John Williams has worked as a consulting economist since getting his BA and MA from Dartmouth college in New Hampshire in 1972. He now lives in California – these paragraphs are from his biography:
One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now called the GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client…and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.
For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily).
In 2004 he started Shadow Statistics and runs a blog with updates on what he calculates to be the real U.S. government statistics, you can subscribe for $175 a year. The government keeps statistics on many things; Williams focuses on only a few; unemployment, Gross Domestic Product, inflation, the value of the dollar and the money supply.
You may ask why the government would fudge the numbers. Williams found that between 1997 and 1999 the government understated inflation and as a result inflation indexed payments for social security didn’t escalate as they should have and the government saved millions. The effect is the same in many contracts where payments are inflation indexed; between retired people and pension funds, between corporations and labour unions. Lower inflation rates, real or fictitious, save many corporations money.
On his web site you can check what he says are the correct figures today; unemployment in the United States, which the government says is under 5%, he says is about 22%. One reason for the big difference is that since the ‘60’s the government no longer counts as unemployed those who could not find work.