The news media often uncritically report federal government national economic indicators, without explaining how they are calculated. Well, it seems Mark Twain was right when he noted (quoting Benjamin Disraeli), “There are three kinds of lies: lies, damned lies, and statistics.” The unsurprising truth, according to John Williams of Shadow Government Statistics (SGS): “Inflation and unemployment reports are understated, while employment and other economic data are overstated, deliberately.”

The government began fudging the numbers during the Reagan administration, although the Clinton administration continued doing it. SGS calculates economic indicators according to the original criteria, so that the real trends become evident.

INFLATION

The Bureau of Labor Statistics (BLS) says the consumer price index indicates inflation is running along at an annual rate of 3.1 percent. Meanwhile, we are stocking up on food staples, fearing price increases and shortages. Gasoline has reached four dollars a gallon. Well, the BLS calculates “core inflation” by ignoring food and energy prices, and recently changed its methodology for seasonal adjustments. What’s the real inflation rate? Nearly 12 percent.

UNEMPLOYMENT

The official unemployment rate is 5.1 percent according to the BLS. No matter which political party owns the White House, keeping the true numbers of unemployed artificially low boosts the perception of job creation and economic growth. The United States government only keeps you “unemployed” for six months, whether or not you find a job. During the Clinton administration, the BLS stopped counting “discouraged” workers whose unemployment benefits have run out. What’s the real unemployment rate? Around 13 percent.

It’s all part of the dismal economic picture that the government and the news media are doing their best to minimize.

UPDATE: Via DailyKos, Senator John McCain seems as baffled as most Americans.

April 16:
McCain said that Americans perhaps feel they are better off than they were when Bush took office because “millions of jobs have been created” since then. So therefore, McCain said, “You could make an argument that there’s been great progress economically over that period of time”

April 25:
When host Meredith Viera asked McCain whether Americans are “better off, by any means, than we were eight years ago,” McCain replied, “Oh, no. No.”

UPDATE: Analysts predict $10 a gallon gas in the near future. European drivers are already shelling out $9 a gallon.