Washington’s cheery propaganda is not fooling the rest of the country one bit.

“Recession Ends.” That was the bold-print headline I came across Friday morning as I opened up my news feeds. “What wonderful news,” I thought.

This has, after all, been the worst economic backslide since the Big D in the ‘30s and ‘40s. “It’s so good to hear that it has finally ended.”

Okay, that’s not what I thought at all, really. You see, I follow the numbers coming out of Washington closely, but I also track as many outside sources as possible in an attempt to triangulate some kind of accurate view of the economy.

Cooked Books

For example, I certainly read the Labor Department’s unemployment figures.

According to Labor’s Bureau of Labor Statistics, unemployment is still just a hair below 10%, certainly the highest it’s been in quite some time – by an order of magnitude! But I also know that Washington is fond of cooking the numbers.

For example, this number only includes the folks that BLS figures say actually deserve to find work. That is to say, “active job seekers who haven’t been looking for but so long, and haven’t taken gigs slinging burgers just so they can bring food home each night.”

In point of fact, Washington frequently moves entire platoons of hurting Americans on and off this list, so as to produce a number their bosses can live with.

Triangulating Outside the Spin Machine

And so I also follow closely the info coming out of such disparate sources as employment placement heavy-hitter Challenger Gray & Christmas, HR service giant ADP, and still others. When I tot up all my various “outside-the-beltway” sources, I get an employment figure somewhere just over 80%, leading one to believe that a more accurate unemployment number might be, say, 17% to 19%.

It’s that old propagandist’s dream. Control the information people see, and while you might not control the truth, you can certainly attempt to control perception – for a while anyway.

When I saw that headline about the recession ending, I was more than a tad suspicious.

Adverse Conditions

So I broke open the report, and began to read. At first glance, things looked rather promising for us. According to a popular “adversity index” (already a suspicious source, as these “indexes” are frequently odd amalgamations of whatever data the crew that developed them chooses to present), the recession has ended in 79 vaguely defined American “metro areas.”

Okay, now my hackles are up. What kind of dross are they feeding us here? Where’s the hidden mickey? I didn’t have to dig but so far down to find the massive gaping flaw in the original headline.

Even by its own standards, this report is still pretty darn miserable, really. Seventy-nine metro areas may be a tad less “adverse,” but another 270 are at best experiencing “a moderating recession,” translated as “not shrinking as much as they were for a while there.” And 35 of these “metro areas” are still experiencing “full blown recessions” that are more and more resembling “out and out depressions.”

25.9% Fixed – Or 74.1% Broken?

The same study lists 11 states as “in recovery,” 39 as “in recession,” and not a single damned one as having an “expanding economy.”

As any kid in deep trouble can tell you, it always helps to start out with the good news: “Mom, I didn’t break 25.9% of the lamps in the house.” It’s all a matter of presentation.

The reports teetering on my desk are rife with such strained optimism. The Federal Reserve wants me to cheer about the third increase in industrial production in as many months. Most honest economists had pegged the number at 0.2% growth in September. The Fed now claims that it is actually 0.7%. They then immediately annualized the figure to 5.2%, and used that larger number whenever possible for the rest of the report.

Below-Average Slackers

Skim down into the grotty details, and you find a less understood number: Capacity Utilization – the measurement of how much slack there is in this limp “recovery” – just rose from August’s 69.9% to September’s 70.5%.

To give you a sense of scale here, from 1972 to 2008 – which includes the recessions of 1973-1975, 1980-1982, 1990-1991, and 2001-2003 – the average Capacity Utilization was 80.9%.

“But this time around is different,” the bright young men in Washington tell us. “This time we acted quickly and decisively to rescue the economy with trillions and trillions in economic stimulant! And it’s working too: We can prove it!”

The Second Team Comes off the Bench

The proof offered up? Vice President Joe Biden’s chief economic advisor, Jared Bernstein, tells us so. (We have to settle for Bernstein because Treasury Secretary Tim Geithner is busy chatting with the CEOs of Goldman Sachs, JPMorgan Chase, Citigroup and occasionally the president – if he can get through.)

As per the VPCEA, all those trillions in federal stimulus have created 30,000 new jobs. Or maybe saved them. Not quite sure about that. Want to know how they know this wondrous news? They polled businesses that received some $16 billion in Washington’s largesse, and asked them if the money helped them to hire or at least not fire somebody.

Strangely enough, when Washington called, most everyone said, “yeah, sure, something like that.” Thank god for that concrete answer, because most every other fact we have on the remaining trillions is based on “economic modeling.”

Main Street Knows the Truth – and It Hurts!

In point of fact, we will most probably never have any real numbers. The only watchdog assigned to guard this trillion-dollar hen coop, Special Inspector General Neil M. Barofsky, has been shouting in the wilderness that the entire effort has been rife with misinformation, inattention, blind-siding, backroom deals and misappropriations that seem to verge on highway robbery of the grandest kind.

The end result?

Wall Street has awarded itself record paychecks – some $140 billion so far in 2009, in a mere three quarters, with three more months to run wild at the public trough. But folks everywhere but Wall Street seem to be having a much harder time of it.

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As per the Reuters/University of Michigan Survey of Consumers (i.e. you, me, and most anyone else who would answer the phone when that cute-sounding college girl called to “ask me a few questions”), confidence in the economy is not rising at all. Rather, it has slipped another notch from the 73.5 we were told to expect to a wan 69.4.

The rest of the country is not buying Washington’s cotton-candy reportage. In fact, they are not looking to buy much of anything at all.

Other Related Topics: Adam Lass , Economic Growth , Employment Rate , Recession , WaveStrength Options Weekly

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