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In this week’s episode, Peter offers an important reminder: the government has a strong incentive to bend the truth with their data, especially when we’re less than a month out from an election. Beyond this, Peter spends time discussing the proliferation of free market ideas on X, declares Grover Cleveland to be the last good Democratic president, and explains the broken window fallacy in light of Hurricane Milton. 

With last week’s jobs numbers still in the news cycle, Peter reiterates why they’re unreliable. Bidenomics shills like Paul Krugman are sorely mistaken:

“The numbers don’t matter anyway. They are subject to massive revisions in the following month, even in the following year. … The government grades its own report card. It doesn’t want to give itself an F, especially when you’re a month away from an election. So there is a lot of political pressure to make these numbers look good, especially the inflation number and the unemployment number.”

The data does not align with Americans’ feelings toward the economy, and knowing that thousands of new government jobs have been created doesn’t help the working class:

“It defies logic that people would be working two or three jobs and have maxed out their credit cards, be mired in more debt that they’ve ever been, despite working more jobs than they ever had, and say, ‘Oh, we’ve got a great economy.’”

This numerical deception is augmented by the fact that one key metric– inflation – has had its meaning corrupted by state statisticians:

“[Inflation] is an Orwellian double speak to pretend inflation is rising prices, but they’ve already pulled that off. But now that they’ve got the public to accept the false definition, they keep changing the index that measures those prices.”

Peter comments on Elon Musk’s recent pro-market posts featuring economist Milton Friedman, in which Friedman explains that government creates inflation:

“It’s not greedy companies. He [Friedman] says, ‘Businessmen are greedy. That’s just the way people are. They’re no different than anybody else. We’re all greedy.’ And greed doesn’t cause inflation. I’ve pointed out that greed actually brings prices down.”

Another recent source of economic fallacies is the havoc caused by hurricanes Milton and Helene. Many politicians wrongly assume both that the federal government is responsible for hurricane relief and that natural disasters are a boon for the economy. This is nothing more than a revival of the long-debunked “broken window fallacy:”

“You’re never better off because you have to rebuild something that was destroyed or because you waste your money. Like the Keynesians say, “Look, as long as we spend the money, it’s good for the economy.” … It’s like digging a hole, paying people to dig it, and then paying someone else to fill it back up. At the end of the day, you’re right back where you started. You’ve spent a lot of money, a lot of people have worked, but there’s nothing to show for it.”

Even worse is the fact that federal intervention has made natural disasters more destructive. By subsidizing insurance in disaster-prone regions and crowding out local aid, organizations like FEMA ultimately make people more vulnerable to disasters: 

“In fact, because now everybody expects the federal government to take care of every emergency, nobody is prepared. It would be much more efficient if we allowed local governments to pay for their own disasters and prepare for them. But we’ve created this huge moral hazard—that’s the real disaster. It’s the moral hazard created by FEMA. Now, natural disasters collectively cost a lot more because we’ve outsourced everything to the federal government, which even subsidizes people to build in flood zones.”

In times of disaster, federal policy should mirror the actions of the last admirable Democratic president:

“Grover Cleveland was the last great Democratic president. When there was a drought in Texas and Congress appropriated around $10,000 to help the drought-stricken farmers, he vetoed the bill. … He said, ‘I could lay my finger on no section of the Constitution that authorizes this spending.’ So he vetoed it. He said, ‘Look, I feel badly for the farmers, and I want to help them, but as president, I can’t use taxpayer money to help them.’”

If you missed it, check out Peter’s Commodity Culture interview from this week, where he dives deep into the economics of current global events.