March 8, 2006


"...but flood the market with new money... it's running at over a 13% expansion rate right now..."

And lots of folks were unsettled by the Fed's decision late last year to stop reporting M3 data, without good reason.

For some reason they don't want you to know how much money yoy they really will be printing going forward. I've had the theory for a few years now that, like the 80's, they'd just inflate their way out of the current deficit.

Foreign governments holding billions and trillions of nominal US dollar obligations will find out inflation can erode real value.
posted by Mutant at 1:00 AM on March 9, 2006


wilful, Williams says, "If you were unemployed and you’d given up looking because there was no work to be had, you were counted as a discouraged worker—but taken out of the unemployment count." whereas the ILO conditions state "the unemployed are persons of working age who, in the reference period, are without work, are available for work and have taken specific steps to find work.". It's not clear that ILO counts these 'discouraged workers'.
posted by Gyan at 2:45 AM on March 9, 2006


But it is quite clear that the government isn't manipulating the unemployment data!
posted by wilful at 3:30 AM on March 9, 2006


wilful : "But it is quite clear that the government isn't manipulating the unemployment data!"

Williams isn't claiming that. I see him as saying that a 'common sense' barometer of unemployment would include these 'discouraged workers' but due to political and morale concerns, the government doesn't report them as unemployed. The opposition doesn't also call out this tactic because both parties have been & are guilty of the same thing, so it perpetuates.
posted by Gyan at 3:37 AM on March 9, 2006




Sorry, unemployment isn't fun, but I don't buy this argument (even though, apparently, it's for sale on the Web site? Hmmm...Are the advertising on Air America?).

What about all the social programs that didn't exist during the Depression? What about the minimum wage, which suggests that some of the people who were working during the Great Depression were being paid less than the modern minimum wage? What about income that isn't reported these days, which is many times greater than in was during the GD? What about the "discouraged workers" who are really dependents on people earning enough that they will only take emotionally satisfying employment?
posted by ParisParamus at 4:22 AM on March 9, 2006


I just love the idea that it's not OK to take citizens' income by force to feed poor people here*, but it is OK to take citizens' income by force to bomb poor people on the other side of the world.

I'll take your whining about welfare leeches seriously when you start whining about the deoffense industry leeches.

(*it is bad economic policy, imo.)
posted by sonofsamiam at 5:03 AM on March 9, 2006


The 1930s crash happened because of the 1920s boom, and the 1920s boom happened because of the Fed's monetary policy.

Well this causation chain is probably a little more complex then this ?

I don't have numbers to support Fed's expansion of monetary base (a.k.a. printing more money, giving more credit) in violation of the gold standard in force in the US since 1900, but I would hardly be surprised to see the Feds were pushed by interests to do so....after all, who was going to control the quantity of gold ?

The add the behavior of banks who allegedly pushed invenstors and consumer to pump more money into market, even lending them money to invest more ! Banks don't lend without some for of guarantee and I doubt they accepted always the purchased stock as guarantee. These who did tanked ..the ones who didn't probably took whatever guarantee was offered.

I wouldn't be surprised to see that bank encouraged the irrational investing behavior at full speed and force, because we still can see today unscrupolous financial "expert" pushing people to sustain more risky investments or offering them investment that don't cover inflationary devaluation of money AT ALL.

Plus the Smoot-Hawley Tariff Act introduced protectionism in a fashion that could but solicitate retaliation, instead of offering less evident helps to "suffering" industries. So what would have I done with my stock in XYZ company, knowing that its production and sales abroad were likely to be affected by retaliation ?

SELL ! This is rational, but also based on the pure _fear_ that retaliation was more likely to happen and nobody wants to pay the full price, better abandon ship.
posted by elpapacito at 5:09 AM on March 9, 2006


Wow. Depressing. They don't call it the "dismal science" for nothing, I guess. What kind of drugs does Williams take to help him get out of bed in the morning?
posted by Tommy Gnosis at 5:11 AM on March 9, 2006


Are we getting trickled down on yet?

We all know if things are bad it's all Clinton's fault!

All hail the King!
posted by nofundy at 5:11 AM on March 9, 2006


To what fiefdom do you belong comrade?
posted by nofundy at 5:12 AM on March 9, 2006


I suspect that many of Mr Williams claims need to be taken with a huge grain of salt themselves

Yes. You essentially have three "consultants" shilling for each other.

All data, economic or otherwise, has its shortcomings. The problems associated with various economic indicators are well known and taken into account by markets and such. There is no conspiracy.

Rather than building a concrete bunker in your backyard and stocking up on water and canned goods, how about some good reading?

Start with the Monthly Labor Review (MLR) from the Bureau of Labor Statistics (BLS) -- available for free on the internet. In fact here's an excellent article to start with from the current issue. Hmmm...I wonder if this prompted Mr. Williams' article.

Sign up for a free trial of the Dismal Economist too. It's always good.

And this paragraph from Mr. Fleckenstein's article has to be one of the most incoherent things I've ever read.

Williams starts by discussing the headline economic data: "Real unemployment right now -- figured the way that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression -- is running about 12%. Real CPI right now is running at about 8%. And the real GDP probably is in contraction." (By "real," he means calculating the data the way they used to be calculated, not as inflation-adjusted.)


Anyway, thanks for the interesting post.
posted by bim at 5:20 AM on March 9, 2006


One thing that utterly confounds me about economics is that, in times of woe or fiscal uncertainty, there is always a rush of demand for gold. Why?? Gold has limited, if any practical utility (outside of dentistry), but is something we all agree is pretty to look at. Despite our fancy economic models and complex theories this tells me that civilization is, to its core, pretty fucking stupid.
posted by Tommy Gnosis at 5:20 AM on March 9, 2006


In a few markets around the country, yes. Not that I'm urging property speculation in middle America, but the property bubble is really only bad in a few cities.

Except it takes dozens of Topeka, KS sized cities to make up for one Chicago, and dozens upon dozens to make up for the Bay Area.

That's the rub. Yes, the bubble is most pronounced in the big cities (though, given the number of turtle tossers working in St. Louis, Topeka, KS isn't that far from "big") But much of the population lives in the big cities.

When the bubble breaks, it may not affect that many square miles -- but it will affect a very large portion of the population. As that population's spending ability dissappears, that will drag down the economy for everybody.

Between that, and transportation costs rising, those people with reasonably priced houses in Topeka may find that they can't afford anything else -- because anything not made right there just costs too damn much.
posted by eriko at 5:29 AM on March 9, 2006


here is always a rush of demand for gold. Why??
The reason is these rush people react sometimes by pure emotional impulse...it's like selling stocks of Hilton Hotels because Paris managed to yet again make herself noticeable and scandalous.
posted by elpapacito at 5:50 AM on March 9, 2006


Bill Fleckenstein is a professional short seller with a well-deserved reputation for talking his own book and John Williams is a huckster who sells snake oil mixed with small doses of interesting truthful facts. Someone higher up suggested taking them with a dose of salt...good idea You may now return to this otherwise entertaining thread.
posted by cyclopz at 5:53 AM on March 9, 2006


If everything really does collapse, cigarettes, lard, and guns will be the new currency. Think post-WWII Germany.
posted by craniac at 5:54 AM on March 9, 2006


Predicting the future, economic or otherwise: its like identifying who picked the right Lotto numbers--after they've won...
posted by ParisParamus at 6:03 AM on March 9, 2006


Thank you wilful and bim for saying it first!

It amazes me that people can believe in both the power of corporations AND that somehow the economic numbers are being manipulated by the government -- if this was the case, then corporations and bankers would be doing things with their money that would make no sense to those of us not on the inside. But that isn't generally true, of course, as corporations are not pouring money into gold, or stockpiling weapons, or whatever. It doesn't matter how economic numbers are measured (and, as wilful points out, the numbers are measured sensibly), as long as they are measured consistently, so that everyone has access to the same data. The economic situation often looks gloomy, but global collapse? I don't think so.
posted by blahblahblah at 6:03 AM on March 9, 2006


wilful, my point is that even if you use the same criteria for defining unemployment across multiple countries, the numbers you get are not necessarily comparable.

The "one hour of work per week means you're employed" rule makes the official unemployment rate look much lower in countries that tend toward underemployment via casualization vs. countries that maintain a culture of predominantly full time employment. In order to demonstrate that the French figure is meaningful compared to the Australian figure, you'd need to establish that casualization is happening at much the same rate in France as it is in Australia.

A quick look here suggests that this is not, in fact, the case.

It seems to me that defining "employment" as "1 or more hours per week of paid work" was a mistake, and that the ILO would have been better off defining "employment" as "enough paid work to provide for the basic needs of food and shelter for the employee and his/her dependents".

It also seems to me that it's this later sense of "employment" that governments of all stripes assume when the discussion is about employment vs. welfare; meanwhile, economic policy is made and political points are scored on the basis of the clearly stupid 1-hour-per-week definition. This strikes me as delusional.

On preview: blahblahblah, I don't believe that the unemployment numbers are being manipulated in the sense of data being distorted. The interpretation of the numbers, though, is being spun into fairy floss.
posted by flabdablet at 6:09 AM on March 9, 2006


We hit the trifecta (of consultants)! LOL

And I seem to recall the phrase "rational expectations" from economics classes long ago. here's the best part of the link:

The concept of rational expectations asserts that outcomes do not differ systematically (i.e., regularly or predictably) from what people expected them to be. The concept is motivated by the same thinking that led Abraham Lincoln to assert, "You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time." From the viewpoint of the rational expectations doctrine, Lincoln's statement gets things right. It does not deny that people often make forecasting errors, but it does suggest that errors will not persistently occur on one side or the other.

...have a good day everyone.
posted by bim at 6:14 AM on March 9, 2006


craniac - guns and ammo, gasoline, fresh water
posted by sfts2 at 6:28 AM on March 9, 2006


As for the wisdom or otherwise of investing in gold: as it's a commodity, the value of gold depends mainly on how much of it is available at any given moment.

Given that gold is likely to remain in fairly limited supply as commodities go, the value of a well-spread basket of consumer goods should stay roughly constant (with cyclic variations) if expressed in ounces of gold. The same cannot be said of its dollar value.

Therefore, it's not the least bit stupid to hold a certain amount of gold as a hedge against inflation.

It's worth noting that describing gold as a stupid and outmoded investment has long been a popular pastime. I remember lots of people saying that five years ago, when gold was trading well below $300/ounce (it's now trading above $550).
posted by flabdablet at 6:31 AM on March 9, 2006


bim: you don't need to fool all of the people all of the time; fooling most of them most of the time is quite sufficient.
posted by flabdablet at 6:33 AM on March 9, 2006


It's worth noting that describing gold as a stupid and outmoded investment has long been a popular pastime. I remember lots of people saying that five years ago, when gold was trading well below $300/ounce (it's now trading above $550).

The price of a commodity fluctuates wildly? Well that makes it a good investment then.
posted by rkent at 7:01 AM on March 9, 2006


I'm investing in bandwidth.
posted by wah at 7:20 AM on March 9, 2006


Gold certainly doesn't look that stable...
...oops
posted by blahblahblah at 8:42 AM on March 9, 2006


What we're going to see is something like the 1970s, only a lot worse. A LOT worse.

I will stock up on trucker caps and prepare to drive really crappy cars, then.
posted by davejay at 10:32 AM on March 9, 2006


For me, I quit a job two weeks ago after saving up three months pay to allow for job hunting. Two weeks later I'm being inundated with offers from recruiters and have had two interviews in the past week and more in the next week, provided I don't receive an offer this week.
As far as unemployment benefits and collecting them, the system is rigged, rigged, rigged. Most states here are 'at will work states' where you have no rights to unemployment unless you're laid off. Quit for cause? No unemployment. Fired without cause? No unemployment? You can prove beyond a shadow of a doubt that an employer terminated you without cause with documentation, testimony from co-workers, managers, any possible evidence that would be admissible in a normal court of law, too bad for you, you're not getting unemployment (most unemployment courts decide on the basis of the employer on the basis of, if things were so bad, why didn't you just quit? You wanted to ride it out? Too bad for you, no unemployment. I speak from experience far too many times here. . .)
posted by mk1gti at 11:25 AM on March 9, 2006


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