OBAMA WHITE HOUSE IS IN FOR A NASTY SURPRISE

By John Crudelle

SO, the president-elect thinks the economy will get worse before it gets better. As refreshing as his candor is, Barack Obama really doesn't understand what he's up against.

Put your ear real close to this column. There are some dirty little secrets I'm going to tell you that I don't think anyone in the Obama Administration should hear.

Here goes: unless the incoming president quickly gets his act together we are going to be hearing the word "depression" a lot next year and he will - in a very short period of time - be as unpopular as the guy leaving the job.

Why is this a secret? Because the folks in Washington just don't seem to deal well with reality.

And their ideas? Phew, they just don't live in the real world! Don't get me wrong. I'm certainly not wishing this on us. And I don't even think I'm telling you anything you don't already know.

But they don't know it.

Last week Federal Reserve Chairman Ben Bernanke, a scholar of the 1930s Big-D, scoffed when a reporter asked him during a news conference if we're headed for horrible economic times.

The Fed head pointed out that the unemployment rate reached 25 percent during the Great Depression and the job market only revived because we had to spend a lot of money to fight the Germans.

Here's what the Obama White House should - but won't want to - know.

Right now, the unemployment rate would be more than twice as bad if you go back to the way this figure used to be calculated.

In 1994 the Clinton White House decided that the unemployment rate needed to be modernized.

So anyone who had been out of work for at least a year was no longer counted as unemployed - they were just too lazy and discouraged to find work.

Those clever Clintons also changed the way the questions were asked, so that more people would drop out of the unemployment statistics.

John Williams, an economist who tracks this stuff on his Web site ShadowStats.com, says today's unemployment rate would be 16.5 percent if we went back to the old way of measuring it.

As it stands, the government announced last Friday that the jobless number climbed 0.2 percentage points to 6.7 percent in November, when an astounding 533,000 positions were eliminated.

And the Labor Department also corrected the previous two months - now admitting that nearly 200,000 additional jobs disappeared right before the election.

The broader unemployment number that the Department does produce - called the U-6 - rose to 12.5 percent in November from the previous month's 11.8 percent.

This figure includes people who want to work full time but can only find part-time gigs.

There's a certain irony in the fact that Obama, the first Democrat to win the White House in eight years, is going to be deceived by employment numbers that were first fudged by the last person in his party.

Here are a few things Obama should know and maybe contem plate for a while.

The new presi dent thinks re building the na tion's infra- structure is the kind of stimulus the economy needs to start cranking again.

But will any of the workers fired last week by, say publisher Houghton Mifflin, DuPont, Viacom, AT&T, Avis and dozens of other white-collar heavy companies, really want to pour cement, dig ditches and engage in the brutal tasks that repairing roads and bridges will create?

When Roosevelt created jobs with infrastructure stimulus in the '30s, America was a blue-collar society that employed mostly men.

We, white-collar prima donnas, aren't going to benefit from this program, no matter how many billions the government spends.

But a lot of illegal workers willing to work hard should do quite well. We'll be getting thank yous soon from the Mexican government, which could benefit more from this than Nafta.

- And the American job situation is worse than anyone can imagine.

Last Friday's disastrous labor numbers included 30,000 jobs that the government thinks were created by companies too small to count.

This is called the Birth/Death calculation. But don't count on these positions really existing.

This is a Labor Department trick: Count the numbers in the current month and subtract them later when the shock won't be so great.

January is the only month when this birth/death model deducts jobs from the monthly count. So the job figure coming out Feb. 6 - just weeks into the new administration - could be mind bogglingly bad.