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Pollyanna Creep

By Anonymous - Posted on 04 May 2008

The inflation rate has been at a relatively flat level. How is this possible when we had a housing boom and subsequent bust, gas prices are near record levels and there is a world-wide food crisis? Perhaps this is because the formula used to derive these stats are open to manipulation.

The Big Picture has a story on this and published a reprint from the Harpers Magazine titled Numbers Racket, Why the Economy is worse than we know by Kevin Phillips.

It includes references from Austan Goolsbee, who accused the government of "cooking the books" in a 2003 NYT Op-Ed. Austan is a senior economics advisor for Barack Obama.

John Williams of tracks the government reported statistics and compares them to see how the formula changes affect the numbers. The government "always footnotes the changes and provides all the fine detail. Nonetheless, some of the changes are nothing short of remarkable, and the pattern over time is what I call Pollyanna Creep."

EconStatsDistortion_HarpersMagazine-2008-05-0082023.pdf1.95 MB