The pretense of honesty

I had mentioned that the government tells lies about the unemployment rate, "adjusting" the numbers according to this theory or that theory. Mish quotes from an article that addresses some of these jobs numbers [all emphasis is mine]:

What was really key were the details of the Household Survey, which provide a rather alarming picture of what is happening in the labour market.

First, employment in this survey showed a plunge of 392,000, but that number was flattered by a surge in self-employment (whether these newly minted consultants were making any money is another story) as wage & salary workers (the ones that work at companies, big and small) plunged 637,000 — the largest decline since March (when the stock market was testing its lows for the cycle).

Right, so they call people up and they say "Well, I'm self-employed... I'm setting up my own consulting business." And maybe their income from that business, for this month, was negative $500. Doesn't matter. They still count as employed.

As an aside, the Bureau of Labor Statistics also publishes a number from the Household survey that is comparable to the nonfarm survey (dubbed the population and payroll-adjusted Household number), and on this basis, employment sank — brace yourself — by over 1 million, which is unprecedented. We shall see if the nattering nabobs of positivity discuss that particular statistic in their post-payroll assessments; we are not exactly holding our breath.

Wow-- a million jobs lost last month. Seems like that would make the news, no?

In the Dmitry Orlov presentation called Closing the Collapse Gap, in which he talks about the fall of the USSR and its similarity to the coming denouement of the US, he says that the Soviet collapse was harder to predict because of government secrecy. Well, I'm not so sure about that. Everyone acknowledged that the Soviets, having a command economy and an opaque, secretive government, would be dishonest about their fiscal situation. The US government pretends to be transparent, but they sure do play with the numbers. Some of the people watching CNBC don't seem to understand that this is cheerleading and lies, or that the jawboning coming from the Fed and Treasury are more of the same. Most people probably don't believe that the Fed has found ways to buy our own Treasuries without admitting to it (first using Cayman Islands accounts, and then using "swap accounts" or "swaps" with other central banks-- I can't claim to understand all the details). Which is more dangerous-- flat out stonewalling, or the illusion of honesty and transparency while they're lying through their teeth?

All news media outlets reported August job losses of 298,000 216,000, the official number the government likes to use. [Edit: 298,000 was the ADP estimate.] Meanwhile other estimates put the real figure at over 1 million, but few news articles, if any, will mention such a horrifying figure. I think green shoots might prove worse for the average person in the US than secrecy. Secrecy makes citizens suspicious, and rightly so; green shoots give them the warm fuzzies. As it grows harder to maintain confidence in the US dollar, in US stocks, and in Treasuries, the incentive for government to lie becomes stronger and stronger. Before it's all over they might be making up numbers out of whole cloth, yet some folks will still believe they are honest.

So I think Mr. Orlov might be wrong; it might be harder to predict the timing of the demise of the United States.