Wednesday, September 06, 2006

DON'T BELIEVE THE HYPE

According to the AP Economics Writer, "productivity of American workers slowed in the spring while wage pressures increased."

Bullshit. Pure, unadulterated bullshit. Let's look closer at the language in the article itself, to see how the government & the media try to hoodwink us day-after-day:
The Labor Department said that productivity, the amount of output per hour of work, increased at an annual rate of 1.6 percent in the April-June quarter.
So, just one paragraph after telling us that productivity "slowed," we discover that it didn't "slow," but actually increased. Then, moving along, the article tells us that:
Wages registered a second sizable increase, rising at an annual rate of 4.9 percent in the second quarter, up from an initial estimate of a 4.2 percent increase — good news for workers, but the kind of development that leads the Federal Reserve Board and economists to worry about inflation.
This is not good news for workers. That "rise" in wages is purely a reflection of inflation, of a devalued dollar: the result of an increase in the supply of money & credit. Money & credit from the Federal Reserve & other central banks, as well as liberal lending policies of major banks, domestically & abroad. Plus, the notion that the Fed is "worried about inflation" is farcical, as it has as much of a role as any entity in the creation of the inflationary environment. Later on in the piece, the writer says:
While rising wages and benefits help workers, economists see the combination of slowing productivity and rising wage costs as a recipe for unwanted inflationary pressures.
Again, the concerns are correct, but the implied cause & effect are all wrong. "Inflationary pressures" will undercut any wage gains for workers, that much is true. But the idea that the Fed is worried about this is outrageous; the Fed helped engineer it. Then, halfway through the article, we come to the real issue, the real concern of the "economists" & the Fed:

The sharp jump in labor costs raised worries on Wall Street that the Federal Reserve may not be finished boosting interest rates to fight inflation. The Dow Jones industrial average was down by more than 30 points in mid-morning trading. Nariman Behravesh, chief economist at Global Insight, said that rising wage costs at a time of slowing productivity would put policymakers at the Federal Reserve "in a very tough spot." But other economists saw an upside to the jump in wages, saying it would help consumers keep spending in the face of rising energy costs, higher interest rates and a cooling housing market. "If households are bringing home larger paychecks, then consumer spending can hold up in the face of ugly headwinds," said Stephen Stanley, chief economist at RBS Greenwich Capital.

Wall Street worries that the rate hikes may not be finished. In other words, Wall Street wants more inflation, wants more money & credit . . . so it can come to them. And other "economists" see good in this inflation, because it means consumers will "keep spending." The never ending mantra: spend, spend, spend. Spend what you have! Spend what you don't have! Go into debt!

Comsumers see "ugly headwinds," in the form of economic troubles, and they decide to save, to budget, to keep tabs. But the Fed and the "economists" . . . and the media, do everything in their power to get those consumers to act against their own interests.

And, to reiterate the same old line one more time, near the end of the article, the writer says:
Strong growth in output allows businesses to pay their workers more without having to raise the cost of their products, which fuels inflation.
And, if you will, let me reiterate my line one more time: Bullshit. Wages go up because of inflation, not the other way around.

8 Comments:

Blogger DED said...

The Labor Department said that productivity, the amount of output per hour of work, increased at an annual rate of 1.6 percent in the April-June quarter.

So, just one paragraph after telling us that productivity "slowed," we discover that it didn't "slow," but actually increased.


It's rate of growth slowed from an annual rate of 3.2% (or whatever it was) down to 1.6%. That's what they're talking about here. Yes, expansion continues, just not at the pace it was.

1:05 PM  
Blogger DED said...

Ack! Let me try again...

If the rate of growth had gone negative, then we'd be in recession.

1:08 PM  
Anonymous Mike said...

DED-

No dount what you're saying, and no doubt that's what the statistics really show.

But the lede very clearly says: "The productivity of American workers slowed in the spring while wage pressures increased."

It doesn't say the rate of productivity slowed. It says productivity slowed.

It's this kind of deliberate obfuscation, combined with the government's cherry-picked (or out-right fictional) statistics, that leave American citizens in the dark about their own economy, their own wages, their own livelihoods.

1:12 PM  
Anonymous Res Publica said...

I heard that story on NPR this morning, and I'm glad I'm not the only one who gets pissed off at the way the press reports on wages and inflation. The way they talk about "wage pressure" like it's some kind of national scourge, you'd think they don't, you know, work. You know, for wages.

1:32 PM  
Blogger Thrillhous said...

Here here, Mike. The idea that increasing wages is a bad thing has always driven me nuts. The money has to go somewhere, and for the last 30-40 years the vast majority of it has gone to the fat cats. What does the media do? Celebrate the fat cats as titans of industry. But if regular folks get a few more nickels a week, the sky is falling.

7:18 AM  
Anonymous Mike said...

Thrill-

If you look closely at not only media BS, but at policy, it's very clear that the Fed and whatever administration's in power (GOP or Dem) looooove inflation, solong as the excess liquidity goes to large banks, to huge investment houses, into real estate speculation, etc.

They don't even mind if it goes to Joe Sixpack . . . so long as he keeps buying sixpacks. It's only when consumers start hoarding that new money (because in their hearts they know it's worth less -- see: the 70s), that it suddenly becomes a "problem."

8:26 AM  
Blogger DED said...

It doesn't say the rate of productivity slowed. It says productivity slowed.

It's this kind of deliberate obfuscation...


Agreed. It should've been clearer on their part.

6:31 PM  
Anonymous Mike said...

It should've been clearer on their part.

If clarity was even part of his plan. I wonder sometimes.

6:38 PM  

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