|CNBC Economists Panel after the Employment Data|
Only perpetual-realist Rick Santelli could see the miss. I sometimes wonder the kind of KoolAid economists drink that turns garbage into beautiful data.
To see what's bothering me, let's take the same total change while allocating the changes differently. Let's just say that the prior two months had remained unadjusted while the latest month was instead reported as 96 thousand for August. Would they had displayed the same sense of accomplishment? While talking about equal total changes, the headline would be much worse.
At some point during their conversation, they even seemed ready to accept a theory that August will be revised up by about 50 thousand next month. First, such is simple speculation. Second, even a speculative 50 thousand in additional payrolls would only take our 96 thousand August up to 146 thousand; which is still a very bad number.
In a nutshell, the employment numbers continue to be bad. Moreover, the economic reporting agencies continue to make the headline numbers look better than reality. They just wait a month before reporting the real number. After all, most people find it hard to read past headlines. Yes, we are witnessing the ugliest pig with the most lipstick in a long time.
I just finished reading a fantastic book about the charismatic revolutionary Che Guevara. What the book left me was an understanding that Che had deep convictions that were wrong on economics while also being quite damaging to the people he tried to help. He spent his whole life unsuccessfully attempting to make his model work. But this was something that no one, including Lenin, Trotsky, Mao or Marx, could make succeed. The inevitable failures made him depressed and later forced him into badly planned battles. In a way, the book depicts a sad story of misguided intentions.
If you are like me, the fact that history brings us plenty of examples of what not-to-do should be enough to keep us from repeating past mistakes.
I can't wait until economic sanity comes back to markets.