GDP Indeed!
Wed., May 14, 09:01 AM
As you know, I just love it when someone publishes a cartoon that illustrates what I’m talking about. Just when I think no one is listening. Today’s New Haven Register had such a cartoon today, showing Mr. Dubya, having run his auto (captioned Economy) straight into a tree and remarking “It’s just a slowdown.” Unfortunately, I cannot yet find that cartoon online, so you’ll have to be content with this Speed Bump.
Anyway, right under the cartoon was a letter to the editor, and I include the text because they don’t print that online either.
The article “GDP defies definition of recession” was so unbelievable that I reread it several times, trying to make sense of it. I believe that using the gross domestic product to measure the state of the economy is inaccurate, to say the least.
As long as prices go up, the GDP will rise. If consumers continue to buy goods at inflated prices — whether or not they actually have the money for it — the GDP will rise some more. Maybe they should subtract the amount of personal debt to get a more realistic picture.
We all know people have lost jobs. Some have been laid off by companies that posted a significant increase in earnings. (That is undoubtedly an accountancy trick to make the stock look more desirable.) Don’t forget that, if a worker can’t find another job before his unemployment benefits run out, he will fall out of the statistics. There’s nothing like seeing news that unemployment has gone down on the same page as a notice of yet another factory closing.
A quick look at the legal notices demonstrates that the number of foreclosures is higher than ever. How many homeless and unemployed people does it take to define a recession?
In the long run, it doesn’t matter what you call it. Nearly eighty years ago, after the stock market crashed, a president tried to reassure the citizens by saying this was not a recession, “…just a slight depression.” I had hoped we were all a little smarter by now.
Of course, we all know the Great Depression is ancient history. Despite the saying that those who ignore history are doomed to repeat it, our so-called experts will continue what I was taught to call word-smithing. Or, if you prefer, call it lying via statistics.
Theoretically, of course, the letter belongs to the newspaper but, as I said, it's not in the online version. But it still belongs to me, ’cause I wrote it.
