>Doug, some of the more paranoid bears I read are convinced there is a
>fairly concerted effort on the part of government statisticians to
>massage the numbers and revise calculations in order not to upset the
>markets. Do you think there is anything to this?
Some of the revisions are pretty defensible, like counting software as an investment. This is in accordance with prevailing international standards. Counting public pension fund contributions as personal, rather than government, savings also seems pretty reasonable. But the set of changes related to the CPI - which have rippled through the statistical machinery, resulting in better looking growth and productivity numbers - are pretty smelly. The BLS made a heroic stand of resisting pressures to redefine the CPI, but then pretty much gave their critics everything they wanted. The only changes that were contemplated were those tending towards a lower inflation figure; arguments to the contrary were completely ignored. I wasn't following this stuff all that closely during the early Reagan years, but my impression is that the CPI change is a far more egregious case of political manipulation than anything Ronnie tried. Their big scam was trying to include the military in the employment figures to lower the unemployment rate by a tenth of a percentage point - a switch that was widely ignored (people still quoted the civilian unemployment rate, even though the broader measure was the one the BLS featured in its monthly releases) and quickly reversed.
Doug