Wednesday, July 18, 2012

Words to Hide the Obvious in Economics

One way to reveal the history of the changes in the economic landscape is to study how official meanings to key concepts have been altered over time.  "Knowing things that ain't so", as Josh Billings once said, presents much more trouble for folks as their simply being "ignorant".  

I present a selection of words - here used in the context of the writing of others - that I believe present great danger to the reader in their ability to hide the 'obvious':

“Oil” (2007 and after)
“… the definition of "oil" was changed in 2007 to include synthetic liquids.[*]…” [1]
[Not to confuse ‘oil’ with ‘energy’]
“…there are at least 3 factors that are ignored in the total liquids graphs …. One - NGL's and ethanol have only 70% the energy that crude contains. Two - the EROEI of all liquids is dropping - fracking and deep water drilling, just to name two, require much greater inputs per unit of return than does conventional on-shore. Three - the population continues to grow, so per capita available net energy is what matters. And as a corollary to that, the portion of the global population that is reliant upon and has lifestyle expectations based on readily available liquid energy grows every year, so the call on the decreasing net available energy grows even more rapidly than does population itself.

Only a graph that takes into account energy density, net energy and population can accurately paint a picture of the global liquid fuel situation.” [2]

“Retirement age”
In the United States, while the normal retirement age for Social Security, or Old Age Survivors Insurance (OASI), historically has been age 65 to receive unreduced benefits, it is gradually increasing to age 67. For those turning 65 in 2008, full benefits will be payable beginning at age 66.[**] In France, the retirement age has been extended to 62 and 67 respectively, over the next eight years.[***]  In Spain, the retirement age will be extended to 63 and 67 respectively, this increase will be progressively done from 2013 to 2027 at a rate of 1 month during the first 6 years and 2 months during the other 9.[****]  [3]
[**]  Normal Retirement Age [NRA]
 [***]  "Pension rallies hit French cities". BBC News. September 7, 2010.
[****]  "Spain to Raise Retirement Age to 67". The New York Times. January 27, 2011.

“The government used the same calculation for the CPI from 1913 to 1980.  In 1980, after seeing ....inflation in late 1970s, the government changed the calculation and dropped food and energy from the Core Inflation Index
While the U.S. government repeatedly states that we currently [2011] have about 1% inflation, by using the older pre-1980 government calculation of inflation, we find that the true inflation rate is closer to 10.7% as of May 2011 based on the SGS “Alternate CPI” calculation from [4]

“…estimated long-term discouraged workers… were defined out of official existence in 1994 [in the US].
Short term discouraged workers are not included in the US ‘monthly headline number’ (U3) but only in the government’s broadest measure of UE at the Bureau of Labor Statistics (U6). [5]

Employed Person
US term for an individual 16 years old or older who, in a given week, (a) works minimum one hour for an emolument or minimum 15 hours of unpaid work in a family business, or (b) who is not working but has a job or business from which he or she is temporarily absent, whether or not being paid for the time off. [6]

Capitalism” (1955)
capitalism, n.
…. the concentration of capital in the hands of a few, or the resulting power or influence…... a system favoring such concentration of wealth.[7]
Capitalism” (1941)
“…An economic system in which capital and capitalists play the principal part; specif., the system of modern countries in which the ownership of land and natural wealth, the operation of the system itself, are effected by private enterprise and control under competitive conditions.” [8]
[1]  [*]  International Energy Statistics
As quoted in ‘Peak Oil’ Wikipedia, Monday 16th July 2012

[2]  clifman on February 25, 2012

[3]  Retirement, Wikipedia 18th July 2012.

[4]  ‘Lessen the load of Rising Inflation - How to maintain purchasing power’. Whiteside Wealth Management, Inc.

[5]  Alternate Unemployment Charts.

[7] The American College Encyclopedic Dictionary, 1955
As quoted in:
Economics: changing definitions

[8]  Webster’s Collegiate Dictionary, Fifth Edition, “date unknown as the relevant page is missing, but the latest population information in the back of the book is from 1941”
As quoted in:
Economics: changing definitions


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