|Date:||Wednesday, June 28, 2006 08:37:12 (-0700)|
|From:||William B. Ryan <w_b_ryan @.....com>
Joe asks: "If this is so, then some of the concerns
often expressed about 'exactness', and 'the size of
the bureaucracy' and 'the volume of statistics' that
might be necessary to try to obtain it, would be
rather moot, wouldn't they?"
Well, it goes to the fact that statistics are not
absolute measurements of anything. Certain statistics
are chosen as triggers for policy implementation.
Take the case of the Phillips Curve which is utilized
for determining financial policy by the central banks.
Couple that with the theory that the economy is at
best in a state of quite unstable equilibrium. You
then have the justification for keeping the economy in
a condition of permanent underperformance, from our
perspective. Which requires very precise statistics
and continuous "fine tuning," lest it spiral "out of
We have the abomination of NAIRU - the "non-
accelerating inflation rate of unemployment." But
from their perspective it is not an abomination, for
they actually believe in the theory. You know that I
maintain that most things we don't agree with are
caused by incompetence, not conspiracy. And
conspiracy is merely the pejorative for group activity
we don't like.
Interest rates are being engineered upward,
"seventeen" rate increases in the past two years, we
have been informed. Because the statistics indicated
that "inflation" was inching upward, and increasing
rates would "cool" the economy, which most certainly
it is doing. The statistics definitely show that the
rate of bankruptcy is increasing, and "employment" is
falling, exactly what they and we expected.
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