Grease-- Sophocles' And... Wall Street's

The other day I was driving along, minding my own business, happy to not be thinking about the extremism of Newt Gingrich and Mitt Romney or about Obama's latest betrayal of his base. So I didn't mind when a story popped onto NPR about how Greece's head statistician was a crook who was cooking the books to make it easier for Germany to take over the country and depose the Socialist prime minister, replacing him with a fascist-oriented "technocratic" government. It was a short piece, less than 5 minutes-- and quite interesting. You'll enjoy it... give it a listen.



To summarize, Greece very blatantly fudged its budget numbers to enter the Eurozone, and its reputation as a source of accurate financial figures never really improved. A "respected" economist, Andreas Georgiou, from the toxic IMF, was a chosen to head a supposedly clean and independent new board, Hellenic Statistical Authority. He has completely nifty one-percenter credentials. But there was monkey business on the new board and Georgiou seems to be working to undermine the Socialists and make it easier for Germany and the banksters to take over. A clash between Georgiou and board members resulted in charges and countercharges. One, sacked senior member, Zoe Georganta claimed the 2009 deficit was exaggerated by Georgiou “so it would become larger than that of Ireland and Greece would be forced to adopt painful austerity measures.” Lawmakers from Greece’s five main political parties, from right-wingers to communists, have also contested the 2009 deficit figure.

Economics professor Zoe Georganta claimed that the statistical service under Georgiou may have artificially inflated the 2009 deficit. She suspects it was a ruse to justify tough austerity measures on Greeks.

"I don't say that we were [OK] with the statistics all the time. We were not OK," she said. "But we have to find a way to correct it, not to make it worse. We have made everything worse now."

She also suggested that Georgiou was a puppet of the Europeans and his old employer, the IMF.

Her accusations sparked an investigation by the prosecutor for economic crimes.

Georgiou and two others in the statistical authority are being investigated for something called "breach of faith against the state," a crime that can carry a sentence of up to life in prison.

Now I just happened to remember a relevant couple of paragraphs from David Korten's brilliant new book, Agenda For A New Economy, although it doesn't talk about Greece fudging stats and misleading and manipulating the public, but someone a lot closer to home. Remember when the Fed stopped reporting the M3, the amount of money in circulation? It was in March, 2006.

Some observers believe the Fed stopped reporting it because the amount of money had begun to grow so fast as to cause public alarm and undermine confidence in the dollar.

John Williams, a consulting economist who has spent years studying the history and nature of economic reporting, tracks economic statistics that the government has either stopped issuing or has seriously distorted. Using the same methodology the Fed once used to compile its M3 index, Williams reports that the rate of growth was running from 5 to 7 percent in 2005. It then began a steady acceleration to a peak annual rate of over 17 percent at the beginning of 2008, just before the credit collapse kicked in.

When the money supply expands faster than productive output, price inflation usually results. According to the official Consumer Price Index, inflation was running at a rate of 2 to 4 percent at the beginning of 2008. Williams compiles his consumer price index using the same methodology that the government used up until the 1980s, when it decided to start cooking the books to hide evidence of economic mismanagement and hold down automatic wage and Social Security indexing. According to Williams the actual rate of inflation at the beginning of 2008 was in the range of 12 to 13 percent. What you experience every time you go shopping is true.

Surprised? Yes, successive Wall Street-dominated presidential administrations, both Republican and Democratic, have been cooking the books on inflation, money, unemployment, and the GDP for decades. Our economy is in far worse shape than the official statistics reveal.

As Rick Perry would say, "Oops!" Back to Greece... kind of: