If the GDP is Up, Why is America Down?

[54anickel]

http://www.theatlantic.com/politics/ecbig/gdp.htm

This is an interesting look at GDP from back in 1995. Much of what the author brings to light still holds true, maybe even more so under Shrub.

snip>
This strange gap between what economists choose to measure and what Americans experience became the official conundrum of the campaign season. "PARADOX OF '94: GLOOMY VOTERS IN GOOD TIMES," The New York Times proclaimed on its front page. "BOOM FOR WHOM?" read the cover of Time magazine. Yet reporters never quite got to the basic question- namely, whether the official indicators are simply wrong, and are leading the nation in the wrong direction.

The problem goes much deeper than the "two-tiered" economy--prosperity at the top, decline in the middle and at the bottom--that received so much attention. It concerns the very definition of prosperity itself. In the apt language of the nineteenth-century writer John Ruskin, an economy produces "illth" as well as wealth; yet the conventional measures of well being lump the two together. Could it be that even the upper tier was--and still is--rising on the deck of a ship that is sinking slowly into a sea of illth, and that the nation's indicators of economic progress provide barely a clue to that fact?

snip>
The GDP is simply a gross measure of market activity, of money changing hands. It makes no distinction whatsoever between the desirable and the undesirable, or costs and gain. On top of that, it looks only at the portion of reality that economists choose to acknowledge--the part involved in monetary transactions. The crucial economic functions performed in the household and volunteer sectors go entirely unreckoned. As a result the GDPnot only masks the breakdown of the social structure and the natural habitat upon which the economy--and life itself--ultimately depend; worse, it actually portrays such breakdown as economic gain.

Yet our politicians, media, and economic commentators dutifully continue to trumpet the GDP figures as information of great portent. There have been questions regarding the accuracy of the numbers that compose the GDP, and some occasional tinkering at the edges. But there has been barely a stirring of curiosity regarding the premise that underlies its gross statistical summation. Whether from sincere conviction or from entrenched professional and financial interests, politicians, economists, and the rest have not been eager to see it changed.

much more...

Here is a link to a page regarding the GPI Atlantic that they started working on back in the 90's. The effort is still very much alive!
I would be very interested in what Kerry's take is on it.

http://www.gpiatlantic.org/

[unblock]

1. some excellent points. gdp is a 'gross' statistic

start with a reasonable economy.
now consider one with higher overall gdp, but with fewer jobs, more debt, lower quality goods, fewer luxury and recreational goods, but much more people spending money on anti-depressants and therapy.

overall, more money is circulating, but it's financed by consumers going deeper into debt, getting depressed, and spending money on things they'd rather not need.

the bigger economy sucks, in that case.

this is quite aside from simple regional, industry, or class differences.

2. Good article

The question is,wouldn't someone as clever and resourceful as shrub do everything to make the headline figures related to GDP look good?

ENTER "Fannie and the McMansions"

[54anickel]

3. Yes, he will be able to make his numbers sound good, already has. I

posted this in another thread that you gave the same response to.

http://www.theunionleader.com/articles_showa.html?article=34017