The Return Of The Tupenny Upright?

That erudite commentator on business and economics and Cappo di Tutti Cappi, Tony Soprano once said to one of his sidekicks, “In any recession which businesses are least affected? Prostitution, gambling and organised crime.”

Our political leaders, in Britain, Europe and the USA may be telling us the recession is over and recovery is surging ahead but this impression is largely created by increasing sovereign debt and fraudulent manipulation of statistics. In fact Boggart blog recently reported that politicians have been trying to claim prostitution, drug peddling and other illegal activities are driving economic growth.

prostitutes boost gdp Entrepreneurs working to boost GDP (source)

The Economist however has come up with a piece of evidence based on Sopranonomics which proves this recession .now a depression) is the longest and deepest ever. And prostitution is being hit hard.

The Economist finds:

“…the internet is making the buying and selling of sex easier and safer (from what we have been told). But it’s not all Pretty Woman… not only is the oldest profession in the world seeing prices going down (the dreaded deflation) as the shift online has boosted supply by drawing more locals into the trade; but as the following four charts show, rates vary dramatically by ‘services’, ethnicity, geography, build, and bust size.

Prices going down rather than heads. That’s got to be bad news for working girls. The Economist even gave us a nice infographic showing that in an industry where earnings are based not only on range and quality of services offered, but on looks, legs, breast size, ethnicity, hair style and colour and dress sense (or lack of), earning are dropping faster while knickers are dropping less often.

prostitution earnings
(Source)

Clearly then, deflation is hitting the working girls as well as their satisfied customers.

Here’s that link again, it’s actually quite interesting reading and tells us a lot about the state of society.

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America’s GDP Surges 4% in Quarter 2 – Jonathan Creek Shows How The Trick Is Done

Magic sleuth Jonathan CreekMagic sleuth Jonathan Creek exposes tricksters – economic sleuth Boggart Blog exposes statisticksters

This morning the US Bureau of Economic Analysis, an agency of the Commerce department revealed Q2 GDP statistics which blew made nonesense of estimates, showing year on year growth for the second quarter at 4.0%. This was explained as the result of a surge in Inventories and Fixed Investment, while exports added only 1.23% to the GDP number. The full breakdown by component is shown below.

The BEA noted, “The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 28, 2014.”

Hmmmm – several notes of caution there, and let’s not forget that the corresponding figure (the headline grabber) for the first quarter said GDP had grown by 1.6% for the quarter. This was later revised to -2.9% with the long cold winter (Warmageddonists please note) blamed for the contraction.

See a detailed breakdown of figures as the BEA web site.

What does this mean for the global economy? Nothing really, the economic recovery being puffed by Obama in the USA is as illusory as the one George Osborne is raving about in the UK. And don’t let any economically illiterate idiots tell you everything would be hunky dory if Labour were in power. Remember Osborne’s recovery illusion is employing the same trickery as the Brown Balls Boom of 2001 – 2007.

The real problem is that GDP, the statistic used by most governments as a measure of their economic success, is not a meaningful measure of economic performance. It only measures the amount of money churning through the economy. So ship in a million immigrants, give them £200 a week in benefits and you have grown the economy by £200million a week. Then if you fund that by raising £100million in taxes and borrowing £100million, you have ‘grown’ GPD by £400million a week.

Simples.

Do not trust a word government (of any political party) says. It is the responsibility of the electorate to hold the buggers to account.

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The Fiscal Cliff

Cliff with The young Ones
Picture source:Sorry, I couldn’t find a still of the final scene from The Young Ones TV series where the bus crashed through a picture of Cliff and went over a cliff.

All the huffing and puffing about public spending, deficits and economic collapse is starting to resemble one of those low budget horror movies where you never see the monster, just a shadow on a wall or heavy breathing or a trail of blood drops.

Many people believe there is another financial crisis, bigger than the one that caused havoc in 2008, coming straight towards us, that’s why consumer spending is down and national economies are stagnant. But the authorities all tell us not to panic, they create an illusion of growth by printing money, they keep unemployment statistics within an acceptable range by expanding the public payroll and by statistical prestidigitation but instead of the mayor of Gotham City announcing the streets are safe, Presidents Obama and Hollande, Prime Minister Cameron and Chancellor Merkel are telling us economies are recovering strongly and growth will wipe out the deficits.

As I type, political parties of left and right are butting their heads together over which of their two entirely discredited fiscal policies, Keyneseanism or Monetarism, we should use to rely on to avert a plunge over the fiscal cliff.

Considering the amount of deficit being funded by borrowing they are arguing over what size of Band-Aid should be stretched over the gaping wound when it ought to be obvious that cauterisation and stitches are required. If you mention this, you’re called a right wing extremist, swivel eyed loon, neo – con nut job or even an evil fascist bastard who wants to throw old people to the dogs and deny the underprivileged their inalienable human rights.

“You cupid stunt,” angry, swivel eyed lefties will say, “Don’t you know running a nation is not like running a household. Budgets don’t have to balance, that’s just a right wing misunderstanding. To reduce the deficit you have to borrow more, spend more and allow in more immigrants.”

Politicians have for so long treated tax revenue and government borrowings like Monopoly money they cannot understand why people who cast votes are suddenly talking about the need for real rather than cosmetic spending cuts. In the end however it is a numbers game. And for too long the numbers have not added up. It is sheer folly for the politicians to ignore arithmetic, the numbers game does not have a vote and is favours the well off while politicians who want to be elected know the quickest way to get votes is by talking of equality and fairness and increasing entitlements to unsustainable levels, resulting in vast deficits that can only be covered by borrowing.

In the past century (probably a little less in reality) these politicians, heavily influenced by pressure groups and populist media have grown a long list of goods and services everybody should be entitled to besides food, clean water, clothing, and shelter. The new entitlements, without which people cannot live a full and happy life, include laptop and tablet computers, internet access, mp3 players, smartphones, designer clothes and footwear and access to entertainment. Reality, cruel, heartless, uncompromising reality which only considers the numbers and never peoples’ feelings insists that it is not feasible for everybody to have all those things.

The left says we should abolish numbers and use statistics instead, after all statistics will always give politicians the answer they want. Half of the Conservatives say the same, they have been educated in the same schools and universities as the lefties and have taken on board the same lies.

So while we have the socialists, liberals and “compassionate conservatives” saying, “we must make sure nobody suffers from spending cuts, and while we’re at it we must also find money to feed and clothe the third world poor, buy them computers and smartphones and designer trainers so they do not feel marginalised,” realists are saying, “FFS who pays for all this, we borrow money from the Chinese on which we pay interest, to fund people who can contribute nothing because politicians and corporate leaders exported all the work to China.

We have Quantitative Easing which means government lends money to the banks at half a percent and the banks lend it straight back at three per cent to fund the governments next monthly deficit. The longer this goes on of course, the larger bite interest payments take out of government revenue each month.

And when you look at the numbers involved it’s no wonder politicians don’t want to talk arithmetic. The west is broke, we can’t afford a loaf of bread yet our leaders are only interested in spending cuts of a similar nature to giving up the plan to buy a Rolls Royce and getting a Lexus instead. And they trust the “scientists” who tell them if you torture data enough, 2 + 2 can be made to equal 5.

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Growth: Government versus private sector

As Labour supporters lost in Limbo scream for more stimulus spending on government projects to get the economy back into “growth” I had to nick this cartoon:

big_government_

Read the accompanying article about how the growth of the pubclic sector stifles private, for profit enerprise, the sort that generates tax revenue rather than recruiting more tax eaters. Burning Our Money – How Big Is The Government