On the prowl for insight into economists
The folks over at The Daily Reckoning are on a mission. Their treasure? Insight. Insight into why it is that the smartest economists in the world are so stupid. Incidentally, they hope to understand why the GDP is such a fraudulent measure of prosperity
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It’s obvious that you can change the assumptions a bit and change the reported unemployment rate a lot. When statistician John Williams looks at the data, for example, he comes up with a real unemployment rate of 23% — almost as high as the jobless rate in Spain.Skip to next paragraph
Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).
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And yet, the BLS tells us that US unemployment is 8.2%. Not €˜around 8%.’ Not ‘less than one in ten.’ But 8.2%…exactly. And yet, there are so many slippery assumptions lurking in the shadows of this number that it is completely unreliable and practically meaningless. Or worse. It pretends to tell you something…but once you have taken it in you know less than you did before, because what you think you know is largely a fraud.
You could take almost any number used by economists and do the same analysis. Each digit masks a wart…a crease…a frown.
Probably no numerical grease is thicker and less transparent than the GDP. There, the numbers dissemble and mislead, just like economists’ other numbers. But it’s worse than that. The GDP concept itself is a deceit; not just vanity…it is fraud.
Here’s a story from the New York Post:
They take a limousine to McDonald’s, own his-and-her Segway scooters and have designed their new house with 23 bathrooms, each equipped with Jacuzzi tubs.
Time-share magnate David, 77, and his beauty-queen trophy wife, Jackie, 46, were already Orlando’s gaudiest couple when they decided to open their doors to filmmaker Lauren Greenfield as they broke ground on a 90,000-square-foot monster home with a 120-foot Grand Hall modeled after France’s Palace of Versailles.
It’s bigger than a 747-jet hanger. Designs include three swimming pools, 10 kitchens, a bowling alley, a skating rink and a garage that fits 20 cars. The home’s mahogany doors and windows alone cost $4 million.
“We never sought to build the biggest house in America,” Jackie says in the film, titled “The Queen of Versailles.” “It just happens.”
It has been described as tacky, trashy and tasteless, with the top three floors inspired by Las Vegas’ Paris Hotel.
Trashy? Tasteless? Hey, it added to the GDP!
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