A Wrest Coast Perspective

by Frank Darbe

When Governments Lie

The AP, via Yahoo, brought a lie to my attention this morning. No, they are not exposing the lies of some government official trying to cover his six in the face of some impropriety. They are not exposing another lie with the intent of taking America to war. No, this morning they are lying about bread and butter issues, literally. But lets look at the headline and the story and break it down:

quote:

Inflation pressures ease despite food price jump
Inflation pressures ease in April despite biggest jump in food prices in 18 years
WASHINGTON (AP) -- The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.

The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.

The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.

The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.

There is a lot of stuff going on in the first four paragraphs, and if all you do is read the headlines, the whole story seems to give you a warm fuzzy feeling. There was this increase in food prices, but that seems to be OK, because inflation wasn't nearly as bad. The reason that inflation was better was that energy prices were flat, gasoline dropped in price. There is, of course, one problem with this whole little attempt to make people feel better, and it appears lower in the story.

quote:

Core inflation, which excludes food and energy, showed prices well behaved in April, rising by just 0.1 percent, compared to a 0.2 percent gain in March.

The whole story has been telling us that even though April saw the "biggest jump in food prices in 18 years" its all OK because inflation is under control and even gasoline is being "well behaved." But energy costs and food are not part of inflation. You could play $1000.00 for a loaf of Wonder Bread and it wouldn't show in inflation. That $3.75 a gallon you are paying for gasoline could to to $37.50 and it would have no affect on inflation. Items that have an enormous impact on your wallet don't matter beans to the number crunchers when they create the inflation rate out of thin air. So an entire story whose point is to make us not feel so bad about the economy is based on a comparison of things that have exactly zero relationship. Because an artificially created figure for low inflation won't matter when the grocery clerk gives you the bill or the gas pump reads out the final amount.

Why they lie to us like this is another question entirely. My initial reading shows that the government's Core Inflation is tied to benefits like Social Security. Benefits rise and fall in line with the Core Inflation rate. Tying those benefits to a number that has no relationship to the real inflation faced by senior citizens allows the government to steal from the pockets of the elderly. We are faced with the fact that Presidents Carter, Reagan, Bush, Clinton, and Bush II set up and operated a system to rob the old and the poor of what the government owes them.

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For more info, check here:

John Williams: Shadow Government Statistics
THE REAL INFLATION RATE

This message has been edited. Last edited by: Darbe,

Interesting topic.

I have often used the rule of thumb that prices for most things double every 10 years. This translates to about a 7% per year increase. Last week I was playing with Microsoft excel and made a sheet to calculate how much prices of things rise over time.

One thing that doesn't rise at this rate is wages. The minimum wage rose at about 3.7% for the last 40 years.

Sometimes I question my understanding of math and finance is not my strong suite. But I trust my own numbers over the governments anytime even taking into account my math limitations.

This is because the government routinely lies, spins and decieves and I don't trust them.

quote:

Why they lie to us like this is another question entirely. My initial reading shows that the government's Core Inflation is tied to benefits like Social Security. Benefits rise and fall in line with the Core Inflation rate. Tying those benefits to a number that has no relationship to the real inflation faced by senior citizens allows the government to steal from the pockets of the elderly. We are faced with the fact that Presidents Carter, Reagan, Bush, Clinton, and Bush II set up and operated a system to rob the old and the poor of what the government owes them.

In the Orwell story Animal Farm, the horse that worked hard all his life was sold to the knackers so that the pigs (rulers) could have a party and get drunk.

I understand that Animal Farm was intended as a diatribe against socialism. But somehow we have accomplished the same result under capitalism.

I look at it this way. We the people created a contract with our elderly when soical security was set up in answer to the previous system that up to that time simply let old people die of hunger or exposure. By setting up a system to short change them we have entered a conspiracy to violate that contract.

I am opposed to a government that sytematicly lies to its citizens.

quote:

By setting up a system to short change them we have entered a conspiracy to violate that contract.

The taxation of Social Security benefits IS a violation of that contract.

It has been said that they were three kinds of lies.
1) The little white lie. (No dear you don't look fat.)

2) Damn lies. (Intentional lies.)

3) Statisical lies. (Confuse people with a lot of numbers.)

Now we have a fourth category of lies, Governmental lies. Darbe has provided an excellent example of the fourth variety to start this discussion.

I'm stepping into waters that I haven't tested. I heard last night from Bill Moyers that the gap between the wealthy and the poor has increased by a huge percent.

I think it has a lot to do with incentive retirement systems -- those non-taxable, compounded interest stock market investments.

Perhaps we are not losing the middle class because they are falling into poverty but because they are being split by those who have invested and those who have not.

We "normal" people gripe about big corporations and the oil companies. We "normal" people are now invested in big corporations and oil companies; and believe me, I hate it when I see in my monthly statements that my stock investments have taken a dip.

Incomes are rising slowly, costs are rising greatly, and those 401Ks make us all feel wealthy. What will happen when we start to have to use that 401 K money? We will be taxed heavily..........Somehow in this rambling I call to mind the law of unintended consequences.

I feel in my bones harder times are ahead for us globally.

Kathy

How many people get a golden parachute with their retirement.

When my wife worked in research at the UCSD medical center they had a great retirement program. If you work 30 years and donate the maximum they allow, the university would retire people with full pay and benefits. I know three people that retired that way and now have between 48,000 and 60,000 a year. (Some doctors make more once retired.) They are very much a minority. My mother and oldest sister both live on Social Security. My brother and I supplement their incomes so they don't starve, pay electric bills, and cover all of their unplanned expenses.

The system of 401K's seems more designed to make us feel good. If you retire with a 401K worth $150,000.00 how long will that last?

My real complaint is that the government came up with a method of figuring inflation that is inaccurate. Food and gasoline aren't in that equation because they are volatile and, prone to spikes,and over time will even out. The reality appears on this great chart.

quote:

U.S. All Grades All Formulations Retail Gasoline Prices (Cents per gallon)
2001-Jan 01/01 144.6 01/08 146.5 01/15 151.3 01/22 151.1 01/29 150.0
***SNIP***
2008-May 05/05 366.3 05/12 377.1

The chart shows that, though prices occasionally spiked downward, the trend has always been up and now has more than doubled. The cost of fuel affects food, which is up 18% in just one month. Why leave out the two greatest indicators of inflation.

The government used a fake number and then asks them which they will believe, the accountants or their lying wallets. I would like to blame this conspiracy of lies on one ideology or one political party, but both sides have been complicit in the conspiracy. Both sides have used this to keep the payments of Social Security down for those who most desperately need it. There are laws against elder abuse in every state. What do you do when you discover that our own government has conspired to abuse every elderly person in the United States since Jimmy Carter's administration?

When governments don't lie might make a much shorter list.

When an American citizen has dealings with the government, he is often required to give his statements under penalty of perjury. Some examples of this are testifying in court, filling out income tax forms, and various government documents that we are required to sign.

On the other hand there is no rule requiring politicians to tell the truth when speaking to the people. Wouldn't it be great if we could require politicians to speak to us under oath at regular intervals, for example every six months? The people would be allowed to pose the questions. If a politician answered "I don't remember" (The Alberto Gonzalez defense), he would be given time to check his records and consult with his people but the answer would still be required.

Just a crazy idea.