GDP Liars


Abstract: American economists have been deliberately lying about the most basic data. In exchange, they live in big mansions, insider trading the system with false ideas. (As many other academics, bankers and their political leaders do, and not just in the USA, but throughout the West. Insider trading by central bankers, all over, is an hilarious instance of that: central banks always flaunt their independence from elections, but one can see they are not independent from greed!)


How does the plutocratic system work? By subjugating people’s mind into knowing false versions of what they need to know, and nothing else. Making people believe in lies to the point of unhesitatingly going to die for it, and kill millions has its advantages: see the wars in Iraq and Afghanistan, where more than 5 millions have died since the USA attacked Afghanistan on July 3, 1979. Such wars may look like distractions, and indeed they were: millions of young Americans directed their hostility against people on the other side of the planet, thus sparing those who really oppress them from any discomfort.

That is why professor Steven Pinker from Harvard is paid to tell you, or rather to hypnotize you into believing, that violence has decreased, because part of what he is paid for, is to tell you that the preceding did not happen, and, even if it did, it would be deprived of significance: who cares about 5 millions killed in the Middle Earth? And why to talk about them, as their statistically insignificant dismissal is intimately tied to what makes Harvard thrive?

To believe systematic systemic lies, it’s important that all the liars owned by the system say the same thing. It’s also important to convey a mood of crushing superiority. Because that convey a feel good sentiment that it would be an unpatriotic shame to dispel the illusion. Central has been the idea that the USA is the richest, the freest and a meritocracy second to none. In truth it is congealing into classes more impermeable than anywhere else.  

Even someone as joyfully critical as me feels a bit ashamed when Europeans visiting the USA tell me clinically that they are struck by the beggars in the streets, the crazies defecating, the general shabiness, and that it looks as if the USA is frozen with 1950s infrastructure and housing. And they don’t know about the primary schools closing all over. This even in some of the richest areas, such as the Silicon Valley, and New York. 

For years, American propagandists have been vociferating a number of important things about other countries which are enormous lies. And sometimes grotesque lies. Lying about Japan, Europe, China, Japan allows the Masters of America to persuade their subjects that they have by far the best economic, social and mental system. When all they preside over is the malignant subjugation of the many by the few.

For example the choir of plutocratic paid economists have howled for decades that European welfare states enjoy basically no growth; they call that “Eurosclerosis”. Japan has been gratified as suffering from “lost decades“. That has allowed them to heap spite on other economic systems, and promote instead transverse policies friendly to Wall Street and financial pirates.

Paul Krugman, for example, has conscientiously, and liberally, told us again and always, that much more money should be thrown at the enormously malevolent American financial system, to avoid the mythical horror of “Japan’s Lost Decades“.

And of course, Europe is dying from being so united, Krugman persists, conscientiously and liberally informing us that the old continent would do much better by spending more time biting its own throat, to avoid Eurosclerosis, while reaching the nirvana of ever smaller salaries (yes, ever shrinking salaries is what Krugman preaches, at least for European countries in economic difficulty!)

Both concepts, Japan’s Lost Decades and Eurodevastation, rest on an official growth of the GDP of the USA valued, in the average over the last few decades at above 3%. Now, even subtracting a USA population growth of 1% a year, this gives an increase of GDP of 2% for the non recently immigrated population.

Over decades, the average growth rate of France, or Germany is, officially, according to them, not much more than 1%. Thus, if one compares official European statistics versus official American statistics, one gets an advantage for the USA of 1% a year. Over decades.

So how come this is not apparent to the commons? Everything indicates  that a country such as France, over the last few decades, became richer than the USA. French life expectancy has been growing, year after year, by a quarter, every year (in spite of too much smoking). Over what American economists call “Japan’s Lost decades”, life expectancy in Japan has been growing by 4.2 years (in spite of a western diet).

Meanwhile, recently, in a way reminiscent of the Soviet collapse, life expectancy in the USA had gone down, not up. And the proposed further subjugation of American citizens’ health to for-profit companies is not going to improve matters.

Statistics can vary from country to country. Basically, the GDP consists into adding the price of all transactions. In particular, in any country, the GDP computation depend up the CPI, the Consumer Price Index. The CPI has to be subtracted from the nominal GDP growth. If the CPI is underestimated, the GDP growth will be overestimated.

So what did the American plutocratic propaganda machine did? Underestimate the CPI.

That is directly useful, because the CPI is used for computing salaries of retirees and other low lives.  If the CPI is underestimated, the low lives will keep on going down ever lower, and cost less to the plutocrats and the government they dominate. Thus the government will be able to give ever more money to Wall Street and the Shadow Banking system. Or, as Krugman would say, augment the financiers “monetary base“. (By thinking euphemistically, one can go a long way in the Dark, as Nazis did with their “Final Solution“.)

How do the plutocracy serving economists underestimate the CPI? Well, they use “Hedonic adjustments“. They meant “hedonistic“, but apparently, they can’t spell. Or maybe they can spell, but they are clever enough to understand, after a few years that “hedonistic” sounded bad. It sounded like they got to live the good life by rolling average people in flour, to batter them into delicious morsels to gobble.

The idea of “hedonic adjustments” is weirdly, but efficiently contorted. Suppose you want a ride. In 1850 CE, the only thing you could do was to ride a horse. But, 150 years later you could ride in a 300 horsepower car. The hedonic economists then say:

You ride has improved 300 times. But its price has not changed. Although it is 300 times better. So you pay the same for 300 times more. Thus the price you pay for 300 horses being the same as for one horse, the price of transportation has gone down 300 times.” So the hedonic economist enters in his books that transportation is 300 times cheaper than 150 years before.  

The result is that the real GDP of the USA has been severely overestimated, as shows. For decades. By more than 2%, a year. In 30 year, this means exponential (30) (1/50) = e^.6 = 1.8221188. In other words the Hedonistic  GDP allows to over-estimate the GDP of the USA by 82%.

[For some reason, my computer has refused to transfer pictures to WordPress, for months, so the graph can be consulted at the site where it comes from. But, in a way, it is good to not just look at the graph, but THINK CAREFULLY about what it means. What is important is its presence in the mind’s eye, not just a quick glance, with the blue line, real, true GDP, well below the red line, plutocratically claimed GDP.]  

From the graph of true GDP, the blue line well below, one can see many things.

First, the “hedonic” cheating started in 1984, another gift from Reagan, a B actor with an aircraft carrier named after him, much admired by the recent vintage American (the 85% sort who thought that go out invade Iraq and kill Iraqis was an excellent idea).

Second, the vaunted Clinton’s economic miracle averaged less than 1% over his entire reign. (One has to keep in mind that, with an immigration of more than 1% a year, that means the average plight of the average American got worse.)

Even worse: by the end of said Clinton reign, the GDP collapsed to a minus 3% rate of decrease (or shall we say collapse?). Thus the Clinton-Rubin-Summers years ended in economic disaster, contrarily to what democratic party propagandist always claim. Why? These were the years of massive deregulation, not to say massive derangement.

Third, one can also see that there was no recovery under Bush, except for a few months with positive growth, real GDP kept on going down, all the way down to a minus 6% rate shortly after Obama took office (and of which he was not responsible, obviously).

Fourth, so now, here we are. Misled by the powers that be in the democratic party, Obama put in power the same team which caused the catastrophe to start with, under Clinton. The Goldman Sachs team of Rubin. Same team, same policies. Same old, same old, what happened under Clinton, made worse by Bush. Unsurprisingly, the real GDP kept on shrinking under Obama.

Is there hope? Well, the truth should come out. Maybe it will come out in time. In “The Myth Of Japan Failure” Eamonn Fingleton points out that:”Time and again, Americans are told to look to Japan as a warning of what the country might become if the right path is not followed…Here, for instance, is how the CNN analyst David Gergen has described Japan: “It’s now a very demoralized country and it has really been set back.”

But that presentation of Japan is a myth. By many measures, the Japanese economy has done very well during the so-called lost decades, which started with a stock market crash in January 1990. By some of the most important measures, it has done a lot better than the United States.

Japan has succeeded in delivering an increasingly affluent lifestyle to its people despite the financial crash. In the fullness of time, it is likely that this era will be viewed as an outstanding success story.

How can the reality and the image be so different? And can the United States learn from Japan’s experience?

It is true that Japanese housing prices have never returned to the ludicrous highs they briefly touched in the wild final stage of the boom. Neither has the Tokyo stock market.”

And that is why American economists, who measure everything by their own crooked financial markets, have deemed Japan a failure. A government, such as the Japanese one, which spends so much money building gigantic bridges, and enforcing the world’s stiffest anti-earthquake regulations, can only be seen as a failure from the perspective of the “world’s greatest city” (Krugman), and its greatest street, the one which drives mankind into the Wall, Wall Street.

We have seen insane slave regimes before, much supported by crooked statistics, and fawning pseudo intellectuals: the USSR was a case in point. It was described as a workers’ paradise, while 30% of the population (the “Zeks”) were directly enslaved, and one could see the direct, officious, and soon official alliance between Hitler and Stalin. What we are seeing right now is quite a bit the same. But, in a way, it’s worse. The crook who was heading the Swiss Central Bank just resigned. He was forced to resign, January 9, 2012, by public outrage. Just an hour before appearing in front of the Swiss Parliament, to answer some personal questions.

Why? This playboy, a rock star, a sport figure enriched himself not just on Wall Street, where he made his fortune, but with legal insider trading as the central banker of Switzerland (his American wife made $64,000 of profit by anticipating the pegging of the Swiss Franc on the European currency, the euro, in September 2011). It’s interesting how the plutocracy equips itself with handsome sport figures to interface with the People (much of the top bankers in the USA are very tall, often with a past of professional sports, such as ex secretary Paulson, etc.)

When one pulss the strings, it works better with pretty, impressive marionettes.

Don’t worry: in the USA, it’s not just legal for public figures to do insider trading. Most politicians have access to insider information, and trade on it. That’s how most Congress creatures end up millionaires. And this does not just happen in the USA, as the Swiss example just demonstrated.

The European Central Bank just chose as chief economist another trading pirate. This Belgian vulture scavenged the world economy for more than a decade, and, now having made his fortune, will be able to steer the world to ever more plutocracy, through ever more erroneous statistics. (The ECB is becoming little more than an appendage of the plutocracy ever since a senior partner at Goldman Sachs, Draghi, became its boss!)

But nobody, in the supine American media, ever ask how American leaders become so rich, by holding public office, let alone gets outraged by it. Closing American airspace over Princess Chelsea Clinton is routine.

Nobody ask: how come the USA is becoming so poor, while its GDP ever higher climbs? Maybe everybody knows, deep down inside, and is just too afraid to ask, out and loud.


Patrice Ayme

Tags: , , ,

6 Responses to “GDP Liars”

  1. Concernicus Says:

    While in agreement with the majority of your post, where does Krugman advocate shrinking salaries? Am a regular reader of Krugman and you. Do not recall reading him suggesting reduced worker salaries. Can you enlighten me?


    • Patrice Ayme Says:

      Dear Concernicus:
      Thank you for your appreciation, and for taking me seriously.

      My patience with the American economists who advised Obama has run very thin, as I contemplate the waste of the last 4 years (which were personally devastating for me, as I went all out in supporting Obama, just to see him bring back the old rotting corpses, smelling to high heavens, such as the one Paul affectionately calls “Larry”, his old friend “Larry” from when they used to be masters of the universe at the White House!)

      I do approve of Krugman in many ways.
      However, like Obama, he makes giant mistakes, and he has to be taught right. Obama’s mistakes of course have a lot to do with getting advice from the likes of dear Paul Krugman. Krugman’s approach to workers’ salaries is both profundly erroneous, and, implictly, all over his system of thought. It’s basically the approach of his mentor, Reagan, Ronald. I don’t know who is the kettle, and who is the pot. They are both blacker than Obama himself, though.

      From Krugman’s blog:
      December 30, 2011, 3:20 pm
      Pain in the Periphery
      Via Philip Lane, a nice paper comparing the crisis responses of Ireland, Iceland, and Latvia (pdf). It develops at greater length some themes I’ve been trying to lay out, notably the fact that nobody has succeeded in achieving large nominal wage cuts.
      If I have a slight complaint, it is that the paper doesn’t mention the distinction between GDP and GNP, which is important for Ireland and makes the Irish experience look worse once you take it into account; and it also doesn’t highlight the likely extent to which the big productivity improvement that has brought down Irish unit labor costs is really just a compositional effect.
      The bottom line is that internal devaluation still looks like a very bad strategy.

      Answer: Let me quote dear Paul again, the self declared conscience of liberalism:

      It develops at greater length some themes I’ve been trying to lay out, notably the fact that NOBODY HAS SUCCEEDED IN ACHIEVING LARGE NOMINAL WAGE CUTS.
      If I have a slight complaint…”

      This is a reality check moment. Paul Krugman has the reputation to be a big time leftist, because he is roughly the only American, besides the guy at MIT, who was well known and heaped scorn on the Iraq war. If nothing else, the Iraq war turned into an unmitigated disaster for the USA: one trillion dollars spent to make way for Iran in Iraq, nothing in return.

      But what does the previous quote mean? It means that a conscientious American liberal, such as dear Paul
      Krugman, is the exact opposite of a European liberal. Paul Krugman bemoans that “NOBODY HAS SUCCEEDED IN ACHIEVING LARGE NOMINAL WAGE CUTS”.

      This is no accident, but the core of what Krugman sees as having gone wrong in Europe: some entire countries are worth too much, and workers there are paid too much. That is why he wants them to devalue. In the USA, “liberal” is supposed to mean left wing, but, for dear Paul, the conscientious liberal, it apparently means making work “large wage cuts”.

      A liberal, in Europe, is the name of somebody on the greedy extreme right who wants to cut wages, as dear Paul wants to do, and please the 1%. Thus, in Europe, liberalism is associated to Wall Street’s excesses. “Liberal” is pejorative. It is associated to the “liberties” the nobility could take by law.
      Thus, dear Paul points out that, sadness of sadness, it seems that NOBODY HAS SUCCEEDED IN ACHIEVING LARGE NOMINAL WAGE CUTS in Europe… So sad, and not at all like in the USA, led by the “greatest city in the world”.

      Krugman is up the creek of profits as what the economy is all about. Krugman riles against “austerity”. But what he seems to mean, is the austerity of profits for his friends in Manhattan eating lobsters with certified French truffle filling, and $40,000 champagne. Cutting salaries of workers in Ireland is how to achieve the lack of austerity he promotes.
      Europe will find other ways, thanks to its safety net. The Germans went through ten years of apparent stagnation and real austerity… with flying colors. No need for USA/GE/Krugman “large wage cuts”. It is true that Ireland is now much richer per head than France and Germany, or the USA, and that this is excessive. But that can be corrected without punishing workers… Just like Germany did, with “Kurzarbeit”. Krugman is implicitly disparaging, or let’s say not singing the praises of “Kurzarbeit”.

      Verily, “Kurzarbeit” is something one would have expected the French to invent: workers worked less, went to school, accepted half salaries or so from their companies, which promised to not fire anybody, and not delocalize, while the state moved in to pay a large part of the salary deficit of the workers. The result was that German high tech companies expanded research and development considerably during the crisis. Which brings us to another mistake Krugman makes about Germany, namely the nature of its trade surplus. Hint: it’s increasingly less about Europe.


  2. Old Geezer Pilot Says:

    You should consider that GDP misstates “goods and services” because it adds in “BADS and DIS-SERVICES”. To wit: a company processes a certain mineral, spewing waste into the public waterways. A pollution control equipment company makes machinery to solve that problem and keep the water in compliance with the Clean Water Act.

    BOTH are included in GDP. Why is not the second SUBTRACTED from the first?


    • Patrice Ayme Says:

      Dear Old Geezer Pilot:
      You are entirely correct. What you point out is one of the (many) problems with GDP. One of the reason that the GDP of the USA is so strong is that, when millions of cars move at parking lot speeds, that augments GDP. That augments it much more than when a Very High Speed train whisk people at 300 feet per second. The High Speed train is roughly 30 times more efficient in many important ways. Thus, the more efficient, faster and better the transportation, the less the GDP, the more static and inefficient, the more the GDP!

      Years ago I thought that GDP should be disgarded for AWE (Absolute Worth Energy). One thing AWE would do is stop considering waste as productive.

      “GDP liars” had a much more modest aim: to show that, even when one entered the semantics and logics of conventional economists, tremedous lying of a most significant type is central to the scam.
      Looking at real GDP shows we really have a GREATER DEPRESSION.


  3. Dominique II Says:

    “no armed intervention there, as long as the West does not get secular guarantees, I say.”

    Fair enough.

    However the West is led by a thinly veiled theocracy which keeps falling in love with any third-world leader who has found God, preferably in some archaic and freedom-hating guise.

    The West’s secular part is pitifully outnumbered and its military means are woefully overstretched. And Europe simply keeps being denied military or diplomatic existence. Not by accident…

    Thus such guarantees will never be demanded, let alone granted.

    And this leaves alone the issue of the very worth of “secular guarantees” from countries where the population would hate the very idea, thus making such guarantees undemocratic and open to sudden lurches. (btw declaring oneself secular in the US is political suicide…)

    There was a time when Assad’s father could exterminate whole towns and the West shrugged it off, saying in effect, we didn’t see a thing, and they’re Muslim Brothers anyway. Maybe that was not such a bad idea, as horrid as it now sounds. It was, at any rate, making sense, whereas our current compulsive, contradictory, self-defeating meddling does not.


    • Patrice Ayme Says:

      Dear Dominique: Assad Father was eradicating in peace, because there were no phones doubling as cameras…

      The theocratic leadership in the West is mostly make belief, and confined to the USA. I don’t believe that Obama believes in the Christian god in any sense, except as an expanded father Xmass story.

      I don’t even believe Santorum believes, as his Kennedy slip demonstrated: it was so much over the top, so happenstance… Obviously he says whatever to pose as a member of the Catholic Inquisition.

      I don’t even believe that most of the American popualtion believes as much as believing that it looks good to believe, as it proves they invade other countries, not for oil or plutocracy, but because their heart is good…

      This being said, make belief can become real belief, as the case of egypt is presently demonstrating, and the theocrats in Saudi Arabia know this well, as they shower their agents in Egypt with money (TV channels!), to impose their sorry superstition.

      Militarily, Britain and France could do Syria alone, and France could start it, alone, as in Libya. French Rafales have demonstrated their capability to suppress a fully functioning air defense system (Libya had even some very recent, unlawful anti-aircraft rockets). But it’s not smart to crush Alawites (old French military allies, by the way) at this point. As shown in Iraq, there are worse things than the Baath party… Same situation to some extent in Iran: Iran is NOT (according to USA intelligence) developing nuclear warheads at this point. But it SURELY would, should it be attacked…

      And believing that one Israeli raid with 100 planes could domesticate Iran is beyond naive. Iran is a gigantic, very beautiful country (I have lived there). It also has an immensely old civilization, thrice older that stupid Islam. If Iran was attacked, ALL Iranians would have a right to be very upset… As it has its own civilization, its nationalism is anchored deep, and justifiably so.


What do you think? Please join the debate! The simplest questions are often the deepest!

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: