Richard Black is a know nothing cretin

Why in fuck do we have to pay taxes to pay the wages of morons like this?

\”GDP is quite simply a measure of all the money we spend on all the stuff we buy – every financial transaction that takes places in the economy, all that adds to growth,\” says Andrew Simms, a fellow of the New Economics Foundation (Nef) and author of several books on the subject.

Dear God. Look, taking advice from Andrew Fucking Simms is a sign of idiocy in itself. But more than that, GDP is not a measure of financial transactions. It is a measure of value added in the market portion of an economy.

Just as an example, the purchase and or sales of shares is a financial transaction. It\’s also a financial transaction that is not included in GDP measurements. Or, just to make it simpler so that even a BBC journalist can understand it, let us look at currency. Trade, financial transactions in currencies, is some $1.5 trillion or so a day in London alone. UK GDP for the year is about £1.5 trillion. Sure, in theory, if the $ to £ exchange rate is the 250:1 of the number of trading days in the year then FX trading could be included in GDP. But given that the rate is more like 1.5 to 1 then what is this fucking moron bleating about? GDP does not measure transactions, it measure value added in transactions. You Moron.

But Black is the idiot who keeps on giving. Given that he has no clue what he is talking about he just stumbles into ever greater error. To drivelling, moronic, idiocy. And have I mentioned that we are forced to pay taxes for his wages yet?

Oxford University economist Dieter Helm has just been appointed to lead the UK\’s Natural Capital Committee.

Its role is to assess the financial worth locked up in trees, clean water, insect pollinators and every other part of the ecological kingdom, and present this set of accounts to the Treasury – which should then be able to make better informed decisions.

It\’s worth recalling that the UN-backed Economics of Ecosystems and Biodiversity (Teeb) project calculated the value of forest lost globally around the world at $2-5 trillion (£1.3-3.2 trillion) each year.

Yes, that is indeed excellent. We really should take a stock, not a flow view of such matters. We really should look at how much capital (whether natural or not) we are using to produce the current value add or income. Last time I looked at such numbers the OECD country which was pissing away the future the most was Norway. \’Coz they\’re pumping up all that oil, see? But as I say, sure, excellent, we should look at both the stocks and the flows. Or, to move from economic terms to accounting ones, at both the profit and loss account and the balance sheet, the capital position. Which is where fuckwit (have I mentioned that we pay for this ignorant yet?) Mr. Black goes wrong yet again:

Criticisms of GDP include:

* it measures \”bad stuff\” as well as \”good stuff\”
* it\’s a short-term balance sheet that pays no heed to longer-term factors such as a build-up of debt

No, you Godawfully ignorant tosspot. Your complaint is that GDP is not a balance sheet of any kind at all: it is purely and solely a P&L.

P&L\’s have their place: as do balance sheets. Both are useful depending on what it is that you wish to divine.

My problem now is, why are we forced to pay taxes to fund the salary of one so ignorant as this? Given the sheets and wankstains references already given, wouldn\’t it have been better if the perpetrator of this nonsense had been left as one after the grunting and sweat of their creation? Rather than being grown to spray his ignorance on the face of our society and then have the effrontery to charge us our own £sd for the privilege?

16 thoughts on “Richard Black is a know nothing cretin”

  1. The saddest thing is that the NEF world view will continue to dominate. We have lost – I tested their multiplier model, it doesn’t work and makes little sense. (By test I mean conduct real research, collect real data and apply their model – something they’d never bothered to do). But hey, they’re great, they’re green and they have friends in the BBC! They must be right!

  2. I think you’ve been far too kind to Black… He is the most demented warmist activist in the media and not to be trusted one little bit. He’s the sort to piss on your shoes and tell you it’s raining.

  3. Would also be nice if we could stop quoting debt vs GDP. Debt is a stock, not a flow.

    No measure is perfect. GDP is an indicator, no more. It should not be taken in isolation from other measures. That’s really my objection to proposals that the MPC should target nominal GDP. It should not be targeting a single measure at all – it should be looking at ALL the major indicators.

  4. At least he capitalised Nef. I always find it amusing when people ignore the wishes of non-standard capitalisation rebels.

    However, as the reigning king of the internet pedants…

    have I mentioned that we pay for this ignorant yet?

    How, Tim, how could you miss the opportunity to use the word “ignoramus”? Fie on thee, and turn in your crown.

  5. Many years ago I invested in an Australian conservation company which took advantage of a change in accounting law to record a ‘book value’ for all its trees, bushes, platypuses, wallabies and numbats. It made their balance sheet look pretty good, till they went broke and we lost the lot. The numbat market is pretty illiquid, I discovered.

    Looks like the UK might be heading in the same direction.

  6. ” why are we forced to pay taxes to fund the salary of one so ignorant as this? ”

    Because the BBC is not, in any circumstances, an honest news provider. It is purelt and simp,ly a corrtupt, totalitarian state propaganda organisation willing to tell absolutely any lie and censor absolutely any fact in the state parasite cause.

    They ain’t gonna use our money to hire anybody to tell the truth are they?

  7. I don’t know who you but I like your style. However your post doesn’t indicate to me that you know what GDP is either. The idiot politicians and equally idiotic economists will tell you GDP measures how the economy is “growing”. i.e. a higher GDP = more economic “growth”. This is rubbish. Actual growth is winning the battle over scarcity – economic growth is when I can get more stuff for my 8 hour day than my great great grandfather could 100 years ago. Economic growth cannot be measured by measuring transactions or dollars. GDP as a measure of economic growth is a complete nonsense and all the politicians and economists who talk about it in this way deserve an uppercut.

  8. Hi Tim –

    As always, a nice rant. 🙂

    For the others: GDP is one aspect of what an economy produces in a set time period, as defined in the national accounting guidelines set up in the National Income and Product Accounts.

    GDP is the market value of all FINAL products and services produced in a year. Intermediate products are removed via standard accounting methods to avoid double-counting.

    Failing to understand that this is the most accurate and convenient way of measuring economic activity and, since the NIPA also includes national incomes, a gosh-darn good measurement of how much people are earning (a rather nice proxy for how well they are doing), means that you richly deserve the opprobium that Tim is rightfully dishing out.

    There is one further aspect to be mentioned that is sorely neglected: where all the value is being generated, i.e. the supply side of the economy. But the mere mention of supply-side brings out the raving maniacs, so I’ll just leave that be…

  9. John O, you say “this is the most accurate and convenient way of measuring economic activity”. I agree. That was my point. How is economic activity the same thing as economic growth? Measuring transactions or dollars, or even the quantity of stuff produced is, at at very best, a very poor proxy for economic growth. There could be (and there usually is) many reasons why people produce and spend or invest more, not least of which is availability of credit (including at artificially low interest rates). If anyone here thinks economic activity is representative of economic growth I’d like to hear how that is so. And then when you realise I’m right I’d like to know why the govt and the economists aren’t trying to develop a measure that actually measures economic growth (although I suspect I already know the answer to this).

  10. To make an accurate assessment of the worth of things like forests, pollinators etc. is probably impossible given that not all forests are cropped, and not all plants, including crops, need pollinators. Much information will come from models based on assumptions (guesses). So I expect there will a many page report saying nothing important which government will use to formulate more poor decisions and policies.

  11. What I know about the govt’s and most economists’ measurement of GDP as an indicator of economic growth is this: GDP just measures how much money people are throwing around (including in part for investment). Did you notice in the last few weeks they came out with the March quarter economic growth (ie GDP) was 1.3% fuelled mainly by an increase in consumer spending? All this means is that more people spent money at the shops buying toasters and stuff, and from this the govt and stupid economists conclude that the economy has grown. What they really should conclude is that the amount of spending in the economy has grown. I can see why some (simple) economists might say that if people are buying more stuff then someone has to be making more stuff etc so that means the economy is more productive. However this logic has a massive hole in it and that hole is that people could very well be buying more stuff because the govt has printed money and handed it out, or they may have borrowed because credit might be easy/interest rates low, or maybe there is just a burst of confidence. None of these things represent economic growth, just growth in spending, which is not the same thing (obviously).

    As I’ve said before, and it’s quite a simple and obvious point, measuring how much money people are spending does not measure economic growth. If the bloody economists want to actually earn their salaries they should be working out a way to actually measure economic growth – but they won’t because such a measure would not suit either the govt or the economists. In actual fact, an advanced economy like ours grows very slowly (compared to the GDP numbers we are used to seeing during a credit expansion boom) and if they devised a proper measure for economic growth there would not be much to talk about and worse still for the govt it would show that the govt can’t actually make the economy grow. A proper measure of growth would expose that govt “stimulus” and low interest rates and easy credit do not grow the economy. As long as they have us believe that GDP measures economic growth all the govt has to do is get people to spend more (or even just spend more themselves) and they can point to economic (fake) growth.

    The mechanics of the macroeconomy and economic growth are really quite simple but ironically also very poorly understood, even including by Nobel Prize winning economists like that fool Paul Krugman.

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