Dr. Paul Craig Roberts: The Virtual Economic Recovery!

Since mid 2009, the US has been enjoying a virtual recovery, courtesy of a rigged inflation measure that understates inflation. The financial Presstitutes spoon out the governments propaganda that prices are rising less than 2%. But anyone who purchases food, fuel, medical care or anything else knows that low inflation is no more real than Saddam Hussein's weapons of mass destruction or Ghadhafi's alleged attacks on Libyan protesters or Iran's nuclear weapons. Everything is a lie to serve the power brokers. During the Clinton administration, Republican economists pushed through a change in the way the CPI is measured in order to save money by depriving Social Security retirees of their cost of living adjustment. Previously, the CPI measured the change in the cost of a constant standard of living. The new measure assumes that consumers adjust to price increases by lowering their standard of living by substituting lower quality, lower priced items. If the price, for example, of New York strip steak goes up, consumers are assumed to substitute the lower quality round steak. In other words, the new measure of inflation keeps inflation down by reflecting a lowered standard of living. Statistician John Williams, who closely follows the collecting and reporting of official US economic statistics, reports that consumer inflation, as measured by the 1990 official government methodology has been running at about 9%. The 9% figure is more consistent with people's experience in grocery stores. Officially, the recession that began in 2007 ended in June 2009 after 18 months, making the Bush Recession the longest recession since World War II. However, John Williams says that the recession has not ended. He says that only the GDP reporting, distorted by an erroneous measurement of inflation, shows a recovery. Other, more reliable measures of economic activity, show no recovery. Williams reports that the economy began turning down in 2006, falling lower in 2008 and 2009, and bottom bouncing ever since.