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Thank you very much and why -- ever wondered whether government data are cooked.
Those suspicions increase on Monday with the announcement that GDP numbers are going to increased 3% starting in July because of changes.
In the way GDP numbers are calculated said the economy will look like he got an extra lift.
Even though it might not have.
Are we being misled by the numbers and if so what does that mean for the stock market and for all of your investments let's ask endless series former chairman.
The White House -- of economic advisors under President Bush and he is a senior fellow.
At the Hoover institution which we all know and love -- -- I got some suspicions.
-- this labor report that came out just before the elections I don't know if you remember that when -- household numbers.
To -- off like wildfire -- -- really.
Did not give a good indication of what the job figures were like like were you suspicious of -- are you suspicious of numbers in general.
I wasn't suspicious and I'll tell you why if you look at the numbers carefully.
What we know is that there's a tremendous amount of air in any given month in the data both in the labor numbers and as you mentioned in the GDP numbers that are coming out.
So for example if you look at the labor numbers you know the the in the much touted job numbers that we get -- every month.
Those are off on average in the typical month by about 70001.
Direction or another so that means -- you could have a 150000.
It might really end up being -- it might really end up being something like eighty is a big difference between eighty NT twenty and that's the typical month so.
You know so to see him -- looks really really high does not surprise me you know I think the the -- -- BLS -- worked at these guys and you know the guys -- Bureau of Labor Statistics are serious.
Career people I don't think they're tweaking the numbers I think that much of this just that relates to the inherent error in the process -- well real believers in the free market say that a much better indicator of of the economy of transit -- is the stock market itself now the stock market has been booming as you know.
So does that mean that the economy is about to take off.
Yeah that's a really good point if you look at the data and again that you know the data that you referred to the GDP numbers that are going to come out.
And ask you know how well does the current quarter of GDP.
Predict the future the answer is very very poorly almost almost just chance though you -- if you kind of look at where we are this quarter relative to the average -- -- a little better than the average.
You know what does that tell us about the future it basically tells us 5050 tells we don't know but if you look at that stock market.
The stock market is actually a much better -- so.
If you do the analysis what you find is that for a 73.
Point increase in the S&P over quarter.
That predicts the next year's growth rate will go up by about half a percentage points that would that would mean.
Given what happened in the last quarter.
Is that we would actually see growth going from below to slightly below team to about two and a half percent next year and that that would be the forecast -- last quarter and that's better then just looking at the GDP numbers Ed let me move you want to immigration because you've come out with kind of a -- radicals of some might say a modest proposal.
UN Gary Becker actually had been ordered to solve the immigration problems you would sell.
How would that work.
I well you know it isn't it it is a radical proposal it does -- and you know at first -- to be honest it sounds kind of crazy bit but I think it's not if you think about it seriously here's why it's not.
What are our goals we we want to do a few things first of all it's it's an honor and a privilege to be an American citizen and it's these things.
Should be allocated appropriately and appropriately means that we get the right people coming in both in terms of skills.
And in terms of their ability to contribute -- -- Youth the variety of different things.
We want the system to be fair we want to make sure that -- people from a variety of countries can come in and we also have a problem of twelve million people that are here illegally right now what are we gonna do with them.
We believe that if you sold the right to become a citizenship a citizen it would deal with all three of these in a much better way in the current OK -- well let me throw to.
Questions that year or two responses to that first of all some of the most.
Well -- creating immigrants that we've seen in this country come here with no money at all they don't have any money they create wealth.
When they get here but they come here without any -- already -- secondly could we see an influx of of wealthy terrorists who have access to a lot of cash.
OK -- both good questions the first one is surely we want people to be able to come -- When they don't have the money to it to pay for the entrance -- the way we would do that as we would simply -- -- be paid out over time and probably would like to see it conducted.
From their earnings through withholding tax so.
That usually come your way zero up with a very important he created man hours and eventually pay off the terrorist issue I think is there is an important one and of course we wouldn't that change the rules on that anybody coming into the United States.
Would have to pass the same screens that they pass now as well so you -- -- -- -- let someone come in because they have 50000 dollars.
But but you know the same problems that plague us right now with people coming in for free.
Wouldn't be any different under this system you you've got to do -- good job of enforcement.
And you know our officials do a pretty good job of enforcement but that that wouldn't be solved or exacerbated by selling the slots ahead -- -- year you're always thinking out of the box my friend great to see a former chairman of the council of economic advisors currency your fellow.
At the Hoover institution great to see -- thanks.
David the so.
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