THE MORNING RANT: Follow-Up to Post Regarding Reliance on Falsified Government Economic Data; Also ESG Investments Facing Major Outflows

My post this past Monday was titled “Why Do Intelligent People Continue to Rely on Government Data That is Known to Be False?” In it, I discussed the persistently false economic data published by the government, especially the Department of Labor’s inflation and jobs reports, and how intelligent(?) people in positions of authority “make critical decisions based on that data, even though there is a near certainty it will be revised to a less favorable report (or simply proven false) once the headlines become stale.”

Reader TGSam then sent the following from Jim Bianco to my attention, which shows that not only are the Department of Labor’s jobs reports not reliable, but the DOL doesn’t even really put any effort into producing their fraudulent weekly jobs report. It would appear that they pick a round number and just run with it for weeks on end.

Mr. Bianco points out the statistical improbability of there being exactly 212,000 claims for initial unemployment week after week. (The number is always rounded to the nearest thousand, but the likelihood of it being 212k every week is extremely improbable.) He writes:

Below is the number of initial filings for unemployment insurance. How is this statistically possible? Five of the last six weeks, the exact same number. Effectively the same number in the last 11 weeks, except for the holiday weeks (President's Day and Easter).

Consider, The US is a $28 trillion economy. It has 160 million workers. Initial claims for unemployment insurance are state programs, with 50 state rules, hundreds of offices, and 50 websites to file. Weather, seasonality, holidays, and economic vibrations drive the number of people filing claims from week to week. Yet this measure is so stable that it does not vary by even 1,000 applications a week. Just the number of applications incorrectly filled out every week should cause it to vary more than this.

Below is the number of initial filings for unemployment insurance.

How is this statistically possible?

Five of the last six weeks, the exact same number.

Effectively the same number in the last 11 weeks, except for the holiday weeks (President's Day and Easter).
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Consider… pic.twitter.com/vZbWWC7DRr

— Jim Bianco (@biancoresearch) April 18, 2024

A little digging shows that the Department of Labor intentionally empowers it employees to work some statistical magic on the actual (“unadjusted”) jobs figures they have compiled. At the link where the DOL issues its weekly press release announcing the number of new unemployment filings, there is this explanation for the “seasonal adjustment” that has been administered:

C. Seasonal Adjustments and Annual Revisions Over the course of a year, the weekly changes in the levels of initial claims and continued claims undergo regularly occurring fluctuations. These fluctuations may result from seasonal changes in weather, major holidays, the opening and closing of schools, or other similar events. Because these seasonal events follow a more or less regular pattern each year, their influence on the level of a series can be tempered by adjusting for regular seasonal variation. These adjustments make trend and cycle developments easier to spot. At the beginning of each calendar year, the Bureau of Labor Statistics provides the Employment and Training Administration (ETA) with a set of seasonal factors to apply to the unadjusted data during that year. Concurrent with the implementation and release of the new seasonal factors, ETA incorporates revisions to the UI claims historical series caused by updates to the unadjusted data.

As I dove into that website, I saw that the “seasonal adjustment” is actually done every single week, bringing the initial filing report back to the boilerplate 212k number that is constantly being reported.

But again, to Mr. Bianco’s point, even if the seasonal adjustment is done weekly using some mathematical formula that is applied to the unadjusted number, then there should still be some variance from 212k.

It seems rather clear that the “adjusted” figure is just a number pulled out of the air by a DOL employee who can’t be bothered to spend 5 minutes coming up with a new phony number to replace the prior week’s phony number.

Related - a gentleman named Don Harrison, with whom I’ve developed a friendship through mutual friends at the Heartland Institute, sent me the following note in response to the question “Why Do Intelligent People Continue to Rely on Government Data That is Known to Be False?” I found his note to be a terrific essay unto itself.

”I think intelligent people are so often wrong because they ARE intelligent, and because of how their intelligence has come to be nurtured and treated in our modern age. First, people with high IQs are now identified at an early age, and funneled into courses of study that focus on the use and manipulation of symbols, both verbal and mathematical. This gives them a very narrow understanding of the way the world works. In addition, they have been told from an early age how brilliant they are, which teaches them to prize their own thinking above all else. And when they do reach out for another opinion, they almost exclusively deal with people who have similar backgrounds. They have no conception of the implications of William Buckley’s statement that he “would rather be ruled by the first 2,000 people in the telephone directory than by the Harvard University faculty.” A large group of people will have a store of wisdom, intelligence and experience that a smaller coterie of the best and brightest cannot hope to match. The most distinguishing shortcoming of the intelligentsia is not near-sightedness, progressive politics or an addiction to Starbucks; it is hubris. They don’t know what they don’t know.

Bottom line: high IQs that are nurtured without an acquaintance with a breadth of experience result in a kind of sterile, and dangerous, stupidity.”

Thank you, Don. Interestingly, Mr. Harrison’s passion and area of expertise is anti-ESG investing. He was a featured guest last month with Jim Lakely and the Heartland gang on their weekly “Climate Realism” broadcast, discussing the topic of “Is ESG on the Outs?” which can be seen at this link if you’re so inclined.

Coincidentally, this heartwarming story about the backlash to ESG investing was just published yesterday:

“US Fund Managers With ESG Mandates Have Worst-Ever Outflows” [Bloomberg – 4/25/2024]

US fund managers suffered their worst-ever quarter for ESG-focused products as the pace of client redemptions intensified. Client withdrawals from US funds targeting environmental, social and governance goals reached $8.8 billion in the first three months of 2024, according to fresh data compiled by Morningstar Inc.

The scale of redemptions from US ESG funds dragged down global inflows, which were a modest $900 million in the first quarter, Morningstar said.

Victory in the culture wars will not occur in Congress, or in the courts, or most anywhere at the federal level. But we can deliver resounding blows to the left in local elections and in how we use our money.

“Sustainable funds have been facing many headwinds in the past couple of years, including elevated energy prices, high interest rates and an ESG backlash in the US,” said Hortense Bioy, global director of sustainability research at Morningstar.

Millions of us using our wallets as weapons are having an impact and causing pain to the woke left. Don’t let up.

Have a great weekend.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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