Did you hear this news, prominently featured on talk radio?
The American Political Science Association Annual Meeting.
… It's a chance to introduce highlight criticism of policies to a lot of people. And I noticed that the hurricane center's track is —
and I'm not alleging conspiracies here. The hurricane center is the
regime; the hurricane center is the Commerce Department.
It's the government.
And I'm noticing that that track stayed zeroed in on New Orleans day after day after day. And
the APSA reacted to it accordingly, canceling the entire convention. What could be better for the Democrats
than the egghead profs cancel their meeting? Even though the
media wasn't going to televise a lot of it anyway, they can't televise
it if it isn't happening.
[Humor Alert!! Undaunted by the confusion from my last effort to educate through humor, I am trying again. Sometimes it is helpful to start with something so outrageous that it is obvious to all. Then you gradually move to equally silly ideas that actually have plausibility for some.
There is an important investment lesson here in the conclusion, so bear with me.]
The fake quotation above is almost true. The only changes are that the APSA has been substituted for the GOP and New Orleans for Tampa. (HT to Brett LoGiurato at Business Insider for the original story).
This is a great example of misunderstanding how the Federal government works. Here is the real story. Radio host Rush Limbaugh claimed that President Obama was ordering the National Weather Surface to forecast the hurricane's path towards Tampa specifically to disrupt the Republican National Convention. On Wednesday, Limbaugh said:
"The National Hurricane Center, a government agency, [is] very hopeful that the hurricane gets near Tampa…The National Hurricane Center is Obama. The National Weather Service is part of the Commerce Department. It’s Obama…I can see Obama sending FEMA in in advance of the hurricane hitting Tampa so that the Republican convention is nothing but a bunch of tents in Tampa. A bunch of RVs and stuff. Make it look like a disaster area before the hurricane even hits there."
First, this is a classic example of one of the most common fallacies people have about government. Keep in mind this isn't any sort of partisan issues. Pundits of all stripes are susceptible to this same sort of thinking. The temptation to view bureaucracy as a monolithic entity, always obeying the President, is strong, but severely misguided.
In fact, the relationship between any US President and the federal bureaucracy is very complex. The scientists and bureaucrats working in the National Weather Service have long careers that transcend several presidential administrations. The so-called skeptics who suggest conspiracy at every turn should stop and think of Occam's Razor: That which can be asserted without evidence, can and should be dismissed without evidence.
Second, it is what I call "light switch thinking." Most events involve probabilities, not a "yes or no" outcome. No matter what the outcome in Tampa or New Orleans, the risk was there.
No matter the outcome on the policy effects of Bush, Obama, and the Fed, the actual result must be compared with what would otherwise have happened.
Is this Important?
To my surprise, a significant fraction, over 20% of my economic blogging colleagues in the regular quarterly poll conducted by Tim Kane (now at the Hudson Institute, doing a new blog with Glenn Hubbard — best of luck on both fronts!), continue to believe that government data paints an overly rosy picture. Check here for all of the results.
We see this kind of reasoning repeatedly, as multiple sources criticize government data. Typically they think that the President has the power to cook the books. In fact, the top-level statisticians spend careers trying to get everything right — imputing job creation, measuring inflation, and doing seasonal adjustments. The people criticizing the data have no background, no education, and no experience.
Professional policy anlaysts take pride in speaking "truth to power." This seems to have been replaced by those serving up lies to the masses — telling them what they want to hear.
There is an important investment lesson, and it is simple.
There is a bull market in deception.
Sometimes the motive is politics. Other times it is selling gold. It might be a lucrative deal with a hedge fund, perhaps steering funds to manage. It could simply be pandering for page views, since the conspiracy story sells best.
One of their predictions has been a multi-decade forecast of hyper-inflation, supposedly unrecognized by government data. Let's check the prices:
Shadowstats subsrciption six years ago: $175.
Subscription now? $175.
If you want to follow economic progress, you need only follow the data. If you want to cater to your pre-dispositions, you can always find a source that will spin your way!