Wednesday, January 21, 2004
"Black Hole" Found in US Economy
Hiding costs and "energy eating" cycle started in
Reagan/Bush I Era
Contact: Dan Spillane DanSLegal@aol.com Citizens for Corporate
Accountability 410 Denny Way #229 Seattle, WA 98122 (206)
860-2858
(Update 18, 01/21/04, Notes Dec 2003 CPI fuel oil cost
vanishing, editorial)
(SEATTLE) 01/06/04 - In a troubling sign that accounting
problems have grown beyond corporate balance sheets, two of
the main economic gauges used by Wall Street, banks, and in
the calculation of Social Security payments have been found to
contain serious problems. The makeup or "weightings"
of the gauges have been set and modified recently so they hide
real inflation. Also, a complicated "circular"
cycle--much like a "black hole"--has been found
within one of the gauges, which not only places the US
financial system at risk, but "eats energy",
resulting in dramatic and permanent increases in demand for
energy, at a time when our soldiers are dying overseas because
of energy-related tensions (1) (2) (3).
The problems were identified in the Consumer Price Index(CPI)
and Producer Price Index(PPI), by examining contents of tables
provided by the US Bureau of Labor Statistics(BLS), and
comparing weightings for the most recent years against each
other, and against independent statistics which account for
the same costs.
According to official BLS tables, in the energy category,
several changes were put in to reduce energy cost weightings
in the indices recently, including one which reduces
importance of “housing fuels and utilities”in the overall CPI
index by a whopping ten percent(4), and another which pushes
winter energy cost calculations into summer(5). Also, in the
housing category, the weighting of “hotels and motels” was
increased (against the backdrop of post-Sept 11th falls in
hotel costs), while at the same time, “housing at school” got
less weighting. In the education category, the weighting of
college, elementary tuition, and childcare was recently
reduced.
As recently as December 2003, a 2.1 percent increase in the
CPI for fuel oil cost mysteriously vanished in a seasonal
adjustment--and was instead reported as 0.6 percent(12).
Going back many years, the costs of running large
energy-consuming homes (like categories related to energy,
gas, and utilities for the home) have been slowly and
mysteriously removed from the CPI 9
(snip)
Disturbingly, in the most recent table which rates relative
importance of health insurance, cost is placed below other
categories such as “Recreational Reading Materials”, “Pets”,
and “Toys.” Health insurance accounting for the most recent
table is off by a significant factor of fifteen--and is set to
a level below that in 1995 (6).
To Moderators--Hope this is OK .
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