THE ENTERPRISE
LIES, DAMNED LIES & STATISTICS
According to British ex-Prime Minister Benjamin Disraeli (repeated by Mark Twain), these are three common untruths we encounter in our daily life--and business. Our government lies to us, both intentionally and unintentionally. We suspect their misdeeds when their motives are in question. The worst part is when the government's obsolete metrics create and publish statistics that are profoundly misleading. As Will Rogers once said, "It ain't what you don't know that gets you; it's what you think you know that ain't so."
MONETARY POLICY, LOW GDP GROWTH, NO SAVINGS, GOVERNMENT'S TERRIBLE DEBT LOAD
Lie, lie, lie and lie. Monetary policy, once believed to be the primary determinant of how our economy was driven has less and less effect than ever--and globalization is reducing the effect further every day. GDP growth is distorted by the failure to measure the value of intellectual property, and even then the so called "bubble" of the 1990's was a lower growth period than the 1960's and 1980's spurts. GDP growth measures are woefully out of touch with today's knowledge era. Americans don't save--at least not the way the government statistics measure savings, but the wealth of Americans as a whole keeps growing. How? The savings comes in different means of building wealth. Debt is bad--or so we are told. The terrible national debt is a curse we are going to pass on to our grandchildren. The debt now is less as a percentage of GDP than at many times in the past--including most of the 1980's and 1990's. And for those who understand that some public debt is actually a stimulus to our economy--it may actually be too low, instead of too high. Four in a row--all wrong.
BLOWS YOUR MIND, DOESN'T IT?
While you are shaking your head side to side about the preceding paragraph, you can check this out: http://online.wsj.com/article/SB116579723019846033-search.html?KEYWORDS=Five+macroeconomic+myths&COLLECTION=wsjie/6month).
Here is another one. The so called "ever-widening divide" between the rich and the poor in the US is another lie--or at least a distortion caused by faulty analyses that reach a conclusion and then repeat that conclusion so many times it "becomes the truth." The study that showed a huge divide and the growth in the percentage of wealth held by the top 1% of Americans is badly flawed. In fact, the true analysis shows that nothing of the sort has happened. The reporting and the reports included in the calculation were flawed. Other than business income (shifted there for tax reporting purposes) the top 1% of the US population had the same share of personal income (7.2%) in 2002, 2004, and 1988! Read the analysis for yourself and see: http://online.wsj.com/article/SB116607104815649971-search.html?KEYWORDS=Alan+Reynolds&COLLECTION=wsjie/6month
SO WHAT SHOULD WE BELIEVE?
Maybe we should believe something that isn't subject to revision next month, next quarter, or by the next group of analysts. Here's a great list, from columnist James B. Stewart (who writes for Smart Money). He attributes them to his Dad, who recently died, at the age of 80, and he was on his way to work--doing something he loved.
1) Enjoy what you do. 2) Play to win. 3) Be an optimist. 4) Learn from your mistakes. 5) Cultivate a sense of humor. 6) Don't follow the herd. Now there is a list to believe in.
This sort of reminds me of Lou Holtz's comment: "A person really only needs 4 thing in life: Something to do; someone to love; something to hope for; and someone to look up to."
These kinds of timeless truths transcend the statistics and analysis of the government statisticians and the political /financial analysts. Sometimes we need to believe in things that are worthy of believing in.
BELIEVE IN THE USA & THE BRAVE FOLKS WHO PROTECT OUR FREEDOMS & PRAY FOR THEM
This holiday season, we should take a moment and think of those who sacrifice so we can enjoy the good life. Below IS a web address (and for those receiving this via email, an attachment showing a special Anheuser-Busch commercial. The themes are similar. Please watch them--and feel moved and proud. I sure did.
Happy Holidays
John
(THE ENTERPRISE WILL TAKE A COUPLE WEEKS OFF FOR THE HOLIDAYS--MERRY CHRISTMAS AND HAPPY NEW YEAR TO ALL.)
Turn the volume up on this one.
http://www.iwo.com/heroes.htm
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