Thursday 19th of May 2022

economic disinformation…...

Economic figures must inform citizens, maintain their social usefulness and not become marketing instruments. Myret Zaki, journalist and author of several books on tax evasion and the end of the dollar, is publishing a new book with the explicit title, Economic Disinformation (Favre). Using numerous examples, Myret Zaki explains the motivations specific to the various producers of economic data, and invites citizens to mobilize to obtain reliable economic figures.




By Laurent Ottavi


05/09/2022.  Democracy


Laurent Ottavi (Élucid): How do you define the concept of “misinformation” which gives your book its title?


Myret Zaki: By "disinformation", I mean the dissemination of official data or data from major institutional players, which suggests a different reality, which embellishes or distorts the facts in a way consistent with the interests of the issuer, rather than to the truth and to the general interest.


It is the non-dissemination, the cessation of dissemination, the difficulty of access, the presentation made confused, or the insufficient visibility of important, essential data of public interest. These are the barriers, in terms of complexity and technicality, that can hinder access to relevant information.


Elucid: In your book, you focus on misinformation from above. Which actors are you talking about specifically?


Myret Zaki: It's about the institutional actors – governments, companies, interest groups, foundations – who have the most impact on our lives as citizens, and therefore the most social and democratic responsibility.


“Reprocessing the figures, finding independent and competent sources who can share their own research must be the priority of our information work."



You cite in your book numerous ways of truncating and hiding figures, whether omitting, concealing or hiding important information inside bloated annual reports. Can you give examples of some of these mechanisms?


Typically, companies that display climate objectives and at the same time increase their carbon emissions in absolute terms, such as Danone and Lactalis (according to the NGO IATP). Or fashion brands that have created sustainability programs but have unscientific methods and selective implementation.


Or the annual reports of banks that have page after page of detail on market risk, and then when a meltdown hits, you realize that the bottom line – that major exposure to ultra-risky assets – hadn't figured in the reports, where there was nothing to detect risk taking and speculative excess, despite tons of seemingly very detailed information.



When they have the will, do the media have the intellectual and financial means to dissect the communication of economic goliaths?


It is indeed essential and meticulous work which requires a lot of time, of which we have less and less as journalists, because it is necessary to reprocess the figures, and to find independent competent sources who can share their own research. This must be the priority of our information work.



Most bad news today is blamed on digital information. By pointing the finger too much at it, don't we risk missing the major causes of economic misinformation?


Totally agree. The digital is only the vector of prior information. Economic statistics, for example, depend on methodological choices which, already very early in the process, will favor an underlying chosen social project and a particular vision of the world. It is upstream of the process of calculating macroeconomic figures that this is played out.


Unemployment excludes a whole halo of inactive, precarious and underemployed people. If we included them, we would have unemployment at 25% in France.” 



The GDP is criticized because it would not be the right thermometer to measure the economic state of a country. What are the indicators that remain absent from the analysis of most "experts"?


GDP must be complemented by demographic and human development indicators such as life expectancy, infant mortality, suicide rate or incarceration rate. They are important indicators of the health of a country and its future prospects. Inflation, too, excludes many things like stocks and real estate, which are not considered consumption. The index in France gives a fairly low weight to fuel (4%) and rent (6%). However, this index is an average which does not reflect the situation of the greatest number.


Indeed, the more inequalities widen, the less inflation reflects the situation of the most modest: the impact of rents on their budget often reaches 25% and exceeds what the official index calculates, just like the impact of the outbreak gasoline prices. A national average indeed also takes into account high incomes, which deviate more and more upwards, and whose purchasing power is less and less affected by the elements whose price increases. Unemployment, too, excludes a whole halo of inactive, precarious and underemployed people. If we included them, we would have unemployment at 25% in France.



What would be the means or methods to improve things and which actors should be mobilized for this?


Citizens in general could mobilise to demand more integrity and representativeness of the figures. Ask that indices such as inflation and unemployment do not exclude aggravating factors but include them to take the true and honest measure of our savings. It is a highly democratic question: the figures must inform the citizen, retain their social utility and not become marketing instruments.



Which NGOs can we already turn to for reliable information?


It is necessary to follow the work, on the lobbies in Brussels, of Corporate Europe Observatory. But also Tax Justice Network on Anglo-Saxon tax havens that capture the lion's share of tax evasion. And there is also essential information thanks to Reclaim, Oxfam, Greenpeace, US Right To Know, Judicial Watch, Ecowatch, Transparency International, Amnesty International and Public Eye, or independent media specializing in data analysis.


Interview by Laurent Ottavi.






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can we trust official figures?…"no"……...


BY Myret Zaki 


Is economic information in developed countries objective and complete? Can we trust official figures, annual reports, financial communication? The answer isn’t an obvious «yes», but rather a qualified «no», as I show in my latest book, «Economic Disinformation» (just published in French by Editions Favre). Here are some key takeaways from the book.


First, there is the observation that economic data such as GDP, inflation or unemployment is a key conveyor of power and performance among countries, but also companies. It is at the core of any investment pitch. This tilts the choice of statistical methods in favor of the most flattering measures. Window dressing and communication have penetrated economic information, where marketing rivals reporting.

Unemployment leaving out the discouraged

Switzerland, for example, boasts full employment, with a rock bottom unemployment rate of 2,5% (end of February), according to the Staatssekretariat für Wirtschaft. But this figure leaves out many things such as the increase in temporary contracts, structural unemployment of older people, underemployment (at an 18-year high), and most of all, it leaves out discouraged job seekers who reached the end of their benefits and are no longer registered with a regional employment office. Europe and the U.S. are also analysed, showing that the same underestimation issues affect unemployment figures in all major economies.

Inflation is perhaps the most socially sensitive figure. On its basis, salaries are adjusted. If the methodology underestimates actual price increases, this single figure can be the source of social instability. In Switzerland, the EU countries and the U.S., the CPI (Consumer Price Index) methodology doesn’t provide a cost of living index. It only claims to be a price index. Basic premises are that consumers, when prices increase, adapt their habits and buy less costly equivalents (substitution method), and gain quality (or price decreases) when technology evolves (hedonistic method). 

The book challenges both premises and discusses how little they account for losses in choice and quality of life, and how forced expenses for unnecessary technological options are overlooked (i.e. too many features nobody uses). I also discuss at length the specifically Swiss issue of the soaring insurance premiums that are excluded from the Swiss CPI, and what issues it raises, especially for low-income households.

Annual reports and their knock-out effect

Company reports are not immune to forms of embellishment. They are not only the place of faithful reporting but are also carefully crafted to be a sales argument for investors. Typically, a report by a blue chip company can reach 500 pages, come in separate downloadable sections, conveying an impression of overwhelming exhaustivity and transparency. 

Yet it can have poor informative quality and be packed with legal and marketing language. Very technical disclaimers can eat up huge space and drown more essential information. Environmental, social and governance sections enhanced by sophisticated graphic design strike a promotional chord, yet can be contradicted by independent NGO reports showing that the company’s ESG score isn’t nearly as rosy as depicted.

Another example: For several years, we’ve been having 1% mortgage rates in Switzerland for a 10-year-loan. One would think that buying property has never been so easy. Yet the rate is largely misleading. Financial conditions are tougher than ever. To qualify for a mortgage with an interest rate of 1%, a customer must be able to cover a 5% theoretical rate. According to the bank Raiffeisen, in order to acquire a 1-million-CHF-property with 200’000 CHF equity capital, one must earn an annual income of 176’000 CHF.

Residential real estate prices are up by about 50% over 10 years. For an 800’000 CHF flat, a buyer needed to earn 140’000 CHF in 2011. Today, the same flat costs 1,2 million CHF, and the buyer would need to earn 200’000 CHF. As a result, an increasing number of households are excluded from property, which is the main source of savings, and they pay more on rents, which is bad news for general prosperity.

Stock markets aren’t household wealth

Another typical disinformation is to suggest that when stock markets go up, households get richer. A press release from the Federal Reserve said in 2020 that thanks to the stock market, «household wealth reached a record in Q2». Actually, only 10% of Americans have exposure to the stock market. They own 90% of stocks. The other 90% of Americans are little or not at all impacted by stock gains. They depend on salaries, which have undergone a massive relative loss of purchasing power. In Switzerland, pension funds haven’t gained much from the stock market rise: only 1% to 2% of performance went to the insured capital, while the rest went to longevity reserves.

One chapter deals with the quality of information spread by journalist consortia about tax evasion and money laundering accounts leaked from offshore jurisdictions. We’ve had Offshore Leaks, Swissleaks, Panama Papers, Pandora Papers, and Swiss Secrets. But the problem lies in the source: who hands those thousand gigabytes of data to newspapers? How to be sure about data integrity? Why are those affairs exposing only small jurisdictions such as Switzerland (exposed twice in the course of 7 years) Panama, Malta, and Middle Eastern kings and Russian oligarchs, but never major jurisdictions like London or Delaware, or US congressmen, generals and spies? Could the sources of the leaks be governmental, such as in the HSBC case (French government) and in the Credit Suisse spy case (German government)? 

The only conclusion can be that if an investor, saver, entrepreneur or analyst wants to be informed and inform others correctly, it is imperative to cross-check information, diversify sources, complement statistics with other indicators, question methodologies, and never take any institutional information for scientific truth.

(Source: Désinformation Economique, 2022, Editions Favre.)










Myret Zaki (born February 10 , 1973 in Cairo , Egypt) is a French-speaking Swiss economic journalist , editor-in-chief of the economic magazine Bilan [ 2 ] from 2014 to 2019. She is the author of several books related to financial news, mainly Swiss and American. She positions herself politically as a defender of liberalism [ 3 ] .


Her father, a political scientist , was editorial staff director of Egyptian national daily newspapers (Al Akhbar , Al Ahali), while her mother is an interpreter at the UN. Myret Zaki has lived in Geneva since 1981. In 1997, she made her debut at the Geneva private bank Lombard Odier Darier Hentsch & Cie, where she trained in financial analysis . In 1998, she obtained an MBA from the Business School of Lausanne.

Stéphane Benoit-Godet hired her in 2001 for the economic section of the newspaper LeTemps. From 2001 to October 2009, she directs the financial pages and supplements of the Swiss daily Le Temps. In October 2008, Myret Zaki published her first book, UBS, les dessous d'un scandale, a book on the UBS bank , placed in difficulty by the American authorities in several cases of tax evasion in the United States and especially by the subprime crisis. Myret Zaki won the 2008nSwiss Journalist Prize  from Schweizer Journalist.

InJanuary 2010, she became deputy editor-in-chief of the magazine Bilan . In February of the same year, she published Banking secrecy is dead, long live tax evasion [ 6 ] . In this book, she exposes the economic war which led Switzerland to abandon its banking secrecy , while the Anglo-Saxon financial centers still attract tax evasion from the rest of the world with impunity, thanks to their tools (trusts, -screens, fiduciary arrangements) superior to Swiss banking secrecy. She explains that tax evasionhas become a luxury item, with only the wealthiest being able to afford an “escape permit” in the form of expensive and opaque arrangements to conceal their assets in Anglo-Saxon jurisdictions.

In 2011, she published The End of the Dollar [ 1 ] which predicted the end of the reserve currency status of the American currency because of its prolonged devaluation and the monetary drift of the United States Federal Reserve [ 2 ] . theDecember 3, 2011, she spoke at the conference The State and the banks, the underside of a historic hold-up [ 7 ] with Étienne Chouard , during which she explained how speculative attacks contributed to the destabilization of the euro zone , including failure is one of the conditions for the survival of the dollar.

In 2014, she was appointed editor-in-chief of the economic bimonthly Bilan , she replaced Stéphane Benoit-Godet from November 1 , called to take the helm of Le Temps [ 8 ] . After an unsuccessful attempt to buy the title from her publisher Tamedia , she left the editorial staff of Bilan in the spring of 2019 [ 9 ] .

It sheds light on the mechanisms of protectionism in times of economic war , and considers free trade as a utopia [ 10 ] .


(Translation by Jiules letambour)




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