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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (46290)	3/14/2000 6:45:00 AM
From: long-gone	Read Replies (1) \| Respond to of 94695

Along the lines of election year: Economist: Inflation Rate Is Double Official Number Ryan Troup and Christopher Ruddy March 14, 2000 Jan. 20, 1993, and Bill Clinton was not president 24 hours when he saw James Dale Davidson at one of several Washington Inaugural Balls. Clinton quickly waved past the salutations and congratulations. "Jim," he said, "You may able to help me." Davidson, a Clinton campaign donor, a financial writer, then head of the National Taxpayers Union and someone who had known Clinton for years from annual retreats at the Hilton Head Renaissance weekends, nodded with agreement. "I think the Bush people were cooking the economic numbers in the months before the election," Clinton said, continuing, "Do you think you could put together a report for me on how they did it?" Davidson agreed but the thought went racing through his mind, "This man?s not president for one day and he?s already trying to figure out how to fix the books." Since his inauguration Clinton has survived an avalanche of scandals that would have crushed any other mortal. One factor cited by both Clinton critics and friends has been the booming U.S. economy and the longest bull market in the history of the world. "It?s the economy, stupid!" was the Carville-inspired slogan of the Clinton-Gore ?92 campaign. The slogan has become the White House mantra for two terms. Federal Reserve Plays Key Role Since World War II the chairman of the Federal Reserve has had an increasing influence over the U.S. economy. The chairman and the rest of the Federal Reserve Board set U.S. monetary policy ? independently of any administration. After the stagflation years of the 1970s, the Federal Reserve has watched for any signs of inflation. Using interest rates as a spigot, the Fed has turned and tightened the spigot by raising or lowering interest rates. So far so good. Chairman Greenspan, during almost eight years of Clinton-Gore, has kept the spigot loose. Though the economy has been at warp drive, there has never been any sign of rising inflation. Unemployment, another key number, has been low, but never too low, simply indicating the economy has been at full employment ? or in excellent health. Greenspan?s, and the rest of the Federal Reserve?s, decision-making has been independent ? there is no evidence they have been pressured by the Clinton administration. Still, their decision-making has been based on the statistics provided by the administration. Statistics like the inflation rate, technically called the CPI or consumer price index, are measured by the Bureau of Labor Statistics, an agency of the Department of Labor. Earlier forms of today?s CPI started out in the 1880s as a way to measure the impact of tariffs on goods. Then around 1915 it was used to adjust shipyard workers? salaries to the cost of goods. After World War II, the index was used by auto manufacturers in negotiations with auto workers for wage adjustments. This is why today?s survey is still biased to where automotive plants were located. Statistics Don't Lie ? People Do Mark Twain remarked that "Statistics don?t lie, people do." We may have to revise Twain?s statement to say government agencies lie, too. During the past eight years the Bureau of Labor Statistics has (cont) newsmax.com