07 March 2008

1 in 200

0.5%One in two hundred. That's my (admittedly rough) estimate of how many people believe INDEC is reporting the true inflation rate for February — which turns out to be, according to them, exactly 1 in 200, or as those math snobs say, 0.5%.

The good news is that, according to one economist consulted by La Nación, last month's Consumer Price Index "doesn't seem as fudged as in other cases". Let's rejoice.

Food and drink did rise a bit more — 1.1%. That's just 11 more pesos. It's not much, and now that tomatoes are cheap (in real life, not in Kirchnerland) you might actually be eating and drinking a lot more for that modest extra amount.

No more potatoes for youNot only that, but with the soon-to-be-implemented seasonal substitution sampling method, inflation will be magically reduced further! The method works by ignoring large price variations — replacing the varying items with others of the same category, whatever that means. Take, for example, potatoes. Suppose they're suddenly up by 15%. That's a lot. That has to be anomalous. It must be because it rained a lot — or not enough — or maybe the Chinese suddenly developed a taste for fries. So you take potatoes out of your statistical sample for this month's inflation rate. You can do without potatoes for a month, can't you?

The true experts note that, once you begin tampering with the inflation rate, the whole statistical edifice has to crumble. Those GDP growth figures, for example, say nothing if you don't factor in inflation to get the real growth. Gloating over the nominal GDP figures, like the Kirchners love to do on every conceivable occasion, is like coming from the gym and congratulating oneself on gaining weight when most of it is fat rather than muscle.

And then the fudging of the inflation rate is not only obvious if you go to the supermarket, but can be easily inferred by looking at the (presumably untouched) figures of tax revenue. If the VAT brings in 38% more than last year, and people are buying more or less the same amount of things and there aren't a lot more people buying and you haven't caught a massive amount of tax evaders and forced them to pay the tax, then it's obvious that most of that increase is due to rising prices.

Since INDEC is irrelevant, most people who care are now working with private estimates, which produce rates on the order or two to three times the official figures. By now it's clear that INDEC is not doing statistics but propaganda, so I think we should rename it to something more meaningful. The acronym is so math-geekily cool I wouldn't want to change it, but I have an idea to preserve the initials... Let's call it Instituto Nacional de Distorsión de Estadísticas a medida de Cristina.

1 comment:

  1. Not being one to pass up the chance to coin a neoacronym, I'd like suggest Instituto de Mentiras Irresponsables, Estadísticas Revisionistas, y Desinformacion Argentino.

    There are three kinds of lies: lies, damned lies, and statistics— Benjamin Disraeli



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