Shadow Government Statistics
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Shadow Government Statistics or Shadowstats is a blog run by John Williams in which he re-analyzes government economic/unemployment published statistics in order to restate them. This is because he states that these numbers have been manipulated over the past 25 years for nefarious political reasons. Noted Scottish loon Niall Ferguson cites them to back up his arguments, to much mocking by people who actually know something about economic statistics.[1]
You can join for $175 a year to read all about it. Despite claiming very high rates of inflation, he has not changed the price of what he's selling in many years.
The irony of the entire website is that Williams takes government reported statistics to make his apocalyptic predictions, after flatly stating on many occasions that government-reported numbers are "deceptive," "rigged," and "manipulated."[2] Take a second and let that sink in, too long might give a normal person a stroke.
Author bio[edit]
John Williams (aka Walter J. Williams) claims to be an economic consultant who possesses a BA in economics and an MBA from Dartmouth College. He claims to have worked for 25 years in many Fortune 500 companies completing economic forecasting models. That was until the US "changed" how it reported statistics, so he was tasked with fixing all of their models to correct the problem. He claims to have gone about telling the world about it on The New York Times front page (no articles written by him are found in the archive) and Investors Business Daily (no articles are found in the archive), along with meetings with governmental statistics agencies. He started Shadow Stats in 2004 to rave at the world in a more public venue, but still advertises for consulting roles on Shadow Stats.[3]
He is a chronic doom and gloomer who first garnered notice when he predicted the Dow Jones Industrial Average was going to close at 1,500 by the end of 1989 in an article by USA Today.
The Dow ended that year at 2,753.
What he does[edit]
Williams posts older statistics that have fallen out of favor by governmental agencies stating that they are being suppressed by the government to make the economy look better. This ignores the fact that these measures are still calculated and published alongside the newer methods of looking at the data.[4] The various agencies also publish all of their backup data as well, which for some reason contains all the things he claims they are trying to suppress (where he claims to data mine)… between his claims that it is rigged and manipulated.
Again, don't ponder the last statement very long.
Williams loves to take the number of unemployed and add the people who have stopped looking for new jobs, those employed part-time and want full-time, and those who looked for a job at least once in the last year but are not working now. What he doesn't realize is that these are very subjective numbers dependent on questioning people... which is why they were dropped from many reports. When uncertainty increases, oftentimes a non-working spouse or college student that didn't want a job before will start looking for work, and would count. People who wish to have a job they might not be qualified for but are working part-time would be counted. It would also include those who quit the workforce to raise children, then come back.[2]
Williams also believes that taking into account the improvement in quality of items in inflation calculations in comparison to older items is a trick. This is when some one realized it would be hard to compare the price of a 19" black and white TV and a 32" LCD TV along with inflation. Williams claims that this "trick" was done to reduce Social Security cost of living increases and reduce government outlays, by bribing the BLS.
Williams also believes that limiting categories for inflation calculations is wrong, meat is meat, as he believes only inflation raises prices of items and hits everything equally at all times. This of course is a basic economic tenet called substitution, and ignores examples such as when energy prices increase for more energy-intensive items (producing beef) would increase faster than less energy-intensive items (producing chicken). Williams' logic also ignores price changes due to supply and demand from changing consumption, disruptions in supply chains, and legal issues.
Williams believes that any GDP number is wrong because it takes into account too high of an inflation and economic growth rate. He is certainly entitled to his opinion, but these are largely measured numbers.
In a personal phone call with economics blogger James Hamilton, Williams admitted that his calculations of inflation were simply… inflating the official statistics and not a rigorous recalculation of said statistics:
“”I’m not going back and recalculating the CPI. All I'm doing is going back to the government's estimates of what the effect would be and using that as an ad factor to the reported statistics.[5]
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See also[edit]
References[edit]
- ↑ http://www.bradford-delong.com/2015/05/2015-04-27-mo-hoisted-from-the-archives-from-four-years-ago-monday-smackdown-niall-ferguson-jumping-the-gun-on-the-great-i.html
- ↑ 2.0 2.1 Economist challenges government data, SF Gate
- ↑ Shadow Stats Main Page with Bio
- ↑ such as "U-4" and "U-6" he spends a lot of time on, which are still published by the BLS
- ↑ James Hamilton. Shadow Stats Responds. Econbrowser, Oct. 12 2008.