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Wednesday, January 28, 2015
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Largest U.S. Jobs-Lies Yet

Articles & Blogs - US Commentary

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The U.S. Bureau of Labor Statistics deserves credit for being audacious, if nothing else. On the same day that it admitted that its “birth/death model” had understated U.S. job losses by more than 100,000 jobs per month throughout 2009, it started off 2010 with its largest one-month jobs-lie yet – since it severed all connection with reality in its “statistics”.

Let's take these bombshells one at a time. Once a year, the Bureau of Labor Statistics does a revision of its jobs numbers, by comparing actual jobs totals from tax receipts against their own “estimates”, which include the “birth/death” adjustment. For those unfamiliar with this statistical manipulation, the BLS's “birth/death model” is a completely discredited tool which supposedly counts all the jobs which are “invisible” to the U.S. government's massive army of statisticians. No other government engages in these flawed adjustments.

Conveniently, what this supposedly unbiased “model” always does is to understate job creation when the economy is strong, and understate job losses when the economy is weak. Put more bluntly, this is a statistical contrivance where the U.S. government 'borrows' jobs from the good months to add to the bad months. Of course, with the debt-crippled U.S. economy no longer having any “good months”, it's only function now is to add phantom “jobs”.

During 2009 alone, the BLS has just admitted that the “birth/death model” incorrectly added more than 1.39 million jobs last year. Put another way, these supposed “margins of error” were much larger than the birth/death adjustments, themselves. Statistically, any model which produces margins of error which are larger than the results of the model is obviously hopelessly flawed. A valid economic model should have margins of error which are generally no larger than 5- 10% of the results. Thus, the refusal of the BLS to abandon this statistical fraud is just as outrageous as the birth/death lies, themselves – especially when there is a distinct and obvious pattern to these lies.

Did I mention the second, large annual adjustment which the BLS makes with its birth/death model every year? Every January, the BLS also makes a subtraction of hundreds of thousands of additional jobs. This “adjustment” is for the bias in the model which the BLS admits to, in advance each year – with a second revision then done after the fact.

This January, the BLS subtracted 427,000 jobs via the birth/death model – a fact that it is desperately hoping that no one noticed. The reason why it is so important that no one notice this revision, is because the BLS's January jobs report is its largest one-month lie yet. Given that the final figure released by the BLS was a net job-loss of only 20,000 jobs, without the birth/death adjustment, we are supposed to believe that the crippled U.S. economy created over 400,000 net jobs in January.

We are supposed to believe the U.S. consumer economy added 400,000 jobs in January after the second, disastrous holiday shopping-season in a row. We are supposed to believe that the U.S. economy added 400,000 jobs in January, just days after Barack Obama appeared on national television to apologize for not doing enough to create new jobs and promising additional “stimulus” aimed at job-creation.

Is it even slightly rational that a U.S. government which created 400,000 net jobs in January would be apologizing for doing a poor job – rather than bragging about its huge success? Is it even slightly rational that a U.S. government which just raised the national debt limit to over $14 trillion, and admits the country is in dire financial condition would be planning to throw more money at job-creation – with an economy which supposedly added 400,000 net jobs in one month?

For American readers, look around you. Did you see an explosion of hiring last month where you live?

Once readers have managed to come to grips with the absurdity of the BLS's latest jobs report, it's time to look ahead to an even more interesting issue: what's next? With the U.S. propaganda-machine attempting to hide the fact that the U.S. economy supposedly produced over 400,000 jobs last month, this sets the stage for one of two scenarios.

If the BLS attempts to continue the lie that the U.S. economy is now adding 400,000 jobs per month, then markets have already been set up for a “surprise” next month of epic proportions. None of the propagandists, nor the media talking-heads who parrot them will be “predicting” anything close to a job-gain of 400,000 jobs for February (who wants to get locked-up in an asylum?). With the tone of the propaganda-machine being decidedly more bearish in recent days, this could be yet another example of Wall Street insiders being able to position themselves in advance for a “surprise” which has already been pre-ordered for next month.

The second scenario is that the BLS is trying to hide this 400,000 “job gain” for an entirely different reason. Because the BLS must make this negative “revision” to its birth/death fraud every January, if it had produced a number consistent with its most-recent fraudulent reports, it would have reported a figure very likely close to 20,000 - before the birth/death adjustment was made. Had it done so, then the “headline number” it released to the media for January would have been a net job-loss of 450,000 jobs (once the birth/death adjustment of -427,000 jobs was included).

What would or could the U.S. propaganda-machine do with that number? Does it acknowledge its second birth/death fabrication – just minutes after announcing that fraudulent model invented 1.4 million jobs last year? Likely not.

This would have left the U.S government having to deal with a negative “surprise”: that the U.S. economy lost over 400,000 jobs in January. Forget about the fact that in the real world, the U.S. economy has still been losing 500,000 to 1 million jobs each month. The propaganda which has been fed to Americans in recent months is that “job losses” have essentially come to an end.

This would have also been a very inconvenient “truth” for the dollar-bulls to deal with – after having convinced market sheep that the U.S. economy was so much “stronger” than that of various European nations. Forget about the reality that the U.S. economy is in far worse shape than even the economy of Greece (see “Fiscal Follies: Greece versus the U.S.”).

In this second scenario, the fraud being attempted by the BLS for February would be far less ambitious than pretending the U.S. economy was now adding 400,000 jobs per month. The bottom-line number for February would be in between -100,000 and +100,000 jobs – still totally fraudulent, but no larger than previous fabrications.

There is one, final scenario – which has a far lower probability than the first two scenarios, since it would mean a total reversal of the recent message being broadcast by the propaganda-machine. Even in Wall Street's rigged casino (otherwise known as U.S. equity markets), these fantasy-valuations can't simply go up and up and up – especially with no real “earnings” to fuel them. Thus, in order for Wall Street to continue to manufacture its “trading profits”, at some point it will need to whip-saw the sheep with a surprise “correction”, if not an outright collapse.

As with 2008, Wall Street insiders would be warned in advance of the change in the “message”, so that they could load-up on their short positions before the “surprise” bad news was released to the market. Unlike the massive effort required to continue to keep U.S. markets propped up, bringing U.S. markets down requires no more than briefly flirting with the truth.

Want to see the Dow back down to 8,000, in a hurry? How about admitting to the American people that the U.S. economy is still losing a million jobs per month? With the second crash of the U.S. housing market about to begin, telling a little truth about U.S. housing would also ensure a market crash.

Clearly, at some point this whip-saw event will need to occur so that Wall Street is able to switch all of its money out of unsustainable long positions. However, since I originally predicted last May that Wall Street (and its government and media pawns) would not be able to keep the U.S. fantasy-rally going much past that point in time, I will no longer continue to underestimate the stupidity of market sheep (i.e. the “experts”).

If the next U.S. housing crash starts, but the government simply responds with larger statistical fabrications, then maybe the sheep will continue to believe it – despite one out of every eight U.S. mortgage-holders already being somewhere in the foreclosure process. With Americans having already being numbed to tent-cities, multitudes of foreclosed/abandoned properties, entire shopping malls going bankrupt, line-ups for every form of charity growing exponentially and various other indicators of an economic depression; like lobsters in the pot, they may simply fail to notice themselves being 'boiled-alive' by their own government.

While the next fabrication of the U.S. government cannot be predicted (nor its magnitude), at the least we can monitor these continued fabrications – in order to attempt to glean patterns in the endless deceit. Hopefully, when the next fraudulent jobs-report is released, readers will be able to understand both that lie, and the intentions behind it.

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