New York Times economics fail

In a sidebar about the GDP figures:

\”The fact is, companies clearing out their warehouses boosts G.D.P., but doesn’t do much for those out of a job.\”

Something of a pity that the article itself is actually about how the restocking of warehouses boosts GDP…..and about how previous company clearing out their warehouses contributed to the decline in GDP.

Remember this when you next read an NYT editorial on how the economy should be run. At least some of the people at the newspaper really have no idea what they\’re talking about.

One comment on “New York Times economics fail

  1. Insofar as I know, GDP includes virtually everything for which payment has been made. It’s roughly indicative–but not very descriptive–of the size of an economy and of how it compares with preceding years (especially to the extent that money sums are adjusted for inflation).

    What it does not do well is convey some idea of actual productivity and how completely it may subsume, as increases, what are actually adverse movements in that quantity. Most obvious is a blithe disregard for what Bastiat had described in the 1700s; good common sense is perfectly capable
    of appreciating that, if you’ve have to expend a ton of actual treasure and divert human resources to burying the dead (and no longer capable of production–carrying on with their previous production) and replacing tons and tons of real stuff that’s been destroyed or damaged, due to some natural catastrophe (or an unnatural one such as 9/11), GDP will be an unreliable indicator (and increasingly unreliable the greater has been such incidence). In a like wise, every employee added to a public payroll constitutes an increase in GDP, whether anything worthwhile is done by said employee or not; increases in either (or both)
    taxes or expenditures will tend to increase the figure if only because it will (presumptively) require more hands employed (thus justifiably) to collect and/or spend the loot.

    Just think about it a moment, folks. In the past century, from a world population characterized by regular starvation over vast areas and an even more widely-spread primitivism, squalor, and privation–and, through a century of almost unimaginable loss of life and property and the resources squandered in war and other systematic
    destruction–the world, LED ENTIRELY BY THE
    “ADVANCED, CAPITALISTIC (when they were of a mind), INDUSTRIALIZED NATIONS OF “THE WEST”–have enabled, yet, a TRIPLING of the population, concomitantly with vast reduction in starvation (to a point where it’s a problem chiefly of peoples beset by local or regional conflicts) and the ravages of disease–yet with vast increases in standards of living, whether evidenced by clean water, by calories available for consumption, by the proliferation of roads, buildings for industry or habitation, by the prevalence of electrical power and the lighting and appliances thus serviced, and by the ubiquity of (physically) high-class communication (radio, TV, telephony), whether employed for practical purposes or for entertainment.

    Merely in the latter half of this already-improved
    century of progress (due, mainly, to the “miracle” of digital computing and accompanying strides in miniaturization of electronic circuitry), the productivity of labor in general has increased
    greatly, another tripling (though only on average–between the high and low ends of such advance).

    And where have we got with all such advance? Not far–as far as I can see, from my, admittedly, provincial and limited experience and viewpoint.
    Though not, technically, involved in great wars, the world is even more greatly beset by the tensions that generate such conflict than at any time in the past and, albeit emanating from other than the most populous and war-capable nation-players, the rattled sabers are transmogrified to threats (or implications) of nuclear, chemical, and biologic weaponry–potentially wielded by fewer and more loosely organized forces: a single crazed suicide can wreak enormous havoc.

    When I look at the world condition, I freely confess amazement. What was wanted, we were assured (and, by and large, believed) was more “international cooperation” to reduce and eliminate the tensions leading to beligerence: more organizations, more agreements, treaties, harmonization of legal and fiscal regimes, even something thought of as “international law” to which right-thinking people, everywhere, would
    eagerly agree. Well , we’ve got all those things and what they’ve wrought. Working out for you? What can possibly be wrong with a place where the best and brightest spend so much time and attention on making and enforcing laws dealing with the specifications of rubbish containers and the niceties of separated recyclables. And where international conferences and thousands of tons of trees (in the form of newsprint) are devoted to emotion-laden expounding on whether Earth
    will become inhabitable because the people in it are bound to irreparably degrade its atmosphere?

    When I was a kid (I’m 73), kids were everywhere–in rural areas, small towns, suburban areas, or big cities. And that despite the fact that, for at least half of those growing-up years, a great portion of able-bodied men were away, in the military, engaged in one or another conflict. Since
    about 1970, far fewer are so engaged–plus, there are more people to begin with–just not very many kids, or least not very many visible outside, playing, as all kids seemed to be when I was one.
    I’m not going to cite demographic figures–those interested can look ‘em up (or likely, already are aware). The real question is: “Why?” (And, with the implied question as to whether we like it or not and, if we don’t: “What can be done about it?”

    (To be continued at indeterminate later time.)

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