Most of us know we live in a time of lies.
We’re not winning in Iraq, and we’re not fighting for freedom there. Freedom is not on the march, especially not in the U.S. Global warming is affecting us. We are not really at war. American technology is losing its edge. Deficits matter.
All these are political lies.
The most dangerous lies, however, are economic. These lies blind us in dangerous ways. They can make you broke in a big hurry.
There are always such lies around. Yahoo in 1999 was not a good investment. Oil prices were not headed to the Moon in 1980.
But these are micro-economic lies. They impact only some of us. Far more dangerous are the macro-economic lies, the lies told with statistics and repeated over-and-over again by "experts." CNBC lies.
Here are some of the most pernicious:
- Inflation is in check. False. Energy prices are impacting all of us. Food costs more. Getting to work costs a lot more. The way the CPI is being calculated is, frankly, bogus. Productivity gains are hiding a lot of inflation that is simply not being acknowledged.
- The stock market is rising. False. The stock market has been treading water for over five years. What has been happening is that earnings have slowly been catching up with prices. We are only now reaching historic multiples of prices to earnings, yet the leak in the market still exists.
- The economy is growing. False. Housing is growing. Free money, government subsidies (both direct, indirect and hidden) and rampant speculation make homes appear to be worth many times more than they were a few years ago, creating what looks like economic growth. But it’s false growth, built on government-funded sand.
Pop any of these lies and a lot of things happen. A lot of bad things.
People start losing their jobs, their homes, their lifestyles. The
economic impact will be like 100 Katrinas all at once. The only
solution will be to inflate the currency, to sacrifice our world
economic leadership in order to keep the society together.
Lies, damned lies and statistics. And the worst of these is statistics.
