phik

This article in Money invites you to “Put today’s economic peril in perspective.” What a good idea:

Before you panic over today’s headlines, and how far stocks could fall, consider the relative health of today’s economy.

In the early 1970s, economic output was falling. But today, despite the sluggishness, GDP is still inching ahead.

In the early 1980s, unemployment hit 10.8%. Today, the rate is 5.5%, or about half that.

Inflation topped 12% in the 1970s and 14% in the early 1980s. Today, it’s at 4%.

What the article does not mention, of course, is that since the 1970s the official government numbers have become steadily less honest; just as SAT scores were manipulated to appear better, so too have GDP, unemployment, and inflation. What would that perspective be if we used the same methodologies, compared apples to apples?

Economist John Williams does precisely that, at shadowstats.com. It is particularly interesting to contrast the above with his recalculations:

In the early 1970s, economic output was falling. But today, despite the sluggishness, GDP is still inching ahead.

In the early 1980s, unemployment hit 10.8%. Today, the rate is 5.5%, or about half that.

Here, even the official Bureau of Labor Statistics will admit the awful truth when you look at U-6 — that’s the number that includes not just the “officially unemployed,” but also people who have stopped trying, or work part-time because they can’t find full-time work.

Inflation topped 12% in the 1970s and 14% in the early 1980s. Today, it’s at 4%.

You don’t have to be an economist to know which of those numbers ring more true.

[Update: Harper's did a similar story a couple months ago, excerpted here.]