Category Archives: Economic theory and policy

The first new economic aggregate since the introduction of GDP

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One of the great mysteries of economics as it is now is to say that consumption comprises 60-70% of the economy and that therefore we must stimulate consumption to stimulate economic growth. But the reality is that so far as the value added of different activities go, consumption contributes either around 6-7%, which is the soak up of resources in the retail sector, or 100% which when all is said and done is the ultimate contibution consumer demand makes since final consumption is the point of all economic activity. As with so much in economics today, the problem starts from the Keynesian mindset that pervades macro.

The great Austrian economist, Mark Skousen, has been hassling the American government for many years to fix up the way they gather and report statistics and of all things, they have now begun to supplement their usual national accounting stats with a measure that actually burrows into the data in ways that show the underlying supply-side contribution of different sectors of the economy.

Forbes in its latest issue carries an article by Skousen, Beyond GDP: Get Ready For A New Way To Measure The Economy, which explains what is being done and how it will make a difference.

Starting in spring 2014, the Bureau of Economic Analysis will release a breakthrough new economic statistic on a quarterly basis. It’s called Gross Output, a measure of total sales volume at all stages of production. GO is almost twice the size of GDP, the standard yardstick for measuring final goods and services produced in a year.

This is the first new economic aggregate since Gross Domestic Product (GDP) was introduced over fifty years ago.

The disastrous Keynesian wreckage that has been devastating economies across the world has to a large extent been driven by the Y=C+I+G+X-M formula which everyone learns in first year and then, because it is so ridiculously simple, is never forgotten again. It helps establish in the minds of economists, governments and the public that economies are driven from the demand side when it is the one place that an economy receives no momentum at all. As Mark has put it:

By focusing only on final output, GDP underestimates the money spent and economic activity generated at earlier stages in the production process. It’s as though the manufacturers and shippers and designers aren’t fully acknowledged in their contribution to overall growth or decline.

There are no perfect measures at the aggregate level and the double counting that affects such an aggregate is noted by Skousen. But anything that can finally place the focus on the production side of the economy and end the preoccupation with demand is a massive step forward.

I hope the ABS is taking note.

Hayek on Keynes’s ignorance of economics

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I’d never seen this before and was apparently first published on 29 September 2012. The notes on the Youtube clip read:

Friedrich Hayek explains to Leo Rosten that while brilliant Keynes had a parochial understanding of economics.

“Parochial” is quite a word when the clip actually speaks of Keynes’s ignorance. It is well known that Keynes had a third rate understanding of economics but was a genius at polemical writing. After Marx, Keynes is the most destructive economist who has ever lived.

It is also interesting that Hayek sees understanding the history of economics as an important part in the education of an economist. Keynes’s ignorance of the economics of the past was seen as a great failing, a failing which now besets the whole of the profession. I wonder how much any modern economist would know about the monetary economists Hayek lists assuming they even know their names.

[My thanks to Harry for sending this on.]

Macro follies continue

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It’s been five years of this Keynesian mess with the notion that economies are driven from the demand side. At the start it was direct government spending. As an approach to recovery it has comprehensively failed as no one now denies. So we have now gone to the monetary policy approach with Quantitative Easing, pour money out into the economy and low interest rates will finally lift things up. Also not working but no one knows why. So here’s why, and odd that you have to come to this website to get the only sound economic advice available anywhere. But here is why. Economies are driven forward by increases in value adding supply and by absolutely nothing else. Others can tax, steal or otherwise appropriate the productivity of others and squander what they get. But this will NEVER lead to a recovery, not ever. So we have kept rates low and watched as nothing has happened. Unexpected to others but not to anyone who understands the classical theory of the cycle and Say’s Law.

Anyway, it’s that time of year again. Macro follies continue and no one seems to have learned a thing. And it’s not just consumer spending but all unproductive spending that is a draw down on productivity. Consumer demand is, of course, the reason for bothering with any production at all. But if we are thinking about growth and employment, consumer and government demand has nothing to contribute, nothing whatsoever. Nor does mis-directed investment spending. If you don’t understand why, ask someone to give you a copy of Free Market Economics: an Introduction for the General Reader for Christmas. It’s what I gave everybody last year so why shouldn’t you have a copy yourself?

Ha-Joon Chang – interviewed in the FT

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An economist after my own heart, Ha-Joon Chang by name, and interviewed in The Financial Times. These are the passages from the interview that related to economics and economic theory:

‘I am one of the most successful economists, according to what markets tell us, though most of my professional colleagues, who are much keener to accept market outcomes than I am, would dismiss me as a crank or – the worst of all abuses among economists – a “sociologist”.’

Chang conducts his guerrilla war against economic orthodoxy from a cramped office at Cambridge university’s Sidgwick site. For him, economics is a tool for changing the world, not for explaining why the world is as we find it. He is a reader at Cambridge rather than a full professor, a relative sidelining he attributes to his heterodox approach. ‘I don’t do maths,’ he says, blinking softly through his round, silver-rimmed spectacles. ‘A lot of economists think I’m not an economist.’

He is, though, a star with a big following. In the wake of the global financial crisis, organisations such as the International Monetary Fund – which used to regard him as ‘an oddity’ – regularly invite him to speak. Still, he reckons the economics profession overall remains resistant to fresh ideas, clinging to its status as a pseudoscience undergirded by unbreakable mathematical rules. ‘These things do not change overnight. The German physicist Max Planck once said science progresses one funeral at a time.’ . . .

‘The predominant view in the profession is that there’s one particular way of doing economics. It’s basically to set up some mathematical model, the more complicated the better,’ he says, advocating instead what he calls a multidisciplinary approach. ‘In a biology department, you have people doing all sorts of different things. So some do DNA analysis, others do anatomy, some people go and sit with gorillas in the forests of Burundi, and others do experiments with rats. But they are called biologists because biologists recognise that living organisms are complex things and you cannot understand them only at one level. So why can’t economists become like that?

‘Yes, you do need people crunching numbers, but you also need people going to factories and doing surveys, you need people watching political changes to see what’s going on.’ . . .

‘They don’t get huge brownie points for writing for the general public because a lot of economists have a very dim view of what the general public can understand,” he says. “But the Freakonomics guys are accepted as part of the mainstream because they have this very particular view of human behaviour, which is “rational choice”. That is: “We are all selfish, we basically do our best to promote our self-interest and that choice is made in a rational way.”‘

‘I don’t take that view,’ he says. ‘Rational thinking is an important aspect of human nature, but we have imagination, we have ambition, we have irrational fear, we are swayed by other people, we get indoctrinated and we get influenced by advertising,’ he says. ‘Even if we are actually rational, leaving it to the market may produce collectively irrational outcomes. So when a bubble develops it is rational for individuals to keep inflating the bubble, thinking that they can pull out at the last minute and make a lot of money. But collectively speaking . . . ’

I ask how the economics profession has been hijacked by a single methodology. ‘Hijacked, yes. I think that’s right,’ he says, evidently pleased with my choice of word. ‘Unfortunately, a lot of economists wanted to make their subject a science. So the more what you do resembles physics or chemistry the more credible you become. The economics profession is like the Catholic clergy. In the old days, they refused to translate the Bible, so unless you knew Latin you couldn’t read it. Today, unless you are good at maths and statistics, you cannot penetrate the economic literature.’

This, he says, leaves economic decision-making to a high priesthood of technocrats and central bankers. ‘Fat chance that a union official in Bradford will be able to beat the academic spouting rational choice theory,’ he says. This – and here is his punchline – suits those with money and power. ‘If you have a professor from MIT or Oxford saying that things are as they are because they have to be, then as a person benefiting from the status quo you can’t be happier.’
. . .

‘A lot of social democrats bought into that fairy tale [of market perfection],’ he says. ‘That’s why I am writing these popular books, because people have been told a very particular story and they need some antidote to it. I’m not saying I have some kind of monopoly over truth, but at least you need to hear a different side of the story.’

We turn to his childhood, when he witnessed first-hand how economic policies can transform a country’s fortunes. He was born in Seoul in 1963. His father was a finance ministry official and his mother a teacher. Two years before Chang was born, Korea’s gross domestic product per capita was $82 compared with $179 in Ghana. He remembers how red the soil was in Seoul, now one of the world’s most neon-filled cities, because all the trees had been cut down for firewood. ‘I wasn’t deprived,” says Chang, who grew up in a house with two maids and the neighbourhood’s first television set. “But poverty was everywhere.’

Park Chung-hee had recently seized power in a military coup. Korea established a steel industry, a seemingly eccentric choice for a country without iron ore (it had to import it from Australia and Canada) or coking coal. Yet steel became a foundation of Korea’s industrial success. Chang believes that Park, though a dictator, made some smart choices and that the only countries to have prospered are those that ignored the siren call of free markets and comparative advantage – the idea that you stick to growing bananas if you’re a tropical island – and planned their escape from poverty. . . .

His studies consolidated his thinking. Countries, he argued, needed to develop their capabilities, just as a child’s potential is stretched in school. In 1955, for example, when General Motors alone was producing 3.5m cars, Japan had 11 or 12 manufacturers collectively producing 70,000. ‘From the short-term point of view, it was madness for Japan to try to develop an auto industry,’ he says. ‘Except that the Japanese realised, “We will get nowhere if we stick to what we are already good at, like silk.”‘

But can’t the protection of infant industries go terribly wrong? In countries such as Argentina and India, closed economies led to lazy monopolies selling shoddy goods in the name of self-sufficiency. Chang agrees. Only those states that forced their entrepreneurs to compete internationally succeeded, he says. ‘In Bad Samaritans, I have this chapter called “My Six-Year Old Son Should Get a Job”. I’m trying to explain that the reason I don’t send this little guy to the labour market is because I believe that it pays, in the long run, for him to have an education rather than shining shoes and selling chewing gum. Protection is given with a view to eventually pushing your companies into the world market in the same way that you send your kids to school but [you] don’t subsidise them until they’re 45.’ . . .

‘We have been led to believe that the market is some kind of natural phenomenon. But in the end, the market is a political construct.’ The regulations around us – for instance those banning child labour or private money-printing – are invisible, he says. He cites the example of how Park’s government engineered a 30 per cent jump in wages through a massive shrinkage of the labour force. It was achieved, he explains, by making education compulsory up to the age of 12, removing at a stroke millions of children from the labour pool. Policy changed the market reality. . . .

We’ve been talking for nearly two hours but he still has bags of energy and I still have bags of questions. What’s all this about the washing machine and the internet?
‘I was not trying to dismiss the importance of the internet revolution but I think its importance has been exaggerated partly because people who write about these things are usually middle-aged men who have never used a washing machine,’ he replies. ‘It’s human nature to think that the changes you are living through are the most momentous, but you need to put these things into perspective. I brought up the washing machine to highlight the fact that even the humblest thing can have huge consequences. The washing machine, piped gas, running water and all these mundane household technologies enabled women to enter the labour market, which then meant that they had fewer children, had them later, invested more in each of them, especially female children. That changed their bargaining positions within the household and in wider society, giving women votes and endless changes. It has transformed the way we live.’

Finally, I ask whether he thinks economics is a moral pursuit. Chang’s starting point seems to be that economic policies can make the world better. ‘Moral dilemmas are unavoidable,’ he says as I signal for the bill. ‘Don’t forget that, at least in this country, economics used to be a branch of moral philosophy. Adam Smith, Karl Marx, Joseph Schumpeter – they’re not just writing about economics, but about politics and culture and society and morality.’ He drains his cup. ‘How has this wonderful subject we call economics become so narrow-minded? I find that really sad.’

Is the history of economics economics?

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There is a review of my just published Defending the History of Economic Thought on the History of Economics website written by Marie Duggan. She didn’t quite get it but she got much of what matters. But I cannot help myself so have written this response:

I am grateful for Marie Duggan’s timely review of my Defending the History of Economic Thought and while I don’t think she quite conveys the urgency that went into its writing I think she conveys much of what the book is about. But if I may, I would like to supplement what she wrote.

The central question addressed by the book is this: should the history of economic thought be classified as part of economics? That is, when someone is undertaking research into some aspect of HET, is their work part of the study of economics or is it something else?

Here is the supposed parallel. When someone studies the history of physics, they are not classified as physicists. When someone studies the history of chemistry, they are not classified as chemists. So the argument has been, that when someone studies or writes on the history of economics, they are not economists, but are perhaps philosophers of science or historians. Therefore the history of economic thought should be removed from the economics classification and be placed somewhere else amongst the humanities for example.

Does this matter? I posted a note a few months back on the OECD’s redesign of its Frascati Manual which must seem to most people on this site as of absolutely no relevance to them in any way. In the manual at present, economics is classified as a social science while the history of economics is classified as part of the humanities. That is, the two areas are completely distinct with no overlap of any significance. Does that sound right to you? It doesn’t to me.

We here in Australia wrote a submission to the OECD, a submission which was endorsed by a number of other societies. We have in this way established a position that will need to be taken into account by those who are redesigning the manual and which will also provide the basis for a response if the new manual continues with the same structural division found at present.

I therefore wrote the book to explain just how precarious the History of Economic Thought is. The review only discusses our lobbying efforts with the Australian Bureau in 2007. It surprisingly ignores the more important of these lobbying efforts which was with the European Research Council in 2011. In Australia we were able to persuade the ABS not to make the change. In Europe, the change was made. The ERC removed HET from the economics classification. The effort was therefore devoted to asking the ERC to reverse a decision that had already been made which was ultimately successful.

This is from the original ERC decision. The concern referred to – our concern – is that HET would be removed from the economics classification:

“Addressing your concern, “history of economics” is divided between SH1 and SH6 (“The study of the human past: archaeology, history and memory”).”

If you would like to know what happened both before and after that decision, you will have to read the book. But if you think that you, as a historian of economic thought, are an economist undertaking economics work, try explaining that to your head of department when the official classification has you listed as working in an area described as “the study of the human past: archaeology, history and memory” (and in Australia the classification would have been, “History, Archaeology, Religion and Philosophy”). And to the extent that you could get funding for your work, these would be the panels you would need to apply to.

These, moreover, are not battles won. These are battles we remain in the midst of. Right now, even as I write, there is an attempt being made here in Australia to reclassify History of Political Economy from its current position as an A*-journal, which is our highest classification, to B-level, which is our third tier. The Journal of the History of Economic Thought has already gone from an A to B. This is not happenstance, this is deliberate and there are economists who favour this change. But the effect is obvious. There is a restricted academic reward in pursuing the study of HET. Do something else instead. You are wasting your time with these historical studies of dead economists of the past.

The reviewer says that I have invented straw men opponents of HET. Would that were the case. The history of economic thought has enemies. If HET is removed from the economics classification, it won’t be by accident.

The intent of the book was therefore to explain, as I had done in submissions to the ABS and ERC, why historians of economics are intimately involved in the development of economic theory. It’s not a subject undertaken by or read by non-economists. This is a specialist area in which economists write for other economists. We as economists orient ourselves and our theories through its historical development. That’s why the book is unlike any other on the subject. Most discussions on why study HET are about why individual economists might benefit individually. This book is about why economic theory is improved where economists know their subject’s history and where there are historians of economics to bring economists of the past into contemporary debates.

Most importantly, what the reviewer noted was this: “if colleagues or deans start taking potshots at HET (or any subfield that you hold dear), take a deep breath, and read Chapter 5 for some sound tactical advice.” The book is about alerting historians of economic thought to our present dangers and providing just the tactical advice she discusses. We are at the cliff’s edge. This book is written both to alert historians of economics about the dangers we face and to provide some suggestions on how we deal with this very great problem.

And while this is slightly off topic, my own favourite chapter of the book, but the reviewer’s least favourite, was on how to teach the history of economic thought. Where she writes, “Kates suggests a student in HET compare Mankiw’s 2013 textbook with one written a hundred years ago (Taylor 1913)”, my point was not that they be compared – I wouldn’t read Mankiw or any modern text in an HET class – but that students be asked to read actual mainstream introductory texts of previous eras, such as Taylor (1913) or McCullogh (1825) or even Samuelson (1948). If you would like to get an accurate sense of how economists in the past thought about economic issues I cannot think of a better way to do it.

Making economists better economists

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The Economist has an editorial on the need to find new ways to teach economics. That may be a polite way for them to edge back from their wholehearted support for Keynesian demand management. This is how their editorial, titled “Keynes’s new heirs”, begins:

FOR economists 2008 was a nightmare. The people who teach and research the discipline mocked by Thomas Carlyle, a 19th-century polemicist, as ‘the dismal science’, not only failed to spot the precipice, many forecast exactly the opposite—a tranquil stability they called the ‘great moderation’. While the global economy is slowly healing, the subject is still in a state of flux, with students eager to learn what went wrong, but frustrated by what they are taught.

Alas, The Economist doesn’t get it and given its DNA-level Keynesian mentality may never get it. Anyone who can write the following is so far from having understood the last five years that you have to wonder where they have been:

Many think economic history should be more widely taught, citing the fact that Ben Bernanke’s Federal Reserve, influenced by his knowledge of the Great Depression and of Japan’s slump in the 1990s, outperformed rich-world peers.

If the management of the American economy is the best there is, an example to us all, even with the US experiencing the worst recovery since the Great Depression itself, you do have to wonder just how off the mark the folks at The Economist are. If they are really looking for some guidance on how economics should be taught, I have just the course for them. Alas, they don’t get it and are never likely to.

But as for teaching Economic History, I am all for that, but even more important would be teaching the History of Economic Thought. A bit of cross fertilisation with the ideas of economists from the past would go a long way to helping improve our stock of economists. If we keep sending them through the same dull texts and having our PhD students do nothing but statistical manipulation, the possibility of actually breeding a better class of economist will remain remote.

[My thanks to Jimmy for sending me the article from The Economist]

The menace of low rates of interest

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Here is the text:

The Reserve Bank of Australia recently lowered its economic growth estimate for the upcoming calendar year to 2 per cent to 3 per cent from an August forecast of 2.5 per cent to 3.5 per cent.

It has cut interest rates eight times over the past two years in an attempt to boost spending to help ease the country’s transition to a less mining-dependent economy as a long resources boom cools.

As they tell it, the fall in growth rates is in spite of the fall in interest rates. As I tell it, the fall in growth rates is because of the fall in interest rates.

Low interest rates are not a good thing as I explain to my classes. Pull them down at the height of a panic but the rest of the time they should be kept relatively tight to ensure our savings are directed to their most productive users. You can’t get a recovery based on lowering rates. It’s from the same Keynesian stable that believes that economies are made to grow from the demand side.

Half way there

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Yesterday I discussed a comment on the History of Economics website about the growing need to be wary about Keynesian economics and today there’s an article at the Wall Street Journal about the same thing, this one titled, Worse than Obamacare which it is. Let me pull out two bits before I get to my main point:

In February 2009, he got $831 billion of stimulus spending. Not even seismographs can detect the results. Every speech he outputs about “middle-class folks” offers them the same solutions: more public spending on education, on public infrastructure projects and, even now, on alternative energy. As he tirelessly repeats what remain promises, the Labor Department’s monthly unemployment-rate announcement on Friday mornings has become a day of dread.

No one any longer expects an upturn in the American economy. Long, slow and tortured is now the way things are. And finally people are getting around to thinking that it may well be Keynesian theory that is in itself the problem:

You know the theory here: Spend a public dollar and you get $1.50 of economic output. It hasn’t happened, but Barack Obama is gonna crank his old Keynesian Multiplier, created during the 1930s in the era of the Hupmobile, until it sputters to life.

Well, you’ve been hearing from me from the start that it was never going to work and for some reason it has taken five years for the penny to drop. It was never going to work because the underlying Keynesian theory is false from surface to core. But it’s only obvious if you understand the economics that existed before Keynesian economics entered the scene and return to the specific proposition that Keynes derailed.

There are others who think they can see Keynesian economics off the lot through some other means but I don’t believe it. It is only if you understand the classical theory of the cycle and Say’s Law can you make sense of why the stimulus did not achieve a single one of its aims. Stimulating demand cannot work because you cannot stimulate demand by increased spending on anything at all. You can only increase economic activity through increases in value adding supply, the very thing no government can ever do. What governments do is waste and the effect is to deaden the economy, and the more waste there is, the deader it becomes.

In seeing that Keynes must go we are only half way there. The other half is to restore the economic theory that Keynesian economics replaced.

[My thanks to Julie for the WSJ link.]

Keynesian economics is on the way out

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A neat and sensible assessment of where Keynesian economic theory is today. I suspect there are many who think like this but are reluctant to say so in public. This is accurate and to the point. It comes from the History of Economics discussion website and was posted by Doug MacKenzie.

The historical facts of this debate, and of the policy itself, are quite clear, and it does not simply boil down to proving that the multiplier is (or is not) zero.

1. Keynes himself recognized (in the GT) that the multiplier is not stable and can be ineffective. To quote Keynes:

“It would seem (following Mr. Kahn) that the following are likely in a modern community to be the factors which it is most important not to overlook (though the first two will not be fully intelligible until after Book IV. has been reached):

(i) The method of financing the policy and the increased working cash, required by- the increased employment and the associated rise of prices, may have the effect of increasing the rate of interest and so retarding investment in other directions, unless the monetary authority takes steps to the contrary; whilst, at the same time, the increased cost of capital goods will reduce their marginal efficiency to the private investor, and this will require an actual fall in the rate of interest to offset it.

(ii) With the confused psychology which often prevails, the Government programme may, through its effect on “confidence”, increase liquidity-preference or diminish the marginal efficiency of capital, which, again, may retard other investment unless measures are taken to offset it.

(iii) In an open system with foreign-trade relations, some part of the multiplier of the increased investment will accrue to the benefit of employment in foreign countries, since a proportion of the increased consumption will diminish our own country’s favourable foreign balance; so that, if we consider only the effect on domestic employment as distinct from world employment, we must diminish the full figure of the multiplier. On the other hand our own country may recover a portion of this leakage through favourable repercussions due to the action of the multiplier in the foreign country in increasing its economic activity.

Furthermore, if we are considering changes of a substantial amount, we have to allow for a progressive change in the marginal propensity to consume, as the position of the margin is gradually shifted; and hence in the multiplier. The marginal propensity to consume is not constant for all levels of employment, and it is probable that there will be, as a rule, a tendency for it to diminish as employment increases; when real income increases, that is to say, the community will wish to consume a gradually diminishing proportion of it.” JMK chapter 10 GTEIM

So one can admit to possibilities that planned saving and planned investment don’t always line up correctly when implemented, without concluding that fiscal policy works in a reliable and useful fashion. Crowding out effects are real and Keynes knew all about it.

2. There is zero evidence of Lerner’s functional finance working as planned. Politicians have most definitely not run surpluses during booms, but have accumulated debt. Buchanan and Wagner have provided plausible explanations of debt-bias in policy.

3. Friedman’s Long and Variable Lags argument has stood the test of time, Keynesians have no substantive answer to this challenge. Given the length of a ‘normal recession’ politicians in a democracy are not at all likely to implement appropriate fiscal policy in a timely fashion.

4. Estimates of the actual fiscal multiplier come in at very low levels anyway. Data indicates that fiscal policy has little or no effect. Barro leans towards saying its no effect (see here), Krugman says there is still a small multiplier effect. Nobody finds the strong and reliable effect that Keynesians originally hoped to use in “fine tuning the economy”.

The 2008-2013 experience is highly relevant because the slump has been long enough to negate the Long and Variable Lags issue – politicians have had more than enough time to act, they have acted with historic monetary and fiscal “stimulus” and the effects were less than originally predicted. After the fact speculation by Mark Zandi that things could have been worse and by Krugman that the deficits should have been larger are not based on hard statistical facts, but are the product of faith and shaky analysis.

I don’t see how anyone can look at relevant theory and the data both and walk away thinking that there is a strong case for activist fiscal policy. It has not worked. The overall case is at best very weak.

D.W. MacKenzie, Ph.D.
Carroll College, Helena MT

The US statistical agency faked the jobs report just before the 2012 election

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That Obama’s election victory in 2012 was a stolen election must be obvious to Mitt Romney and others in the Republican hierarchy but what are they going to do? The IRS scandal of itself diverted enormous amounts of both time and money away from the political process. There are then the uncountable number of fraudulent voters which is inevitable in a system where everyone is capable of voting without any form of identification, not even evidence that one is a citizen. The laughable 59 voting booths in Philadelphia where not a single Romney vote was recorded, not even by accident, is an example of what happens in parts of America where the Democrats who count the votes are never going to be challenged by anyone from the other side, not even when there are more votes cast than there are eligible voters on the voters’ list. And these are merely efforts to steal votes although there are other ways in which the numbers were affected but that’s for another time. The US is dangerously close to becoming a one-party state, at least at the Federal level, and the Democrats are the party. The following tale therefore enters as one more strand in an immense effort to undermine the Republican vote and artificially strengthen the Democrats.

This is, in fact, such a big story, but with all the other stories, as big as this one is it’s small. The article beats around the bush but the central point eventually emerges many paras down. Even more weirdly, this is an “exclusive” so as a general news item that will go across the country there is no probability at all. This is an interview with a Bureau of Census employee who was found to have faked the unemployment data that were published during the three months leading up to the US election in November 2012.

The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census. . . .

‘It was a phone conversation — I forget the exact words — but it was, “Go ahead and fabricate it” to make it what it was,’ Buckmon told me.

And here are the paras leading up to that para:

In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.

The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated.

And the Census Bureau, which does the unemployment survey, knew it.

Just two years before the presidential election, the Census Bureau had caught an employee fabricating data that went into the unemployment report, which is one of the most closely watched measures of the economy.

And a knowledgeable source says the deception went beyond that one employee — that it escalated at the time President Obama was seeking reelection in 2012 and continues today.

‘He’s not the only one,’ said the source, who asked to remain anonymous for now but is willing to talk with the Labor Department and Congress if asked.

The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census.

Don’t tell me the election wasn’t stolen. The system is as corrupt as it has ever been. The methods perfected in Chicago have gone national and are unlikely to be contained any time soon.

And once you know this about their unemployment date, then you also know there is not a number published by the American statistical agency, not a one, that you could guarantee for yourself that it is not an advocacy number, crafted to provide a picture but not an accurate reflection of the data collected. Post modern statistics. The numbers are whatever you need them to be, or at least they are if you are a Democrat.