In response to my interview on 1320 WILS AM last Friday where I pointed out some contradictions in the data presented by MSU Professor Charles Ballard in last Thursdays Michigan Future Business Index release by the Michigan Business Network, Tony Conley this morning did an extensive interview with Prof. Ballard to defend himself. This is the proper way for media to handle controversies. You can go to 1320wils/pages/tony-conley-morning-show and click on Charles L. Ballard under December 15 to listen to his interview. There is never enough time to go over every point that needs addressing, so you have to understand that no interview will every be comprehensive. Had Prof Ballard been asked about all of the points in my interview, I believe his responses would have been more enlightening. I also have some objections to some of his answers. First, it was played up that I consider declining oil prices to be bad news for the US economy. That is not exactly accurate. As I stated in by two commentaries on 1320 WILS two weeks ago, falling oil prices are wonderful for consumers, partly good and partly bad news for the private business sector, and a horrible development for the government. I predicted that federal and state governments would be forced to push up what consumers pay by raising taxes or putting other regulations that restrict inexpensive oil. Second, Prof. Ballard stated that different government statistics do not change in an exact one-to-one correlation with each other. That is correct. However, generally statistics tend to move in the same direction as each other, even if not to the same degree. So, when there is an especially large jobs increase, far above the increase of the population, there should normally be an increase in the percentage of working-age population who have jobs, the number of people who are counted as unemployed should have dropped, the percentage of the working force that is unemployed, and the amount of payroll taxes being collected by the IRS should all have changed, even if to a lesser degree than the reported jobs increase. None of this happened! When all but one statistic are consistent with each other, that is a sign that the one that is not consistent is more likely to be incorrect that all of the others. Third, Prof. Ballard took me to task for saying that government statistics are fabricated to what the government wants to report. Unfortunately, this is a fact, not my opinion. For both the 2012 and 2014 elections, whistleblowers have now confirmed that they were pressured by their supervisors to file reports that people they could not reach on the telephone had actually been contacted and stated that they held jobs. The result of this falsification of data for the last non-farms payrolls report before the elections tended to overstate jobs and understate unemployment and help incumbent politicians get re-elected. Further, the raw data reported by the Bureau of Labor Statistics showed that the actually count reflected a decline of 270,000 jobs from the prior month and not the seasonally adjusted reported figure of +321,000 jobs. Prof Ballard totally ignored this discrepancy between these two BLS figures. Finally, each months report has a fudge factor called the Birth/Death adjustment which even the BLS statisticians admit is an inaccurate adjustment. At least once a year, in the February report for January, the BLS basically undoes the distortion in the jobs report for the past 6-12 months since the last correction. In my interview, I objected to Prof. Ballard showing a long-term graph where the methodology of calculating the data over time had changed. This makes the graphs statistically invalid, which Ballard did not disclose. This subject was not covered in Prof. Ballards interview. Prof. Ballard spent significant time complaining why I was picking on him in particular and not the other speakers who also had generally positive reports during this program. I would have thought the answer would have been obvious in two directions. First, the other speakers were reporting on elements of the local economy while Prof Ballard reported national statistics, where I poked holes in the statistics he cited. I did not discuss the local economy as I have far less information on that data. Prof. Ballard also said that his report was supported because the Michigan Future Business Index showed the evaluation of the economy by business people agreed with his general outlook. Well, when the only information that business people generally hear is the false economic reports, how would you expect them to respond to the survey? If a group of business people had been provided a fuller picture of the economy, Im confident their outlook would have have been as positive as it was. That is the whole point of my objection to Prof. Ballards presentation. When business people are fed incomplete and false economic information, they will be more likely to make poor decisions for the future of their business than if they had good information.
Posted on: Mon, 15 Dec 2014 15:24:33 +0000
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