The story pointing up the empirical worthlessness of the government's index of leading economic indicators, "Economic Indicators Lose 1.2%" (Sept. 29), scratched the surface of a deep problem. In fact, just about every statistical measure used by the government is equally as divorced from reality as this index, and the problem is not merely the inaccurate counting that plagues the U.S. Census. It is much more fundamental.
All the statistical measurements themselves are meaningless--shimmering figments of the economic delusions of the three generations of official alchemists: Keynesian social planners, Marxian "industrial policy" czars and monetarist number twirlers.
These high priests of bureaucratic babble rely on flat-earth economic theories that fail every scientific test of predictive accuracy, whose basic assumption of "manageability" has been discredited by the mathematics of chaos, but which have swept the field anyway because of their political utility. For example, the much-touted gross national product follows Keynes in counting transfer payments (Social Security, welfare, farm subsidies, military pensions) as additions to national income, even though they add nothing to the nation's production.
Marxians measure the value of output by the labor invested in it, without regard to supply, demand or market prices; these are the people who think that raising the minimum wage increases prosperity.
Monetarists believe that fiddling with interest rates and the money supply allows them to fine-tune the economy. This is equivalent to trying to control a car by twisting its speedometer needle--the inevitable result is a crash.