The Bureau of Labor Statistics recently admitted that 818,000 fewer jobs were added from March 2023 to March 2024 than previously reported. That’s no small number, and it’s an indication of how significant the issues with government statistics are. Unfortunately, this isn’t the only time that government agencies have misrepresented vital economic statistics.

Though jobs figures are an important metric, inflation hits home for every American family. Today, Americans are paying over 25 percent more for groceries than they did five years ago. But if you ask the experts, inflation is under control, clocking in at an annual rate just above three percent. According to them, as The Atlantic crowed in June, the U.S. economy has reached “superstar status.”

In fact, the mainstream media now holds that “Americans trust feelings more than facts” and can’t be expected to understand complicated economic realities. Anyone want a side of fries with that pile of steaming condescension?

Rather than blaming people for trusting their own experience, we can explain the American voter’s dissatisfaction with the economy by looking at the way that economic statistics are calculated. Sadly, it’s a story of bipartisan corruption. As economist Chris Martenson shows, starting in the 1960s, a series of Democrat and Republican administrations realized they could fool the American public by fudging the numbers.

John F. Kennedy was the first to water down economic statistics. When the unemployment rate started looking unfavorable, his administration decided to remove “discouraged workers”—those who are eligible to work but haven’t actively looked for employment in the last four weeks—from the unemployment statistics. It worked like magic. Without actually increasing employment, his administration could claim to have reduced unemployment.

The idea caught on. Lyndon B. Johnson rolled out a new “unified budget” that counted Social Security surpluses, which used to be sizable, as part of the general budget. This had the effect of making the deficit seem much smaller without actually changing anything about government spending.

The inflation rate was the natural next step. One would think that inflation is measured by comparing the cost of a basket of goods and services that American families commonly consume, like gas, groceries, and utility bills, from one year to the next. But Richard Nixon changed this. Under Nixon, food and gas were deemed too volatile to be included in the inflation rate, so his statisticians took them out to present a new “core inflation” rate, one that conveniently excludes gas and groceries!

As if that weren’t enough, Bill Clinton empowered a commission to further muddle the statistics. They invented three new tricks to make inflation seem better than it is:

• Substitution. When the price of a good or service rises a lot, it is swapped out with a good that isn’t quite as expensive. For instance, if the price of beef rises, statisticians will remove it from the basket of goods they track and substitute turkey instead.
• Weighting. When the price of a good or service rises rapidly, statisticians give it a lower weighting on the assumption that people will consume less of it, thus reducing its effect on inflation.
• Hedonics. When product quality improves, the Bureau of Labor Statistics argues that the “real cost” of each good goes down. So when the iPhone 15 offers marginally better performance than the iPhone 14, the government registers a lower price than people actually pay, arguing that this is the best way to account for new features. Hedonics now adjusts almost half of the goods and services that make up the consumer price index, which is widely referred to as “the inflation rate.”

With all these changes to the data, is there any way to know what the inflation rate would be if the government still used the same methodology that it relied upon before Clinton’s changes? There is. An immensely useful website, shadowstats.com, publishes alternate inflation charts that estimate what the inflation rate would be if it were calculated according to more straightforward methods. Their finding?

Consumer inflation often doubles when you remove the effects of substitution, weighting, and hedonics. In May of 2023, the official inflation rate hovered at about 4 percent, but under the methods that were in place in 1990, it was nearly 8 percent. Using the methods in place in 1980, it was about 12 percent.

It seems that the uneducated American consumer has a much better sense of real price inflation than any of the experts.

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