Clint Siegner: Bureaucrats in the U.S.S.R. kept issuing glowing economic reports right up until the Soviet state collapsed.
Of course, many snickered at those reports for years. Widespread poverty and unemployment were obvious and no amount of government bluster obscured that reality. People generally understood that economic reports were little more than another propaganda tool.
Here in the U.S., official data is considered more reliable. Americans have been told the economy is getting better since bottoming in 2009. There is some evidence to support this. In particular, real estate prices have made a big recovery due to cheap credit, and the stock markets are back to making new highs. So when officials tell us things are getting better, we have reason to believe them.
But, investors should be careful before suspending all disbelief. The well-paid bureaucrats in Washington have the same powerful incentives to support their government’s narrative as their peers did in Moscow.
While we don’t have bread lines, we do have record numbers of people on food stamps. But these 48 million Americans who cannot provide for their most basic human needs are hidden from public view because they get debit cards and coupons to blend in at the grocery store.