What does “Political Manipulation” of Ugly Data add up to?
By Bianca Fernet, Argentina:
Argentina’s national statistics bureau (INDEC) is expected to publish revised data next month that corrects the alleged “book cooking” and data falsification that occurred under former President Cristina Fernández de Kirchner. How bad is it?
The verdict is ugly. The former administration caught significant flack for lying about inflation, but a project from Harvard University and the University of Buenos Aires show that that was just the tip of the iceberg. In addition to inflation, former Cristina’s administration hugely overstated gross domestic product (GDP) and vastly understated poverty.
This is a big deal because GDP is used to determine economic well-being by measuring how big a country’s economy is and how fast it is growing.
The aptly named Arklems + Land project uses the internationally recognized KLEMS Framework to calculate GDP based on capital, labor, energy, material and service Inputs. In an interview with the Financial Times, Arklems director Ariel Coremberg blatantly stated that “since 2007, official economics statistics in Argentina, particularly on consumer inflation and GDP, have been subject to political manipulation.”
What Does “Political Manipulation” Add Up To?
Since 2007, both Argentina’s GDP and poverty data show evidence of intentional miscalculation.
Overstated Growth
Under Cristina, INDEC reported that the economy grew by 99.1 percent between 2002 and 2012. In 2013, the government boasted 8.3 percent annual growth. To put that whopper into context, China only grew by 7.5 percent the same year. In reality, Argentina only grew about 71.1 percent over the same period.
The numbers get more personal when you break this down into GDP per capita, or divide the total economy by the population.
In 2014, the World Bank reported Argentina’s GDP per capita as US $12,510 using INDEC data. Arklems + Land calculate the GDP per capita the same year as only US $7,399. This is a difference of over 40 percent and drops Argentines below the global average of US $10,739 per head and from the 56th richest in the world all the way to 78th. This places Argentina below China, Mexico, Brazil and Suriname just to name a few.
Understated Poverty
When it comes to insulting ones intelligence though, the discrepancies regarding poverty levels really take the cake.
The numbers line up through 2006, with poverty falling from 50.9 percent to 29.2 percent. But in 2013, INDEC reported a poverty rate of 4.7 percent. To put that into context, that would mean Argentina had the same percentage of the population living in poverty as countries like Sweden and Norway. While we all appreciated the hilarious memes that were born from such a ridiculous lie, a government should be ashamed of pretending and officially reporting that poverty has been effectively eliminated.
Reality Is Not Political
It is critical to clarify that this is not just some ideologically motivated, mathematically ridiculous attack on Cristina à la the misery index. This is a study carried out by the public University of Buenos Aires and Harvard University.
Moreover, acknowledging this correction and determining the reality of Argentina’s economic situation in its entirety is a prerequisite to advancing. In order to solve problems, it is essential to first identify them and then to understand them. The tidy rows of economic data to describe countries and the well-being of their inhabitants appear as if by magic by the World Bank, but the reality is far from that.
For young economists keen on changing the world, the unreliability of data from countries seeking economic growth and reduced poverty is one of those disappointing rude awakenings. Before ideology can even enter the room, many times a country’s “data” comes from some “economy” ministry run by the nephew of some president-for-life-cum-warlord-cum-dictator who prefers to spend his time and country’s resources on Caribbean yacht vacays. That’s a bit of dramatic hyperbole, but you get the point — the rigor and care that go into assembling developing country datasets pale in comparison to the expertise and precision invested in their analysis.
The movement to correct faulty data from the past and create a reliable INDEC is laudable and necessary. Even more important is rebuilding the institution by using reliable and non-politicized methodology in a transparent way. INDEC should serve as a tool for Argentina, regardless whether the reigns are being tugged right or left. By Bianca Fernet.
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“For young economists keen on changing the world … disappointing rude awakenings”
Such as : You can’t change the world! Applies to all world-changers :)
This is worth repeating for all world changers. Although it won’t change them, either :)
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A dog bites man story. Her ire is justified, but can be directed at every country on earth, especially the land of the free… Ain’t nuttin’ believable coming outta Mordor on the Potomac.
This will be interesting to watch, as it will give a hint of what hides under they HUGE RUG, in china.
So far, they have set on the previous “liberal” course, i.e. borrow massively.
“It is critical to clarify that this is not just some ideologically motivated, mathematically ridiculous attack on Cristina à la the misery index. This is a study carried out by the public University of Buenos Aires and Harvard University.”
Of course, everything coming out of Harvard MUST be gospel truth…
What does “Political Manipulation” of Ugly Data add up to?
I thought USA instantly.
That was my first reaction too. I told the author, Bianca Fernet, in an email, and this is what she wrote back:
“We’re all going to hell together, hooray :) “
Did we really need a Harvard study to know Argentina was lying about its economic welfare? Just talk to all the Argentinians over staying their visas in Miami. They are there for a reason, they make up an entire neighborhood in the city. The Venezuelans have their own neighborhood as well.
The unemployment rate dropped today in the US. REALLY. I’m not making it up. We hear about the massive layoffs every day but the official numbers paint another picture, the picture they want you to see, not the one that is real. Not counting something doesn’t make it go away.
Which leads me to the related topic of data mining, the new up and coming industry, the new new thing. How good is all that data when they are using convoluted models to make it up. I think of it as virtual unreality.
The basic trick behind data mining is to come up with enough correlations so by chance some are false positives. If the odds against a correlation being due to chance are 1 in 20 or less, it is called “statistically significant”. Data mining is based on comparing a bunch of things against each other. For example, if you compare a hundred factors against each other by pairs, you get 5500 different comparisons. By sheer chance, around 275 will be false positives, they will look “statistically significant ” but in fact there is no real correlation. What you do is take one or more and claim them as a new discovery. This sort of data mining was the basis of the spurious supposed correlation between autism and vaccination.
sub-heading statement: “Reality Is Not Political”
Anyone tell that to the US information Czars? (psssst….I think they’re all from Harvard)
When will economist accept that GROWTH is NOT sustainable!
Only a cancer grows endlessly & we all know how that ends, same for the economy, it will stop growing because it will run out of resources to support that growth, population growth will also end for the same reason & with terrible suffering.
If one politician or party states that growth is inherently unsustainable and cannot happen long term, voters choose the other party or politician. If everybody accepts that growth is coming to the end, then the banking and financial institutions and markets everywhere collapse, with all the negative consequences one would expect. In addition to that, nobody alive today in the developed world has experienced anything other than long term growth punctuated by short term recessions. The idea of this changing to collapse and decline with no chance of returning to the long term growth that we all rely upon to maintain or improve lifestyles is therefore something that most people will adamantly refuse to countenance. Here in New Zealand, we are led by a former banker – the last person to lead anybody on a path of adapting to a collapse scenario or to admit to the end of growth. Here, even the Green Party present “sustainable growth” as a central plank. It will not be easy to transform the psychological norms of billions of humans around the world, nor even millions in one country or city. This is why we are all sprinting full speed to and over the edge of what may well be the highest cliff that humanity has ever encountered. Almost everybody is convinced that we must have growth, that growth is therefore possible, we must do all we can to achieve growth above all else. The future is looking most bleak indeed at this point.
As NZ resident you should realise of of the keys to a, sustainable vibrant, stable, Economy, and planet, is POPULATION MANAGMENT.
Just like a farm, the world is overstocked.
As A NZ resident, you should know what happens to an overstocked farm.
We need to go back to 1890/1900 Ethnic Population levels, Globally then work at producing a stable economic model.
Which can easily be done, no need of huge Euthanasia programs.
Simply a 1 child policy until each ethnic group, Globbally returns to its 1890 1900 levels Globally.
Think of all the Immigrants who would be happy to go Home. If their Homeland population dropped by 60% +
China showed, a 1 child policy works, and what the Flaw’s in it are, it is simple to avoid those flaw’s.
The current consumerism model of Capitalism.
Based on an ever expanding population of Consumer’s. Fueled by cheap credit. With shorter lifetime Consumer Item’s. In a Ecologically and Resource unsustainable manner. Is simply Globally untenable, long term or even short term probably.
As I believe we have reached the Overstocking failure point of the global farm. Which we are now doing irreparable damage to.
Of course Globalised Corporate America, with its chinese and Indian allies, will be very against all of this.
The CAUSE of the Problem, is always against the solution.
How can anyone with just two neurons that can at least bump together to communicate actually believe that endless growth is even possible?
What is wrong with those people? I’m no ‘brain’ but even I know that growth is not sustainable.
I am sick and tired of hearing from our “leaders” the word GROWTH GROWTH GROWTH & MORE GROWTH!!! STUPID!
How can they not know that we cannot keep growing?
They have to know & are preparing to “handle” it.
It looks like billions of people are going to get a very nasty message from reality, hunger, starvation, disease, mass unemployment, wars, water shortages & brutal governments trying to keep in power & hold things together or if not, exterminate the excess & troublesome people.
Europe will soon have to switch from rescuing migrants to fighting to keep them out & not rescuing them, leaving them to drown. Climate change will send billions of people migrating to where they hope things are better. They will be met with razor wire fences, walls, vicious dogs, guns, gas & trigger happy guards.
The way things are headed with horrible overpopulation, resource decline, environmental decay & climate change, collapse is certain & soon!
I’m glad I’m not young & I saw trouble decades ago with merely overpopulation which is why I chose not to have children, now there are even more people & more disasters coming down on us & yet most people remain in denial, ignorant or they believe in fairy tales like “renewables” replacing oil, impossible!
The future is indeed going to be very bleak IF we can survive climate change & resource wars. The speed & intensity of this climate change could very well result in our extinction along with most life on earth.
Better get out & party while you still can, the future looks very hot.
The climate change is not going to be that drastic. It is not even as warm yet as the Medieval Warm Period. We and life on Earth generally have survived worse. Neither will the world stay permanently warm after we stop burning fossil fuel. The oceans are like a huge sponge that can absorb thousands of times more gases than exist in the entire atmosphere.
What I think WILL happen is that global warming will disrupt world wide agriculture. At the same time. the relentless globalization of world agriculture will turn farming in destitute heavily exploited 3rd world countries from feeding the population to growing products for world markets. I think that by the middle of the century these and other factors will combine in a perfect storm of an agricultural crisis that will lead the advanced countries barely able to feed themselves and mass starvation involving billions of people in the 3rd world that will lead large areas depopulated. When you perform a study of overpopulation in an ecosystem, the population can build up to a high level then crash badly leaving very few of the species in question present. I fear that something like that realistically is the only thing now that can happen to our species. it will bring about ?Reverend Malthus’ grimmest scenario.
You dont understand the topic or what will happen, Your posts shows this.
Humans will survive warming.
Their current way of life, will not.
As unless humans change their ways very quickly many of their Major population centers and Zones will be under Water.
An it will be possible to grow crops in the Sahara Antarctica and all of Greenland all year round.
Much of low-lying, china, India,Vietnam, Cambodia, Malaya and Indonesia, will be underwater or unusable swamps. = almost 3 Billion Homeless landless people.
Climate change is happening faster & is more extreme than even the predictions of the most pessimistic climate scientist.
Methane seems to be increasing exponentially, if that’s true, we could be looking at a Permian like extinction event that will kill most life on earth including our favorite species, us. “Most” species is merely over 50% not the 90% of the Permian mass extinction event.
It’s true that we don’t have the Deccan traps pouring out oceans of lava, CO2 & SO2 into the atmosphere, no asteroids have hit us but us humans have been pouring tons of CO2 into the atmosphere for decades, cutting & burning down forests & 47% of the oceans phytoplankton is gone, that has set in motion many positive tipping points & warming may now be irreversible.
Humans are very adaptive, we live in many, even hostile environments but we are better at coping with cold than with heat & our food plants are less adaptive than we are, I also expect the collapse of our food system including our domesticated animals.
Heat & droughts are already affecting agricultural systems, crop failures are growing
Collapse would lead also to desperate people killing & eating anything remotely eatable, including other humans to survive, there go your “pets”, rats, birds, domesticated animals, your children, the weak, the old & plants.
Earth will be left a barren wasteland by the time we are through.
People tend to ignore reality until reality comes crashing down on them like a ton of breaks. Wasn’t it Ayn Rand who said something like, “You can ignore reality all you want, but you can’t ignore the consequences of ignoring reality.”
After the disaster is generally the only time they are willing to listen to reason.