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Sweeping MSM news stories, feature articles and posts, primarily elsewhere in the blogosphere, have formed a perfect storm over the past few days that, IMHO, force the objective observer to comprehensively confirm many themes about our recovery that not only run counter to the conventional wisdom, but also tell us that, essentially, things aren't nearly as good out there as some have been led to believe; yet many are denying these truths, both here and as they relate to primary talking points throughout the Democratic Party.  Specifically, I'm talking about:

1.) The reality that focusing upon Gross Domestic Product (G.D.P.) as a meaningful indicator of anything socially or economically of benefit to our country's well-being is a waste of time. Yet, it is the primary focus of many armchair, wannabee economists' claims of economic recovery, even here and now; never minding the fact that our government and hundreds of our leading economists have been (in many cases, inadvertently) misdirecting us for decades into thinking that it's the greatest statistical indicator of our society's health, when nothing could be farther from the truth. (See: "The Rise and Fall of the G.D.P.")

2.) In fact, as Jon Gertner's article in this weekend's NY Times Magazine, linked in the previous sentence, so brilliantly reports it--and it's nothing less than one of the most important reads on our economy of the past few years IMHO--Joseph Stiglitz is at the forefront of  a highly popular, worldwide movement that supports the concept that much of the quantitative bullshit that we misdirect our focus upon these days, politically, to confirm our economic well-being, is little more than that. The simple, inconvenient truth is that the stats we hear from our government are primarily political in origin, since our economic health is much more accurately reflected in a far more complex, broad-based set of flexible statistics that simply cannot be boiled down into a 30-second elevator speech or monthly photo opp.

The Rise and Fall of the G.D.P.
New York Times Magazine
May 10, 2010

...Government not push any equivalency between an expanding G.D.P. and national progress. For them, G.D.P. is what it is and nothing more: a description of total national production that can be helpful when setting economic policy. The longtime tendency of politicians to use G.D.P. as a proxy for national well-being is not a practice the Bureau of Economic Analysis endorses or could necessarily control, even if it wanted to. That the Obama administration, for instance, has pointed to rebounding G.D.P. numbers rather than our unusually high unemployment numbers reflects a political calculation rather than a case of economists beating a drum for the glory of G.D.P...


Several times last fall, I visited Stiglitz's office at Columbia University, where he is on the faculty, to talk about the shortcomings of G.D.P. Sometimes we chatted about accounting issues -- why he thinks G.D.P. creates a distorted representation of our economic lives, for instance, and how that might be remedied. In his view, Americans would have had a much clearer picture of our progress over the past decade if we had focused on median income rather than G.D.P. per capita, which is distorted by top earners and corporate profits. "When you have increasing inequality, median and average behave differently," Stiglitz said. Real median household income has actually dipped since 2000. But G.D.P. per capita, he noted, has gone up. A president could go on the podium, Stiglitz said, and point to G.D.P. as proof that Americans are doing very well. But if you looked instead at median income, he said, "you could say, a) it's not sustainable; and b) most people are actually worse off." We need to focus on those median figures, he insisted...


...Stiglitz and his fellow academics ultimately concluded that assessing a population's quality of life will require metrics from at least seven categories: health, education, environment, employment, material well-being, interpersonal connectedness and political engagement. They also decided that any nation that was serious about progress should start measuring its "equity" -- that is, the distribution of material wealth and other social goods -- as well as its economic and environmental sustainability. "Too often, particularly I think in an American context, everybody says, `We want policies that reflect our values,' but nobody says what those values are," Stiglitz told me. The opportunity to choose a new set of indicators, he added, is tantamount to saying that we should not only have a conversation about recasting G.D.P. We should also, in the aftermath of an extraordinary economic collapse, talk about what the goals of a society really are...

Meanwhile, these sentiments are being further confirmed as some now take a second look at those that have been proponents of the "everything - we - know - about - our - economy - is - wrong" school of thought.  A closer investigation of that minority viewpoint, as personified by Shadow Stats' John Williams in, "Meet the Economist Who Says the Government's Economic Numbers Are Lies," demonstrates that many of the criticisms of Williams' findings are little more than ad hominems.    

3.) You see, this was the week when it became just a little more plausible to say that our nation's financial sector is completely dysfunctional. In fact, IMHO, as Delaware Democrat and U.S. Senator Ted Kaufman--perhaps the only person in our nation's legislative branch with a spine--reiterated it, Wall Street has become downright dangerous, and there's nothing happening as far as the so-called financial reform effort on Capitol Hill is concerned that's going to make a damn bit of difference to correct that, going forward.  (See: "Senator Kaufman Was Right - Our Financial System Has Become Dangerous.")

4.) So, if decades of unbridled Wall Street greed haven't made you completely numb to these harsh truths about our Quiet Coup, the now-almost-daily, announced criminal investigations of our masters of the universe will just make you number.

Remember that can everybody claimed we were kicking down the road?

The truth is it's lying in a gutter about three blocks back.

As it now appears to be the case, week after week of late, we keep crossing over that intangible line some prematurely have called our tipping point, only to see the status quo spin that make-believe marker another week down the road. Yes, to this diarist, it's no longer "the can" that's being kicked down the road; it's our society's tipping point.

When it's alright for Democrats to rationalize throwing 400,000 Americans per month (for the balance of 2010) out into the Main Streets of destitution because our taxpayer funds are tied up fighting wars in Afghanistan and Iraq one may only step back and ask: Are we completely numb to human suffering here at home?

Then again, as it was also reiterated this week, we're quietly, STILL, throwing trillions--not billions--at those very same Wall Street bastards that created this mess in the first place while our state governments reach new depths of depravity that we, as a society, haven't witnessed in, perhaps, centuries?

Late on Friday, a little over 12 hours ago, buried "just right" in this even greater travesty of a weekly news cycle, we learned the following:

Schwarzenegger: Eliminate Welfare and most Child Care, reduce Health Care
by CalculatedRisk on 5/14/2010 04:26:00 PM

From the SacBee: Schwarzenegger budget would eliminate welfare

Gov. Arnold Schwarzenegger asked lawmakers Friday to eliminate the state's welfare program starting in October and dramatically scale back in-home care for elderly and disabled as part of his May budget revision to close a $19.1 billion deficit.

[Schwarzenegger] also proposed cuts to state worker compensation.
Schwarzenegger proposed eliminating state-subsidized child care for all but preschoolers

...From the LA Times: Schwarzenegger unveils austere budget plan

Gov. Arnold Schwarzenegger outlined a stark vision Friday of a California that would no longer lend a helping hand to some of its poorest and neediest citizens, proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor.

His $83.4-billion plan would freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs.

During the press conference, Schwarzenegger compared California to Greece. Ouch.

Numb and number...

Originally posted to on Sat May 15, 2010 at 03:00 AM PDT.

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Comment Preferences

    •  While we disagree on 1 and 2, (6+ / 0-)

      we agree on 3 and 4.

      It remains a long and hard struggle ahead to make Washington work for average Americans.

      Inside the Beltway Villagers just don't get it.

      So, tipped anyway.  Peace, NDD

      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Sat May 15, 2010 at 03:42:43 AM PDT

      [ Parent ]

      •  How Greek of you (1+ / 0-)
        Recommended by:

        Greece's GDP growth has also, as an average, since the early 1990s been higher than the EU average. However, the Greek economy also faces significant problems, including rising unemployment levels, inefficient bureaucracy, tax evasion and corruption.

    •  The redeeming quality of California's (4+ / 0-)
      Recommended by:
      3goldens, Jagger, teloPariah, KingofSpades

      budget process is the Terminator can request all the programs he wants be terminated, but both houses are controlled by Dems who will never ever ever cut those programs completely. This is going to be another banner year for the California Budget process, I figure we might have a budget sometime in november, maybe.

      I can't even imagine the fight raging in the governors marriage right now either, my guess is Maria is probably none too happy with her hubby. As a Kennedy, being married to a man who want to take away children's health care and all the rest of the social service cuts, doesn't make for very good press.

      "If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy" James Madison 4th US President

      by padeius on Sat May 15, 2010 at 04:14:15 AM PDT

      [ Parent ]

      •  Alright (5+ / 0-)

        so the Democrats manage to avoid cutting the programs 'completely'.

        What then? The same system remains. What we are seeing is a pattern that is repeating all over this country and the world.

        It is a full scale attack on 'entitlements', pensions, unions, public employees and working people as a whole. It's an unprecedented (at least in my lifetime) transfer of wealth from the many to the few. And the momentum is building.

    •  Let's just get through the elections (0+ / 0-)

      before we debunk too much hopaganda...

  •  Sowing the seeds of the next crime wave (6+ / 0-)

    That is what happens when we push people over the edge.

  •  Most important diary up now. (17+ / 0-)

    Anyone who cares about human beings should be demanding that the Administration do more about reforming the economy, and eliminating this emphasis on GDP is a good place to start.

    Thanks for the links as always, bobswern.

    "Capitalism is irresponsibility organized into a system." -- Emil Brunner

    by goinsouth on Sat May 15, 2010 at 03:44:00 AM PDT

    •  It also wouldn't hurt (7+ / 0-)

      to include all of the jobless in the unemployment statistics. Just a third or less of the workforce 'qualifies' for unemployment compensation at any given time, though all (legal) workers pay into the system. Part-timers - no matter how many part time jobs they hold - and various minimum wage/get-by workers trying to fill in, lots of creative artists and support workers, self-employed, farmers, subcontractors, etc. get no unemployment when they are out of work, thus are made "invisible" to the political class.

      'Official' unemployment in my country is pushing 15%, but those are the factory jobs lost within the last two years. Those jobs lost to China or India over the last decade no longer count because the skilled workers can't get unemployment anymore and no new jobs are coming in. Young people who stay instead of migrating to cities don't qualify, their part-time minimum wage jobs don't count. Every time the price of gasoline goes up it costs the region a million or more tourists for the multi-billion dollar tourist industry (all we have left beyond agriculture) and more are out of work. We're 'depressed' in the best of times, 'sacrificed' when the economy turns bad.

      But people live here on purpose, often in meager or inherited 'steads where it's possible to grow some food and barter for goods and help each other survive. One can be 'richer' here by far living in poverty than one could be living in the same poverty in a city. We are all surplus population the government wishes would simply die. Their policies often appear to be aimed at that very thing. We don't blame it on brown or black people elsewhere. That is pure distraction from what's really wrong.

      Now, more than ever, we need the Jedi.

      by Joieau on Sat May 15, 2010 at 07:33:33 AM PDT

      [ Parent ]

  •  Bob, Bob, Bob. (8+ / 0-)

    If global corporations are well, so is the rest of the planet.  Who do you think me is?   Haliburton, KBR, Goldman Sachs?

    me & globe

    They're asking for another four years -- in a just world, they'd get 10 to 20. ~~ Dennis Kucinich

    by dkmich on Sat May 15, 2010 at 04:44:38 AM PDT

  •  What we're experiencing now (7+ / 0-)

    is the follow though of the biggest criminal administration in our history. BushCo has successfully gutted our wealth as a nation. We will not recover from it unless we can put the kind tough changes in place that came after the last "Great" depression. We better get smart and smarter fast or we're ancient Rome in flames.

  •  Kevin Phillips' 2008 book, "Bad Money" (8+ / 0-)

    didn't get as much play as I thought it would. Just thumbing through as I read your diary, he wrote that:

    Indeed, over five years, the housing sector seems to have provided some 40 percent of the growth in U.S. GDP.

    That didn't work out too well.

  •  Greece or California (5+ / 0-)

    it doesn't matter.

    Justice requires that we bailout those who cause the disasters and punish the vulnerable.

    The Gods, I mean markets, will become restive otherwise and send a thunderbolt that destroys civilization as we know it.

    •  I am laughing as I read this, but unfortunately (1+ / 0-)
      Recommended by:

      this seems to be very true. Add the UK to your list, job and social service cutbacks will come to those who did not cause this problem and they are going to pay dearly for the actions of the financial sector.

      No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable (Adam Smith, 1776, I, p. 96).

      by NY brit expat on Sat May 15, 2010 at 07:59:17 AM PDT

      [ Parent ]

  •  This diary exaggerates (1+ / 0-)
    Recommended by:
    New Deal democrat

    It makes some good points as well, but taken on the whole it's exaggeration and misunderstanding of national income statistics (and the debate about national income statistics) is a serious detriment.

    The government collects and disseminates information on broader measures or the data collected by the government can be used to create broader measures of welfare. To say that U3 is false, because U6 is higher than U3 (even though the two mostly track together) is to either misunderstand or to misrepresent.

    Stiglitz is right that GDP is an imperfect and incomplete measure. But it is not a false measure. It measures exactly what it purports to measure-neither more nor less.

    Data on GDP, U and the inflation rate help us to track the short term **aggregate** performance of the economy over the course of the business cycle. It is not and never was designed to be a national economic welfare measure-save for the fact that measuring recessions and growth periods can **help** us to achieve our goals.

    Finally, I do not think that voters vote on the basis of reported stats-so there is little incentive for the government to "falsify" the stats it reports, as you allege.

    The problem (or at least a large chunk of it) lies in misreporting by the media and misunderstanding by the public. Unfortunately, rather than clarifying these stats, you are promoting misunderstanding.

    GDP per capita is indeed an imperfect indicator: however it is used as a **proxy** because it correlates positively with many other broader indicators. I agree that median (along with average) income should also be reported. But there again, you will still be using a gross aggregate number.

  •  Blasphemy you doomer! (7+ / 0-)

    Don't worry, be happy!

    Turn that frown upside down!

    GDP is up.

    Unemployment is down.

    A trillion here, a trillion there,

    trillions of dollars everywhere!

    The Oil in the gulf, it'll all go away,

    let's not worry, until some other day.

    The CO2 is in the air, but it's nothing to see;

    Let's go fill up the tank, of our SUV!

    The future will be fine, with our heads in the sand,

    Lets sing Kumbaya, and all hold hands.

    Stop wishing for bad luck, and start knocking on wood,

    The bad is behind us, and ahead it's all good.

    Don't look at the bad, don't hear what they say,

    The glass is all full, and the sun shines all day.

    Keep our attitude positive, and a smile on our face,

    The good times keep coming, from all over the place.

    The world is so bountiful, the supply never ends,

    Let's get out our credit cards, and spend spend spend!

  •  Thank you, diary tipped and rec'd (4+ / 0-)

    I have been complaining about the use of GDP as an indicator of the state of economy for ages and I am really happy that you have raised this question. Reliance on GDP will only give you a very partial indicator to the health of the economy and says very little about the state of the vast majority of your citizens.  To understand the economic well-being of citizens, we need to look at a number of things to get an understanding of levels of long-term unemployment, short-term redundancies, distribution, and income and wealth inequalities.

    A classic example is an examination of Britain at the height of the industrial revolution, if you looked at GDP and revenue, without looking at the distribution of revenue (and income), you would have seen an extremely wealthy country that was growing economically. However, you would have little or no idea that the situation for the vast majority was horrific and had changed little and in some cases was worse (due to the elimination of skilled labour jobs and their replacement with unskilled low paid labour). This would only begin to change with the creation of strong trade unions, political enfranchisement of the working classes, and transitions in the labour markets that allowed workers to get increases in wages commensurate with increases in productivity.  

    No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable (Adam Smith, 1776, I, p. 96).

    by NY brit expat on Sat May 15, 2010 at 07:57:01 AM PDT

  •  Heck of a job bob. (4+ / 0-)
    Recommended by:
    claude, side pocket, 3goldens, bobswern

    That may sound sarcastic but I actually mean it. Keep it up.

    "The truth shall set you free - but first it'll piss you off." Gloria Steinem

    Save the Internet!

    by One Pissed Off Liberal on Sat May 15, 2010 at 08:03:42 AM PDT

  •  Thanks Bob, tipped and rec'ed (1+ / 0-)
    Recommended by:

    Professor Henry Louis Gates Jr. is wrong. No one forced any of the founding fathers to own people.

    by OHknighty on Sat May 15, 2010 at 08:15:07 AM PDT

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