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I chanced to be speaking with a good friend of mine, Biff Harbinger, professor of political economics at the University of Southern North Dakota at Hoople, a place better known for its internationally acclaimed music department.
Biff has a new book out, Economics: The New Mysticism, which, he said, will finally end the blatant abuse of statistics for political ends.
"George Bush," he said, "was dangerously close to the truth when he called Reagans plans voodoo economics. I never gave ol George much credit when he was running the CIA, but that insight was a real winner. If hed polish it up a little, it might get him into the White House.
"And remember David Stockman? Nobody does. That sucker stood at the helm of the Reagan ship, telling anyone who would listen that it was sinking. And Reagan let him!"
"But hasnt the Reagan administration stabilized the U.S. economy?" I asked.
"Thats sort of like a store doubling its prices, then announcing a 40 percent discount. It looks like a deal, just as long as you dont look too close. Reagan took over a Carter economy that had been a little shaky, made it very shaky to make Carter look worse, then slipped and dropped the whole thing. From that low, yeah, he brought the economy up, but he put it there in the first place."
"But," I asked, "what about Reagans claims to have cut unemployment?"
"Same sort of thing," he said, "but this time his people were just perpetuating the abuse of statistics that has been going on for years. What do you think the current unemployment rate is?"
I muttered something about 6 percent and USA Today.
"Well, that numbers accurate enough. Now, if we track all out-of-work people in the nation, theres been a base-line level of a few percent, maybe 2 percent unemployed. Thats because of seasonal workers, college kids looking full-time for their first big break, you know, people we call between jobs.
"On top of that is a category called hard-core unemployed. This is people who are drawing welfare while pretending to look for work, Reagans mostly imaginary welfare queens, like that. Easily 3 percent of the potential workforce."
"But," I interrupted, "that means Reagan has pared unemployment back to the absolute minimum?"
"Absolutely not, but Im getting to that," he said. "Now, thanks to the economic slump I just mentioned, a lot of people were put out of work, many of them specialized in their fields. Remember when Reagan fired the air-traffic controllers? We had all these people with nowhere to go. After all, how much demand can there be for air-traffic controllers in the business world?
"The economy slumped, and a lot of people hit the streets, swelling the welfare rolls. Yet, after six months, the unemployment rate started dropping again."
Feeling my skin prickle at the thought of proto-human intelligence residing unheralded in the White House, I asked, "Reagan wizardry?"
"No," he said, "statistical nicety. Its pretty common to ignore an unshakeable baseline, as long as you call attention to what youre doing. Of course, this makes it easy for politicos to say, Oh, but I thought you knew, which makes the uninformed feel stupid.
"See, what happens is, if an able-bodied worker cant get a job after six months, they are assumed to be slacking. Never mind that the only jobs a skilled machinist can find are flipping burgers, taking a cut in pay from over $40,000 to less than $10,000; that person is still seen as out of work by choice after half a year, and thus becomes one of the hard-core unemployed category, and statistically drops out of sight."
I was appalled. Actually, I still am. "Biff, if what youre saying is true if everyone in the nation somehow lost their jobs"
"Then, after six months, unemployment would hit zero? Yep."
I gasped, "But thats ludicrous! Thats thats ."
"Mysticism," he finished. "Youve got it. Buy the book. $17.95.
"Lets move along. My next book will discuss the history of Wall Street. Want to discuss the stock exchange? Most of the leading economic indicators are a sham ."
I fled while what little cynicism I had remained unproven.
article © 2003, 1987, W. Gregory Zeuner, Albermarle ARG
Some graphical elements © 1998 SoftQuad Inc., used by permission. Design & content © 2003 by Hazard. Updated 01 Aug 2003.