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Mark Twain’s coined phrase “there are lies, damn lies, and statistics” has the privilege of being used far too often and not nearly enough. The saying is invoked by people who see a genius in the mirror but are much too dense for their own good. They are the ones who feign skepticism while eagerly accepting whatever empirical evidence bolsters their own dogma.

These perpetrators of the crime against intellect are by and large statists, namely economists. They spend their days waiting to pounce on detractors on the first blip of data that justifies their collectivism. Unemployment inched up? Need more government stimulus! Unemployment falls slightly? Thank Heavens Washington is spending so much money to put people to work!

The key here is that any piece of data can be taken and spun into a web narrative to fit an agenda. Government-gathered statistics often provide a potpourri of easily-moldable fictions. And because the facts and figures come straight from the state’s mouth, they are often taken as Gospel. Anyone who thinks otherwise – that bureaucrats might have their own motives for possibly fudging information – is smeared as a tinfoil-chewing crank in need of immediate institutionalization.

The exception is when news breaks that some rogue public servant doctored stats for pure political purposes.

The New York Post, a paper not exactly known for its pride in accurate reporting, recentlyclaimed the Census Bureau was aware manipulation of the employment report was going on in the run-up to the 2012 election. Just a few months out from when America put Sugar Daddy Obama back in the Oval Office, the national unemployment rate happened to fall from 8.1% to 7.8%. It wasn’t all that significant of a drop, but the talking heads sure made it sound like the Second Coming. The Post – which is relying on an unknown but “reliable source” – claims the figure was intentionally faked.

It goes without saying that unfounded claims based on a mysterious origin aren’t the most credible of sources. Even the everyday man on the street is wary about unnamed sources of information. He wants some kind of supporting evidence that isn’t just hearsay.

The Post report may be all smoke and no gun, but it’s not far from the realm of possibilities. Public sector workers have every incentive to keep their layabout jobs. In 2010, Census Department employee Julius Buckmon was fired for fudging results. He claims to have been given orders from higher-ups.

It also doesn’t help that the method the government uses to measure unemployment is already lackluster enough. Workers at the Bureau of Labor Statistics simply call up households and inquire about the inhabitants’ working situation. They don’t hook respondents up to a polygraph machine. The whole thing is based on the trustworthiness of the average schmuck. And even when the data is gathered the least severe measure of total employment, known as U3, is used as the headline number in media reports. The measuredoes not account for discouraged workers, who are tossed into the U6 bracket along with part-time workers seeking full-time employment. So the biochemist washing dishes at his local diner while scouring the classifieds each morning for a new position is left out. Since the beginning of America’s economic doldrums five years ago, the U6 unemployment rate has failed to drop below double-digits. But by highlighting only the “headline” number, the President and his press apparatchiks shine a light onto an otherwise dark employment picture.

Government manipulation of data is nothing new historically. Stalin famously had Western economists fooled for decades with erroneous reports on economic growth in his communist paradise. In 1989, Paul Samuelson, arguably the most influential academic economist of the late twentieth century, wrote in his famed textbook the “Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.” Two years later, the Union of Soviet Socialist Republics disintegrated. No mea culpa was ever issued.

Despite the philosophical shortcomings of pure empiricism, the great breadth of society has a fetish for data. The reason is simple. Numbers and statistics don’t just save us from having to make coherent arguments, they make it easy to not have to think very hard.

That’s the problem with radical scientism and empirics in general: the notion that logic is not needed to interpret information to fully understand the surrounding world. Stats and figures are malleable. They can be used to make the case for laissez faire, statism, interventionism, or whatever “ism” strikes your fancy.

Data is useless without a sound theory to interpret it. Otherwise, it may as well be a sheet of randomized numbers. Yet the empirical positivists are quick to dismiss the idea that things can be proved without observable evidence. As the late Murray Rothbard asked in his essay “In Defense of Extreme Apriorism”:

“what is the vaunted ‘evidence’ of the empiricists but the bringing of a hitherto obscure proposition into evident view?”

An evidence-only approach to the dismal science is destined to die on the mantle of popular methodology. Whatever the data may show, it can be easily explained away in empty pontificating and counterfactual hypothesizing. The adherents to scientism are left babbling in their own incoherent rationale. Basically, no amount of factual confirmation will convince the true believers of positive empiricism. They talk a good game of sensory verification, but have an excuse for their own canon under each sleeve.

It’s not paranoid gibberish to assume government bureaucrats would juice the numbers to make sure their preferred knight in shining armor stays in the White House. As much as Nancy Pelosi, Paul Krugman, and the New York Times editorial board would like to pretend, public servants are not boy scouts donned with merit badges as far as the eye can see. They are just as selfish and conniving as Wall Street traders.

Here is the most important lesson not taught in government 101: politicians and their over-paid henchmen lie. They’ll sell you lemon, break the warranty, set the bank loose on you, and then demand your undying loyalty. Everything they say should be taken with a grain of FDA-approved salt, including monthly data reports.

James E. Miller is editor-in-chief of the Ludwig von Mises Institute of Canada. Send him mail

Conservatism and the Debt Ceiling – Ludwig von Mises Institute Canada

October 18, 2013 2:26 pm / Leave a comment

Conservatism and the Debt Ceiling – Ludwig von Mises Institute Canada. (source)

I am not very good at self-identifying. When asked of my political affiliation, I waffle between libertarian, Rothbardian, or just straight out anarchist. Perhaps the best answer is “none.” Explaining the immoral nature of the state is too big of a feat for casual conversation. Regardless of my anti-state views, there is a soft spot for conservatism somewhere in my inner political makeup. And when I reference conservatism, I mean real conservatism; not its bastard third cousin known as neoconservatism that was birthed by Trotsky.

Hayek’s critique notwithstanding, libertarianism and conservatism overlap slightly when it comes to public policy. Both recognize the tendency of the state to become excessive with authority. The fundamentality of law is paramount in both viewpoints. The virtue of temperance is held in high regard for followers of both Rand and Burke. At times, there is conflict on the boundary of rights whether the greater good is worth violating the individual liberty of some. But fiscal issues are where the conservative and libertarian find the most common ground.

As the United States government remains partially shut down, Washington is hurtling toward its statutory debt limit of $16.7 trillion. Come sometime this week, Congress will either have to pass an extension of the cap or no more money can be borrowed. Some writers of the conservative bent have expressed worry there will be a default on the national debt if a couple of ideological Congressmen keep getting their way. Rod Dreherclaims a small band of Tea Party Republicans are using the “prospect of a sovereign default as political leverage.” Commentary editor John Podhoretz calls the strategy (if there were really a tactic of shorting bondholders) “suicide of the right.” Ross Douthat, the estimable token conservative of the New York Times, labels the whole gambit “blackmail” and “much dumber and more dangerous” than the debt limit acquiescence during Reagan’s second presidential term.

These critics, for all their esteemed insights, are mistaken in their belief of the infallibility of Uncle Sam’s credit. That the thieves in Washington collect enough in tax ransom to make interest payments is not considered. Neither is the inconvenient truth that buyers of government securities are not engaging in a riskless activity – they too made an investment and thereby accept the possible consequences involved. The state’s inherent ability to fleece money for operation is limited by decree and the impending furor of a plucked populace. Placing undeniable confidence in the full faith and credit of a government is nothing but ignorant reverence to force.

That aside, Washington will still not default on owners of its bonds. Talk of such an event is downright scaremongering. President Obama and the media are leading the chorus of fearfulness in this regard, and some otherwise sharp fellows are falling under the siren song. It’s unfortunate yet understandable. The failure to pay creditors in full would be a painful blow to America’s prestige. It would also hold ramifications for the global economy if investors began a fire sale of U.S. Treasuries. Nevertheless, that hypothetical is far from realistic in the immediate future.

That doesn’t make defaulting an impossibility however. For the superior economic productivity within its borders, the U.S. government is gifted with a sizeable tax base. Still, the politicians in charge can’t help but borrow close to .40 cents of every dollar spent – and that’s just on-the-books accounting. In reality, Washington is in possession of $222 trillion in unfunded liabilities largely due to entitlement programs. Such a number is so astronomical that default is already in the cards. The question is when it will occur. Like most things in life, the medicine can be swallowed now or later down the road.

The conservative case against another raise in the debt ceiling is not grounded in politics. It is made by the prudential character of anyone who firmly understands that well-being cannot flourish by using a disease as a cure. As Russell Kirk wrote,

A conservative is not, by definition, a selfish or a stupid person; instead, he is a person who believes there is something in our life worth saving.

Debt on debt is no way to run a country, a household, or an individual bank account. By borrowing in seeming perpetuity, you preserve the good times. But it only lasts as long as your credit rating remains intact. There is always the appearance of stability in a drunk who maintains his level of intoxication. As long as the bottles of bottom-shelf whiskey keep coming, the inebriated will not have to go through the painful correction of sobering up. Not many would disagree that the comedown after a party is a necessary part of existence. But when it comes to debt, the circumstances apparently change.

The virus of progressivism, at its essence, is the belief that paradise can be created on Earth. In practice, it’s presented in a variety of efforts that attempt to hurdle the natural barriers of life that keep us from being gods. The minimum wage, hate crime prohibition, public housing, income redistribution, and tax funding for welfare are all byproducts of an ideology that thinks it can it simply wipe away the laws that govern the world. What is not realized, or is willfully ignored, is the unseen, pernicious results of all government policy. Public debt brings the pretense of prosperity while avoiding the true cost. There are several economists who assert that government liabilities don’t really matter because, in the end, we owe it to ourselves. As Rothbard wrote back in the heyday of supply-side economics,

…at least, conservatives were astute enough to realize that it made an enormous amount of difference whether — slicing through the obfuscatory collective nouns — one is a member of the “we” (the burdened taxpayer) or of the “ourselves” (those living off the proceeds of taxation).

Since taxation is always and everywhere theft, the only justified approach to government debt is total repudiation. The money that passes through the state’s hand to the creditor is tainted with the mark of crime. The correction would be tough, but the world would notend in flames. Another, less radical path is simply for the U.S. Treasury to cancel its debtheld at the Federal Reserve. Since the Fed cannot go bankrupt due to the recent adoption of a questionable accounting scheme, both entities would pretty much keep to their respective gimmicks to outrun an inherent insolvency.

The whole fulcrum of the bloated American state is beyond ready for a radical deconstruction. The same goes for most nation-states in the West. The continual borrowing, serviced indiscreetly by an accommodating central bank, has made an entirety of the populace fat and happy off of debt. Large pools of capital continue to be depleted with little refreshment. In 2008, there was a massive correction in this wholly destructive process, but it was averted through government intervention. The same easy credit policy that fueled the asset bubble-and-burst is being replicated at an unprecedented rated.

This is no realistic method for operating any institution. Something has to give eventually. The conservative will often pride himself on taking a realistic view on affairs. Refusing to see the train wreck that is Washington finances means putting one’s head in the sand and hoping for sunshine and lollipops. It’s the polar opposite of a sustainable yet measured outlook toward good living.

Any conservative who places high value on civil society over the intrusion of government should balk at the prospect of a higher debt load. It makes certain that the ruling political class will not cease in their effort to infiltrate private life. Unfortunately it appears as if some otherwise sharp minds have fallen prey to the liberal device of alarmism. Keeping the status quo is a nice goal if the present state of affairs is bucolic enough. But with an increasingly militarized domestic police presence combined with a massive surveillance apparatus that has made privacy into an anachronism, the times are far from serene. Taking a hardline on the national debt would go far in reducing both of these highly viable threats to peace.