- "Stated simply, the true picture in the US is an
inflationary environment where Americans pay more and don't have jobs,
but bad accounting makes these costs disappear."
-
- SEATTLE --In a troubling
sign that accounting problems have grown beyond corporate balance sheets,
two of the main economic gauges used by Wall Street, banks, and in the
calculation of Social Security payments have been found to contain serious
math problems.
-
- The problems were identified in the Consumer Price Index(CPI)
and Producer Price Index(PPI) by examining contents of tables provided
by the US Bureau of Labor Statistics, and comparing weightings for the
most recent years.
-
- According to the tables, in the energy category, at least
two changes appeared to reduce energy cost weightings in the indices, including
one which reduces importance of "fuels and utilities" in the
overall CPI index by a whopping ten percent(1), and another which pushes
winter energy cost calculations into summer(2).
-
- In the education category, the weighting of college,
elementary tuition, and childcare was reduced between 2001 and 2002.
-
- In the housing category, the weighting of "hotels
and motels" was increased (against the backdrop of post-Sept 11th
falls in hotel costs), while at the same time, "housing at school"
got less weighting.
-
- Finally, in the most recent table which rates relative
cost importance, health insurance is placed below other cost categories
such as "recreational reading materials", "Pets", and
"Toys"(3).
-
- Taken together, these problems shed light on why consumers
and domestic businesses are under severe pressure, whereas multi-national
companies -- who operate largely overseas or outsource overseas -- are
reaping huge benefits, on top of the recent tax breaks. Stated simply,
the true picture in the US is an inflationary environment where Americans
pay more and don't have jobs, but bad accounting makes these costs disappear.
-
- These findings are significant because they represent
areas of ever-increasing costs which are not being reported, in contrast
to reports recently from the administration claiming a healthy economy
with low inflation. Retirees, for example, would have received smaller
Social Security checks due to CPI miscalculations, and banks may have made
loans without properly accounting for risk.
-
- No source of independent review for the BLS statistics
could be found.
-
- ============
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- Footnotes:
-
- (1) "Relative Importance" "Housing Fuels
and Utilities" et al, US Bureau of Labor Statistics table, www.bls.gov,
entry CPI 4.934(2001) vs. 4.469(2002) -- representing a reduction of ten
percent in the weighting, in the face of rising costs.
-
- (2) 2003 Inflation Data Hacked CHRISTMAS ENERGY COSTS
MOVED TO SUMMER!
-
- Seasonal weightings changed in producer price index in
2003 vs. 2002. It also looks like there is significant hacking starting
in 2001 (what politics have changed since 2000?)
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- Category WPS055 UTILITY NATURAL GAS
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- 2002 WPS 0555 106.4 104.1 101.4 98.9 100.0 98.0 97.9
94.6 94.6 96.4 102.4 104.5 2003 WPS 0555 105.7 103.5 100.9 98.5 100.1 98.7
97.0 96.8 96.7 97.3 101.9 102.5 -.7 -.6 -.5 +.7 -.9 +2.2 +2.1 -.5 -2.0
-
- Net change 2002 vs. 2003 (Cold months)Dec-Jan-Feb-Mar
-4.3 weighting (Warm months)Jun-Jul-Aug-Sept +4.1 weighting --> Christmas
in JULY
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- See graph where prices of natural gas are higher in general
recently, and more so during cold months!
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- (3) Based on statistics from the American Medical Association,
recent health insurance costs represent an amount approximately twenty
times greater than that represented in the published CPI.
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- http://www.libertywhistle.us/
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