Drudge has this headline, but no link quite yet:
The government plans big revisions to historical economic data... Developing...
Well, well, well. President Obama is asking his people to revise down the economic numbers from past years so his economic numbers today don't look quite as bad as they are in reality. Because Obama predicted that the economy would begin to come out of its recession by the end of this year, he's got to deliver, especially since so many private sector economists blasted his team's predictions as pie in the sky.
Economic data are expressed through comparisons, i.e. the economy grew or contracted by X% compared to the same period last year. If you want this year's economic numbers to look better than they actually are, then you manipulate the numbers from months and years past that you compare them to. This is what Obama's economic team is doing in order to save the president's butt. Obama now has pointed to those revised numbers and has announced in his Saturday morning video address, "Look our stimulus boondoggle is working! We said the economy would start to show signs of life by the end of the year, and now with our revisionist economic history, by gosh it is!"
It's blatantly corrupt and manipulative, which falls in line with this administration's MO. It's also another opportunity to prepare for the health care fight that's coming in September. If he can convince the American people that his economic policies are working, he has a better chance of ramming his health care reform plan through.
Interestingly, it seems these revisions have been taking place for a few months now. Keen-eyed Michael Panzner at The Big Picture picked up on a bit of downward economic revisionism that was taking place a few months back in May:
Well, I went back and had a look at the differences between the reported and revised data for various series, including monthly retail sales, nonfarm payrolls, industrial production, and durable goods orders, to try and figure out if the cynics are right.
Using data from Bloomberg, I calculated whether the revised data for each month was lower than the first-cut estimate. Then I tabulated 12-month running totals for each series to see if there has been some sort of systematic bias (in other words, whether the pattern of monthly downward revisions was trending higher instead of undulating up and down).
To make the comparisons easier, I subtracted the 12-month tally as of May 2002 (an arbitarily chosen date) from the monthly totals for all four economic series so that the starting point for each would be the same -- zero.
Based on a quick read of a graph of the data (see below), it does seem as though the pattern of negative revisions has been trending higher lately, especially during the past year or so, suggesting that the cynics may be on to something.
After the president made his announcement yesterday using his team's revised economic data, the water-carrying mainstream media fell in line:
Yahoo News: Recession was Deeper in 08 than Previously Known
The Washington Post's headline is especially sycophantic. The editors at the Post have gone above and beyond the call of duty in its headlining to make absolutely sure the American people know that this new economic data coming out of the White House is the absolute truth: Now, a Clear Reading on Recovery; GDP Data Will Settle Whether Positive Signs Elsewhere Add Up to Progress
The content of the article is especially thick with Obama's brand of hopenchange:
Friday morning, word on how fast the U.S. economy shrunk this spring will cross financial wires -- and with it, new clarity on whether the deepest recession in generations is winding down.
The Commerce Department plans to announce gross domestic product data for the quarter from April through June. It is the broadest measure of the nation's economy. The report, on the value of goods and services the nation produced, generally looks backward, offering a historical view of where the economy has been.
This time, though, it will help answer one of the great questions of the summer -- is the economy on the verge of expanding again, or have signs of progress in other data represented a false dawn?
Just ignore the men who are revising economic data behind the curtain.