Patterico's Pontifications

6/13/2014

GDP Includes People Getting Paid to Do Absolutely Nothing — Why Paul Krugman’s Love of GDP Is Wrong, Part Five

Filed under: GDP,General — Patterico @ 10:17 pm

It’s the perfect way to round out a week of posts documenting the flaws in GDP as a measure of the health of the economy.

The news report below opens: “Workers at a Missouri company are telling their story, after the government paid them to do nothing.”

You’ve probably heard about this before. The story broke a month ago. The company was supposed to process a giant influx of ObamaCare applications — but the expected flood never came. So the office was filled with employees who got paid to sleep and played games. The story today is that nothing has changed. In fact, they’re still hiring! And they pay overtime!

These people are contributing absolutely nothing to the economy. All they do is drain taxpayer money.

But their services are included in GDP.

If this company were being paid directly by consumers, they would go out of business, because consumers don’t pay money for nothing. But the government does.

This is the kind of stuff Paul Krugman wants more of. Won’t someone please give him another Nobel Prize?

Comments (88)

88 Responses to “GDP Includes People Getting Paid to Do Absolutely Nothing — Why Paul Krugman’s Love of GDP Is Wrong, Part Five”

Can we get Art Deco to come on here and explain why this is great for the economy and this just isn’t my area?
Patterico (9c670f) — 6/13/2014 @ 10:18 pm
If brilliant minds like those of Paul Krugman have their way, more of what’s going on in France will be more of what’s going on in the US.

redalertpolitics.com, John Rossomando, January 2014: Young Americans should look to France as an example of what the United States could turn into, if left to liberal devices. The country’s tax burden and government spending as a percentage of GDP are among the highest in the world — the average single French taxpayer paid an average of 50.2 percent of their total income in taxes in 2012, and total government spending in France accounts for 56.3 percent of that nation’s total GDP.

It has created a situation where unemployment has not gone below 7 percent since 1996.

For French youth, it’s even worse. The unemployment rate for that group in October stood at 25.8 percent — 10 percentage points higher than where it was in the U.S. during the same month, when it stood at 15.9 percent.

“People always paying the price are young people and low-skilled,” said Mercatus Center economist Veronique de Rugy. ”The cost of labor is so high that you need to have serious skills for an employer to want to hire you. People losing are young people and low-skill. The American Democrats still look at France or Europe as it was 25 or 30 years ago, not as it is today.”

That lines up with the experience of ordinary French people like my cousins, who have fallen victim to these crushing tax burdens and high unemployment. My young French cousin, for example, struggles to find work despite his certification as an electrician.

The French government provides generous entitlements such as paid leave for pregnant mothers, sickness benefits, disability benefits, old-age benefits and unemployment benefits, among others. DeRugy warns that should the U.S. adopt economic policies similar to those of France by expanding the welfare state, it would bode poorly for the lives of young Americans in the coming decades.

“It’s a vicious circle,” De Rugy said, noting the connection between high taxation, government spending and slow economic growth. “The economy is basically not growing and there are quarters where it is shrinking. [French President Francois] Hollande’s only response has been to raise taxes.”

France’s powerful unions also contribute to high youth unemployment by pushing for the same sorts of high minimum wages that Obama and the Democrats are currently pushing. The country’s minimum wage is among the highest in Europe.

Add up all of these shortcomings of French policy, and the country has had persistently anemic economic growth that has never exceeded 1.5 percent annually during the past couple of decades. Economic growth at that sort of level usually is seen as a warning of a recession and that the nation is incapable of lowering unemployment.

^ Throw in increasingly downwardly mobile demographics, not helped by people from historically impoverished societies taking advantage of the US’s porous borders, and we’re facing a wonderful, beautiful, humane, compassionate future.
Mark (75db68) — 6/14/2014 @ 7:04 am
Additional reading on the subject from the online Library of Economics and Liberty:

http://econlog.econlib.org/archives/2013/01/government_purc.html

Government Hiring: Raising GDP by Definition

…Hiring a worker who (through no fault of her own) accomplishes absolutely nothing raises GDP if the government does the hiring. Hiring a worker who (through no fault of her own) accomplishes absolutely nothing does nothing to GDP if the private sector does the hiring.

Why? Because GDP counts government salaries as “government expenditures” as soon as the government hires a person.

…Government hiring creates GDP by definition. Private hiring only creates GDP if the worker actually creates a product.
Steve57 (5f0260) — 6/14/2014 @ 9:16 am
Pope Francis and the USCCB haven’t exactly impressed me with their grasp of economics, to say the least.

See NRO’s Kevin D. Williamson for his takedown of this country’s Bishops.

http://www.nationalreview.com/article/379954/catholics-against-capitalism-kevin-d-williamson

…The best that can be said of the clergy’s corporate approach to economic thinking is that it is intellectually incoherent, which is lucky inasmuch as the depths of its illiteracy become more dramatic and destructive as it approaches coherence…

But previous Popes have been much better enonomists, much better than Krugman. For instance Leo XIII gets to the crux of the matter in his 1891 encyclical Rerum Novarum (usually translated as “of Revolutionary Change” although the Latin actually translates as “of New Things”).

4. To remedy these wrongs the socialists, working on the poor man’s envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all, to be administered by the State or by municipal bodies. They hold that by thus transferring property from private individuals to the community, the present mischievous state of things will be set to rights, inasmuch as each citizen will then get his fair share of whatever there is to enjoy. But their contentions are so clearly powerless to end the controversy that were they carried into effect the working man himself would be among the first to suffer. They are, moreover, emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community.

5. It is surely undeniable that, when a man engages in remunerative labor, the impelling reason and motive of his work is to obtain property, and thereafter to hold it as his very own. If one man hires out to another his strength or skill, he does so for the purpose of receiving in return what is necessary for the satisfaction of his needs; he therefore expressly intends to acquire a right full and real, not only to the remuneration, but also to the disposal of such remuneration, just as he pleases. Thus, if he lives sparingly, saves money, and, for greater security, invests his savings in land, the land, in such case, is only his wages under another form; and, consequently, a working man’s little estate thus purchased should be as completely at his full disposal as are the wages he receives for his labor. But it is precisely in such power of disposal that ownership obtains, whether the property consist of land or chattels. Socialists, therefore, by endeavoring to transfer the possessions of individuals to the community at large, strike at the interests of every wage-earner, since they would deprive him of the liberty of disposing of his wages, and thereby of all hope and possibility of increasing his resources and of bettering his condition in life.

What Pope Leo XIII understood (and Pope John Paul II who his own encyclical on the 100th anniversary of Leo XIII’s, Centisimus Annus, to commemorate and reinforce the lesson) is that wealth is measured in possessions (and services) that improve people’s lives as people themselves see it. Money is only a medium to acquire such goods and services.

Leo XIII also goes into the immorality and profound unjustness of socialism. it’s based upon greed and envy, and results in robbery. Not just of people’s material possessions but, as noted in the last senctence in my excerpt, of people’s hope.

American leftists operate on the same principle because confiscatory taxation is just another way to steal private property and redistribute it so that, as Leo XIII observed, “each citizen will then get his fair share of whatever there is to enjoy.” Of course, “whatever is there to enjoy” first had to be stolen from someone else. As Margaret Thatcher observed, the problem with socialism is that eventually you run out of other people’s money. Or as Kevin Williamson notes the problem with redistribution is that first you have to have something to redistribute. And the confiscators and redistributors (who always overcompensate themselves for their “service” to the “common good”) seem to imagine there’s this outside agency that will keep producing things for them to redistribute. But in reality demoralized workers tend to stop producing, realizing they are state slaves (a term that has fallen out of fashion but was once in common use to describe the inmates of communist hell holes) whose lives will never get better but only worse.

As the inmates of the old USSR used to say, “We pretend to work, and they pretend to pay us.” And if you look at how those Serco employees spend their days you get an idea of what used to happen in Soviet factories. Except in MO there seems to be less vodka involved and worse we’re actually, no kidding, paying them to produce nothing.

The problem with GDP is that it’s like measuring a light source in candlepower. There are all sorts of ways to produce a light source that generates a certain amount of radiance. It doesn’t matter to people like Krugman as to how you arrive at the figure. In a free market society the private sector would produce a 5 trillion candlepower light source by mining coal and generating natural gas, building generators that convert those resources into electricity, constructing transmission cables and an electrical grid, factories powered by that grid to produce among other desirable goods light bulbs, and voila! You have a 5 trillion power light source based upon producing goods and services. And as we grow prosperous we will produce more goods and services, and the light source will only increase in power.

In Krugman’s world the public sector would produce a 5 trillion by confiscating everyone’s money and throwing it on a huge bonfire. And voila, you have a 5 trillion candlepower light source. But as Maggie noted, sooner or later you’ll run out of fuel.
Steve57 (5f0260) — 6/14/2014 @ 10:22 am
Government Hiring: Raising GDP by Definition

…Hiring a worker who (through no fault of her own) accomplishes absolutely nothing raises GDP if the government does the hiring. Hiring a worker who (through no fault of her own) accomplishes absolutely nothing does nothing to GDP if the private sector does the hiring.

Why? Because GDP counts government salaries as “government expenditures” as soon as the government hires a person.

…Government hiring creates GDP by definition. Private hiring only creates GDP if the worker actually creates a product.

Well, right — because, unlike government, consumers don’t pay for nothing.
Patterico (9c670f) — 6/14/2014 @ 10:51 am
“…Government hiring creates GDP by definition. Private hiring only creates GDP if the worker actually creates a product.”

Patterico – Is there any other reason for private hiring, other than to help create a product or to facilitate providing goods and services?
daleyrocks (bf33e9) — 6/14/2014 @ 11:11 am
That’s very true. I thought on top of that it would be useful to provide a link that not only provided a slightly more detailed explanation, but would link to the Bureau of Economic Analysis so people could read exactly how the government defines Personal Consumption Expenditures as opposed to Government Consumption Expenditure. Along with all the other underlying definitions, assumptions, methodologies, etc., that go into calculating GDP. A figure, like the unemployment rate, you can make sing and dance and do anything you want it to do.

For instance private sector R&D isn’t included in GDP because a lot of that never results in a product that sees the light of day. But if GDP keeps falling then Obama could for political purposes have the BEA change the definition of Gross Private Domestic Investment to include R&D and then you artificially pump up the GDp figures.

Also, to let people know about the online Library of Economics and Liberty which I’ve always found very useful.
Steve57 (5f0260) — 6/14/2014 @ 11:27 am
“It doesn’t matter to people like Krugman as to how you arrive at the figure.”

Patterico and Steve57 – I’m not sure the above is true and I think it’s a little hyperbolic to say that Krugman would applaud the Serco contracts which called for minimum staffing levels in anticipation of higher levels of paper Obamacare applications but did not provide Serco the ability to cut employees when the application levels did not materialize. If Krugman did applaud the contract, maybe I missed it.

I am no fan of Krugman and I don’t think he’s been an economist for more than 20 years. He’s functioned as a partisan hack instead, applauding one brand of economics under a Democrat administration and contradicting himself by criticizing it under a Republican administration when one rolls around. The last serious economic writing of Krugman’s I looked at was from more than 35 years ago involving the interest rate equalization theory and I had to quantitatively test Krugman’s theory whether you could game interest rates or foreign exchange rates in more liquid currencies in the forward markets to your advantage and determined that you could not based on the sample of rates and currencies I tested.

Sure Krugman ranted about the Stimulus not being large enough and he wrote that nutty column about Martians, but didn’t he slam Bush for the Iraq War?

If you review most serious articles after the release of government statistics such as GDP or employment, they aren’t mindlessly in love with the reported number as claimed here. Most analysts want to look under the hood and see where the growth, shrinkage or lack of growth is coming from to see if it comports with the reality they see around them. Hey, GDP is up 1.0% for the quarter, that doesn’t seem right because everybody is hurting. Where is it coming from? Oh, the government hired 50,000 census workers in the quarter and that’s the only thing that cause a blip up in both employment and GDP. The private sector is dead as a doornail.

Savvy people know you can pick apart reported government statistics.
daleyrocks (bf33e9) — 6/14/2014 @ 11:33 am
daley, Krugman is of the school that posits you can stimulate the economy by hiring some people to dig holes, and then hire other people to come along and fill them in. In other words, hire people to produce absolutely nothing.

Here he is back in 2011 offering a variant.

http://www.huffingtonpost.com/2011/08/15/paul-krugman-fake-alien-invasion_n_926995.html

…”If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” he said. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better–”

“We need Orson Welles, is what you’re saying,” Rogoff cut in.

“There was a ‘Twilight Zone’ episode like this in which scientists fake an alien threat in order to achieve world peace,” Krugman said. “Well, this time, we don’t need it, we need it in order to get some fiscal stimulus.”

As the article observes, Krugman said the above after claiming that WWII helped end the Great Depression. I have never run into a single Keynesian who claims that WWII had a role in ending the Great Depression, not a single one, who ever claimed actually fighting the war was a necessary component. They all claim that it would have been just as stimulative to simple load all those planes, tanks, trucks, other materiel onto ships, then take the ships out and sink them.

By that logic, it doesn’t even matter if those workers actually produce a single tank. You could pay workers who show up for an 8 hour day, sit around, while you purchase all the raw materials that go into building a tank and then simply dump that into the ocean.

What does it matter if the hole gets dug, if you’re only going to pay someone else to fill it in? The government could achieve the same effect by having people show up, play computer games, and hire supervisors drive around looking for unfilled holes. Since no holes were dug, the supervisors won’t find any. Mission accomplished!

Why would a guy who thinks faking an alien invasion would be stimulative have a problem with what’s going on at Serco? if paying people to engage in useless economic activity is stimulative, then sitting around playing computer games is just as useless as anything else.
Steve57 (5f0260) — 6/14/2014 @ 11:54 am
==Is there any other reason for private hiring, other than to help create a product or to facilitate providing goods and services?==

Well, actually I do know of a case or two where daddys hired their loser sons or sons-in-law for a make work non-job “job” at daddy’s company. Does that count, daley?
elissa (b8c655) — 6/14/2014 @ 11:54 am
Patterico and Steve57 – I’m not sure the above is true and I think it’s a little hyperbolic to say that Krugman would applaud the Serco contracts which called for minimum staffing levels in anticipation of higher levels of paper Obamacare applications but did not provide Serco the ability to cut employees when the application levels did not materialize. If Krugman did applaud the contract, maybe I missed it.

daleyrocks,

How is it hyperbolic to say that Krugman applauds the concept of government spending for the sake of government spending — even if that government spending turned out to perform no useful function? Did you not read his quote about the Martian invasion? This is from Part 3 of my GDP series:

If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better [off].

In other words: if government believes there is a need for spending (to process ObamaCare applications, or repel a Martian invasion) and it turns out there was no need (because there were fewer applications than expected, or there was no Martian invasion), Krugman would still applaud it (“we’d be better off”).

How is the notion that Krugman would applaud the Serco contracts anything but a perfectly straightforward application of words that came from Krugman’s mouth? What you call “hyperbole,” I call “taking Krugman at his word.”
Patterico (9c670f) — 6/14/2014 @ 11:55 am
I see Steve57 already made the exact same points, in different words.

daley, I don’t understand why you don’t want to believe Paul Krugman when he tells you that he really thinks that otherwise pointless government busywork helps the economy.
Patterico (9c670f) — 6/14/2014 @ 11:56 am
…Sure Krugman ranted about the Stimulus not being large enough and he wrote that nutty column about Martians, but didn’t he slam Bush for the Iraq War?…

This just shows that Krugman is a rabid partisan. But if you look at what he was proposing in that nutty Martian column then he could not possibly have a problem with Serco.

If you are paying people to do busywork that you know is useless just to stimulate the economy by providing them with salaries, then it doesn’t matter if the workers engage in the busywork or just slack off. The point isn’t the work, it’s that the government pay the employees so they can go out and spend.
Steve57 (5f0260) — 6/14/2014 @ 11:59 am
Sure Krugman ranted about the Stimulus not being large enough and he wrote that nutty column about Martians, but didn’t he slam Bush for the Iraq War?

Not from an economic point of view, no. He thinks the Iraq war helped the economy.

In fact, I’d say that the sources of the economy’s expansion from 2003 to 2007 were, in order, the housing bubble, the war, and — very much in third place — tax cuts.

He doesn’t think the Iraq war was a wise form of government spending — but at least it was government spending. And he wants govenrment spending from an economic point of view.

I agree with you that Krugman is a hack, but something deep inside you is preventing you from seeing just how big a hack he is — and I’m not sure what that is.
Patterico (9c670f) — 6/14/2014 @ 12:00 pm
If you are paying people to do busywork that you know is useless just to stimulate the economy by providing them with salaries, then it doesn’t matter if the workers engage in the busywork or just slack off. The point isn’t the work, it’s that the government pay the employees so they can go out and spend.

Precisely so. Krugman thinks it’s good to take money from productive people and give it to other people so they will spend it. Whether those people actually produce any worthwhile goods or services in return for the money they are given is essentially of no relevance to him. It’s an utterly stupid point of view, so of course he gets the Nobel Prize.

The more I learn, the more I am amazed to see how much of what the world assumes to be true . . . .is not.
Patterico (9c670f) — 6/14/2014 @ 12:02 pm
“How is the notion that Krugman would applaud the Serco contracts anything but a perfectly straightforward application of words that came from Krugman’s mouth? What you call “hyperbole,” I call “taking Krugman at his word.””

Patterico – If your assumption with perfect hindsight is that there is literally nothing useful done by workers preparing for a Martian invasion, no shelters, quarantine systems etc. that could be used in the event of other disasters, then by all means the situation are equivalent. I guess my imagination must be better than yours.
daleyrocks (bf33e9) — 6/14/2014 @ 12:07 pm
#8, daleyrocks, The problem isn’t “savvy people”, it’s the political class and the MFM who use these concepts to support their follies. Language should mean something, but with inflation indices and GDP that are as malleable as gold, the so called debate based on these ephermal constructs is meaningless. The Republicans seem to be unconscious of the signficance of language and symbols. How is it, for example, that we now portray Democratic political regions in blue, while Republican territories are red? The D’s knew that they had to distance themselves from the red flags of 20th century communists, and the R’s went along with it. They allowed the D’s to fly a false flag. Or consider the term “liberal”. It’s original meaning is the opposite of the statist authoritarianism that now permeates Democratic policy initiatives. The D’s offer sexual liberation in return for serfdom, and the MFM seems to think this a pretty good deal. Today’s “liberals” celebrate Fluke’s $3000 of government aid for her reproductive control needs, while condemning the entire society to a medical “care” system that is totally disconnected from individual needs. The only consolation is that Ms Fluke may well find herself deeply embedded in this system, especially if her contraceptive needs are as costly as she said. Between the organge man and the losing Presidential candidate in the 2012 race, we have two nice guys who are clueless about things that matter. We need a host of Republicans who can speak with the clarity of Pope Leo XIII.
bobathome (5ccbd8) — 6/14/2014 @ 12:10 pm
“Not from an economic point of view, no. He thinks the Iraq war helped the economy……..

I agree with you that Krugman is a hack, but something deep inside you is preventing you from seeing just how big a hack he is — and I’m not sure what that is.”

Patterico – OK, now we need to be careful about what hat we are wearing, a political hat or an economists hat because I think the roles are getting a little confused. Politically Krugman hated the Iraq War and Bush. He also hated the Bush tax cuts and preffered stimulus to come from lower interest rates because of his concerns over income inequality. Now if you can tell me how to divorce Krugman’s political ideology from his political pronouncements, please be my guest.

I think you saying something deep inside me is preventing me from seeing how big a hack Krugman is is deeply insulting. I think you are insulted because I don’t agree with you position on GDP and Austrian economics and feel a need to make snide comments instead.
daleyrocks (bf33e9) — 6/14/2014 @ 12:16 pm
6. …Is there any other reason for private hiring, other than to help create a product or to facilitate providing goods and services?

daleyrocks (bf33e9) — 6/14/2014 @ 11:11 am

Not in a free market system. But when the government intervenes in the market then there is a reason. It’s called rent-seeking, which is trying to get some sort of special advantage from government for a narrow self-interest at the expense of everyone else. This is why companies and industry groups hire lobbyists.

The special advantages might range from putting regulatory shackles on potential competition, which is why lobbyists worked with Democratic staffers to write the 2000+ page Obamacare bill which has virtually nothing to do with providing anyone with health care to special tariffs that protect one industry sector (or union interests) at the expense of the entire economy to creating whole sectors that would not exist unless government legislated and regulated them into existence. This would include green energy and carbon trading schemes.

So while the putative private sector would hire people to produce goods and services, they are producing goods and services for which there is no market demand but only government demand. It is unproductive busywork. They are as fake as Krugman’s alien invasion. When the economy destroying subsidies that prevent real economic growth go away, those sectors and those jobs go away.
Steve57 (5f0260) — 6/14/2014 @ 12:19 pm
16. … If your assumption with perfect hindsight is that there is literally nothing useful done by workers preparing for a Martian invasion, no shelters, quarantine systems etc. that could be used in the event of other disasters, then by all means the situation are equivalent. I guess my imagination must be better than yours.

daleyrocks (bf33e9) — 6/14/2014 @ 12:07 pm

Everything over and above whatever is useful those workers might have produced is rent. Your $600 government hammer isn’t better than the $10 hammer I bought at Lowe’s. That’s $590 in lost economic activity, had that instead been directed toward other lines of production instead of preparing for a fake alien invasion.

War materiel that isn’t used doesn’t have a value of zero. It generally just has scrap value, which far lower then the government spent on the labor and resources wasted to build it. From an economic POV it’s a huge waste for not much.
Steve57 (5f0260) — 6/14/2014 @ 12:28 pm
“#8, daleyrocks, The problem isn’t “savvy people”, it’s the political class and the MFM who use these concepts to support their follies.”

bobathome – It’s a problem for political class those who pay attention to the MFM class. If you have any solutions, let me know.

In the mean time, this people of this society authorized the creation of local and state governments and a federal government. While we may not like everything they do and the spending levels they have, our remedies are at the ballot box. Economic theory which suggests we should have no government, which there are valid arguments against, does not mitigate against the fact that this is the form the United States has chosen to organize itself into. Empty arguments about flawed statistics and how people look at them do not change that.

I know what statistics I look at, who I talk to and what I find valuable to judge the overall health and prosperity of an economy. I can’t control the focus of others. Having statistics which are roughly comparable across countries is a very useful tool.

If people want to advocate for secession or anarchy, let them go for it.
daleyrocks (bf33e9) — 6/14/2014 @ 12:42 pm
“But when the government intervenes in the market then there is a reason.”

Steve57 – Yes, but the assumption that it is inefficient is not necessarily true as I described on a prior thread.

Krugman’s alien invasion was a hypothetical just as Patterico’s shutting down of all auto dealers was a hypothetical, so let’s try to get a grip.
daleyrocks (bf33e9) — 6/14/2014 @ 12:46 pm
If your assumption with perfect hindsight is that there is literally nothing useful done by workers preparing for a Martian invasion, no shelters, quarantine systems etc. that could be used in the event of other disasters, then by all means the situation are equivalent. I guess my imagination must be better than yours.

These Serco people processed 300,000 applications but expected millions. They didn’t do nothing at all; they just have a lot of their people doing nothing productive at all most of the time. Apples to apples.
Patterico (9c670f) — 6/14/2014 @ 12:49 pm
Patterico – OK, now we need to be careful about what hat we are wearing, a political hat or an economists hat because I think the roles are getting a little confused. Politically Krugman hated the Iraq War and Bush. He also hated the Bush tax cuts and preffered stimulus to come from lower interest rates because of his concerns over income inequality.

Agree and agree. I thought I was clear about separating Krugman’s political and economic views. He hated the Iraq war but thought it was a stimulus and therefore helped the economy. That’s what I said before and I say it again; what part of it is not clear?
Patterico (9c670f) — 6/14/2014 @ 12:52 pm
I think you saying something deep inside me is preventing me from seeing how big a hack Krugman is is deeply insulting.

I don’t mean to insult you. I just have a very hard time seeing why you can’t seem to equate two identical situations, and call my equation of them hyperbolic. I am giving a straightforward application of Krugman’s own stated principles.

In the mean time, this people of this society authorized the creation of local and state governments and a federal government. While we may not like everything they do and the spending levels they have, our remedies are at the ballot box. Economic theory which suggests we should have no government, which there are valid arguments against, does not mitigate against the fact that this is the form the United States has chosen to organize itself into. Empty arguments about flawed statistics and how people look at them do not change that.

I know what statistics I look at, who I talk to and what I find valuable to judge the overall health and prosperity of an economy. I can’t control the focus of others. Having statistics which are roughly comparable across countries is a very useful tool.

daley,

The whole point of this exercise is to educate people so they will act at the ballot box. I myself used to equate GDP with the economy until I learned otherwise. Now that I have learned better, I want to share that knowledge with others. I’m sorry that you consider it an “empty” argument, but for me and for many, it isn’t.
Patterico (9c670f) — 6/14/2014 @ 12:56 pm
You don’t have statistics that are roughly comparable across countries. You simply don’t know what underlying assumptions, methodologies, definitions, etc., those other countries are using to come up with similarly named economic aggregates such as GDP.

There is no statistic you can compare across the board. For instance the US compares poorly to other OECD countries in live birth rates. But then the US is one of the few countries that considers every time an infant is completely outside the mother, whether or not the umbilical cord or the placenta is still attached, as a live birth as long as the infant shows signs of life. If it breathes, moves any voluntary muscles, has a heart beat, or other signs of life it’s a live birth. Other countries don’t, if the infant is below a certain gestational age, has a birth weight below a certain threshold, or doesn’t live for 24 hours. Those are counted as stillborn, not live births.

You can’t compare unemployment statistics. Japan plays all sorts tricks to make their numbers look better. If you work 1 hour a week in Japan, they count you among the employed. You have to work 8 hours in the US.

The same goes for inflation rates and GDP figures. Governments can do anything they want with those statistics, and do. You are alwasy comparing apples to grapes and to bananas.
Steve57 (5f0260) — 6/14/2014 @ 1:01 pm
And you’re certainly welcome to do your level best to undermine the arguments I make — that’s part of what a comment section is for: to test the propositions advanced in the post. But when I advance two identical situations and say “by the logic of situation x, this economist would applaud situation y,” I expect someone to either accept my argument, or offer a logical rebuttal why I’m wrong. So far, you’ve done neither. You’ve called my entire effort “empty,” and struggle to find differences between Serco and the Martian invasion that just aren’t there — or at least, you have failed to identify any meaningful difference.

I retract and apologize for any insulting suggestion that your opposition seems emotional rather than reasoned. But honestly: what on God’s green earth is the difference between the Serco situation and the Martian invasion? Both are almost totally wasteful. As you have noted about the hypothetical Martian invasion response, it would not be totally wasteful; the same is true of Serco’s largely wasteful contracts. So what’s the difference? Tell me. I don’t see it.
Patterico (9c670f) — 6/14/2014 @ 1:04 pm
“But when the government intervenes in the market then there is a reason.”

Steve57 – Yes, but the assumption that it is inefficient is not necessarily true as I described on a prior thread.

Actually, it is. Anything but the free market is necessarily inefficient by definition. Only the free market can determine the ideal way to satisfy consumer preferences. Explaining why is beyond the scope of any one comment or even one blog post, but this is a bedrock principle.
Patterico (9c670f) — 6/14/2014 @ 1:06 pm
Economic theory which suggests we should have no government, which there are valid arguments against, does not mitigate against the fact that this is the form the United States has chosen to organize itself into. Empty arguments about flawed statistics and how people look at them do not change that.

In other words: ideas have no power.

I disagree, quite fundamentally.

I recognize that’s not exactly what you said. Your articulation assumes that all my arguments are “empty” and that there are valid arguments against them. Fine. Demonstrate their emptiness. Make the valid arguments.

Until you do, I cannot accept the assumption that it does no good to talk about the problems of our government and our economy because this is what we’re stuck with. This is what we’re stuck with until we persuade people to change it. That’s what I’m trying to do here.
Patterico (9c670f) — 6/14/2014 @ 1:10 pm
22. …Krugman’s alien invasion was a hypothetical just as Patterico’s shutting down of all auto dealers was a hypothetical, so let’s try to get a grip.

daleyrocks (bf33e9) — 6/14/2014 @ 12:46 pm

Which one of us doesn’t have a grip? Krugman’s hypothetical was in support of his theory that government spending is stimulative, and it doesn’t matter what the government spends the money on. It can spend trillions on a fake war and its just as stimulative as spending it on a real war.

By the same token, if the point is to come up with an excuse to spend then fake work will do just as well as any other.

I suppose, Pat, this illustrates why I thought it would be link to the online Library article @3.

Scenario 1. Tomorrow, ExxonMobil spontaneously hires an unemployed petroleum engineer for $100K per year. She spends a year looking for new oil, finds nothing.

Scenario 2. Tomorrow, the federal government spontaneously hires an unemployed petroleum engineer for the same $100K. She spends a year looking for new oil, finds nothing.

As the entry goes on to note, scenario 1 adds nothing to GDP since no oil was produced, while scenario 2 adds $100k. But more to the point, if you scroll up to my comment @3 you’ll read that in both scenarios the author takes pains to observe that the fact that neither engineer found any oil was due to no fault of their own.

I’m pointing out it doesn’t matter. It could have been entirely their faults. The effects on GDP would be the same whether they actually tried to work or simply collected a paycheck while they played computer games, surfed porn sites, or shopped on ebay all day everyday (all actual examples of how government employees who can’t be fired have spent their days).

Krugman might not celebrate the fact that Serco employees didn’t even pretend to work while employed in a fake business sector, but if you’re employed in a fake business sector it doesn’t matter if the fake work gets done or not. If Krugman wouldn’t celebrate that, it’s only because people like him don’t like it when others expose his fake economic theories.

It’s a simple point; I don’t know why you’re having a hard time with it.
Steve57 (5f0260) — 6/14/2014 @ 1:26 pm
#21, daleyrocks, I’m not following your argument here. I lamented the failure of the Republican party to mount an effective defense of free markets and liberty, and I cited a couple of examples where I thought they’d surrendered valuable intellectual territory that make it harder for them to make their case effectively. I don’t advocate anarchy. My hope is that an educated electorate will be able to put a large enough group of effective advocates in the Senate and House that it will be impossible to isolate and discredit them, as happens now. Witness the treatment of Ted Cruz. And I appreciate Paterrico’s efforts to advance this necessary eduation.
bobathome (5ccbd8) — 6/14/2014 @ 1:34 pm
Japan plays all sorts tricks to make their numbers look better. If you work 1 hour a week in Japan, they count you among the employed. You have to work 8 hours in the US.

At the very least, such statistics can be very misleading, more so than I originally thought was the case, at least based on the figures for our neighbor to the south. The official unemployment rates for Mexico going back over 30 years, and which are listed as being vetted by the CIA (why that agency feels it’s their business to be identified with such data gathering, I don’t know—then again, why the CIA has reportedly hosted booths at Gay Pride festivals in DC also is puzzling to me), show an enviable annual rate of around 2 to 3%, rarely much above 4%, and only during times when that country has been facing a major recession.

I guess all the people from south of the border who’ve been doing everything possible to barge their way into the US for several decades must be real malcontents and n’er-do-wells if they can’t find a job in a country with such traditionally impressive low-unemployment rates.
Mark (75db68) — 6/14/2014 @ 1:38 pm
The Eisenhower Interstate System had a wartime purpose but has only been used for civilian commerce. My WPA-built 4,000+ student high school was workfare which has more than paid for itself over about eighty years.
nk (dbc370) — 6/14/2014 @ 1:40 pm
The Eisenhower Interstate System had a wartime purpose but has only been used for civilian commerce. My WPA-built 4,000+ student high school was workfare which has more than paid for itself over about eighty years.

The wonderful thing about government projects is that you can see them, whereas it requires imagination to envision all the things that could have been done with the resources that were used to build those projects.

The fact that the government does something does not mean that private enterprise could not have done it better. The railroads and highway builders were paid by the foot and so often took indirect routes where direct routes would have been better. I do not subscribe to the notion that government needed to build these roads or buildings, or that private enterprise would have been unable to accomplish such things. The market has a wonderful ability to come up with efficient solutions to problems that need to be solved.
Patterico (9c670f) — 6/14/2014 @ 1:49 pm
From a strictly economic point of view. But workfare addresses a social situation, and Eisenhower engaged in strategic military planning.
nk (dbc370) — 6/14/2014 @ 1:51 pm
nk, I’m sure the Alaskan highway has more than paid for itself, too. I’m also sure that but for WWII it wouldn’t have been built.

But then it would be impossible to determine the actual value of the Alaska highway since it wasn’t built to meet any previously existing market demand, was built by conscripts paid artificially low wages, using equipment and materials subject to artificial price controls.

Which helps illustrate the shortcomings of using GDP figures as an economic measure, which is the topic at hand.
Steve57 (5f0260) — 6/14/2014 @ 1:57 pm
#21, daleyrocks, I’m not following your argument here. I lamented the failure of the Republican party to mount an effective defense of free markets and liberty, and I cited a couple of examples where I thought they’d surrendered valuable intellectual territory that make it harder for them to make their case effectively. I don’t advocate anarchy. My hope is that an educated electorate will be able to put a large enough group of effective advocates in the Senate and House that it will be impossible to isolate and discredit them, as happens now. Witness the treatment of Ted Cruz. And I appreciate Paterrico’s efforts to advance this necessary edu[c]ation.

Thanks again, bobathome. I don’t get much positive feedback on these posts, and I consider them some of the more important posts I do — so I appreciate the comment.
Patterico (9c670f) — 6/14/2014 @ 1:59 pm
==The fact that the government does something does not mean that private enterprise could not have done it better. ….. I do not subscribe to the notion that government needed to build these roads or buildings, or that private enterprise would have been unable to accomplish such things==

Do you believe that private enterprise could have been able to secure all the land and rights of way necessary for building say, the interstate highway system? It took years, and lawsuits, and eminent domain takings as it was.
elissa (b8c655) — 6/14/2014 @ 2:03 pm
Today the U.S. Postal service is fat, in disarray, and under the control of the union and incompetent overpaid bureaucrats. Today there are many fine alternate and preferable private enterprise competitors. But in the beginning it took the U.S. Government to authorize, fund and protect the men, horses, and trains which delivered the mail to a growing and wild country.
elissa (b8c655) — 6/14/2014 @ 2:13 pm
I have already agreed that spending is a flawed measure of prosperity in a prior post.

And I just remembered that the preparation for the Martian invasion happened except that it was nuclear war and it was the Russians. I remember fallout shelter signs everywhere — I never went in so I can’t tell you about their stocks of food and water or their ventilation systems. People were also building their own fallout shelters in their basements and stocking them. Some are still doing it. Gary?
nk (dbc370) — 6/14/2014 @ 2:15 pm
And I don’t think the arms race made us richer, and I think it caused the fall of the Soviet Union. So there.
nk (dbc370) — 6/14/2014 @ 2:21 pm
34. …I do not subscribe to the notion that government needed to build these roads or buildings, or that private enterprise would have been unable to accomplish such things. The market has a wonderful ability to come up with efficient solutions to problems that need to be solved.

Patterico (9c670f) — 6/14/2014 @ 1:49 pm

Early automotive pioneers like Henry Ford and Harvey Firestone built roads in order to expand the appeal for their products. While Ford built the Model T (1908) to appeal to sectors such as farmers, where the demand already existed, many people didn’t see the point of buying a car. Ford (and Firestone) were marketing and advertising wizards. They listened to people’s objections and then they removed the reasons for their objections. If building paved roads was what they needed to do, they’d build paved roads. Once people had a taste of the freedom and convenience they could have with cars, the popularity of cars skyrocketed.

The notions that some people like Sen. Warren or President Obama have that somehow entrepreneurs owe society because their success is due to publicly funded infrastructure is the cargo cult approach to economics. It gets ist facts exactly backwards. The feds didn’t even get consider getting into the road building business until after Ford popularized automobiles. It was the popularity of cars that created the demand for roads; it wasn’t the existence of roads that led to the invention of cars.
Steve57 (5f0260) — 6/14/2014 @ 2:21 pm
Do you believe that private enterprise could have been able to secure all the land and rights of way necessary for building say, the interstate highway system? It took years, and lawsuits, and eminent domain takings as it was.

Securing the land is different from the building. I could be persuaded that eminent domain, provided for by the Constitution, was necessary for that project.
Patterico (9c670f) — 6/14/2014 @ 2:22 pm
The Army got involved in the building of roads in 1916. The US Army, that is. The Roman army 2,000 years earlier.
nk (dbc370) — 6/14/2014 @ 2:24 pm
== It was the popularity of cars that created the demand for roads; it wasn’t the existence of roads that led to the invention of cars.==

Nobody here said it was, Steve57. That’s an interesting and historically true factoid you shared– but completely irrelevant to this discussion, no?
elissa (b8c655) — 6/14/2014 @ 2:26 pm
Privatize inter-state travel? With tolls paid to the entrepreneurs who built the roads? Where do you start, where do you stop? Should I pay a toll at my driveway to the General Motoring Association? How about to walk down the sidewalk? An annual fee to the West Hawthorne Place Corporation?
nk (dbc370) — 6/14/2014 @ 2:30 pm
Heh, nk. You know how “highway robbery” got its name–from the English highway robbers who created their own unofficial but lucrative toll roads.
elissa (b8c655) — 6/14/2014 @ 2:34 pm
My Roman road reference illustrates that even that interesting factoid is not strictly true. Julius Caesar’s first proconsular appointment was the maintenance of the cart roads and cow paths in Latium. Not a Ford in sight. Cowpaths and goattrails get overgrown and need to be cleared.
nk (dbc370) — 6/14/2014 @ 2:34 pm
elissa @45, I certainly thought that factoid was relevant to Pat’s earlier comment that “…I do not subscribe to the notion that government needed to build these roads…”
Steve57 (5f0260) — 6/14/2014 @ 3:37 pm
nk @48, the same was true in the US. Somehow no one felt the need for proconsuls or even the federal government to get involved in clearing overgrown cart paths, goat trails, or cow paths.

The via publicae served the development of the Roman state. Primarily they served military purposes, which is why these public roads maintained at state expense had to meet certain dimensional specifications. They had to be able to accommodate legions on the march. It’s also why the Romans would also build them arrow straight. It’s not the easiest way to build a road, but the wanted to awe subjugated peoples and potential enemies by demonstrating they could overcome and dominate any obstacle, even nature itself.

I find your examples curious. Romans in the senatorial class didn’t didn’t concern themselves with cart paths, goat trails, or cow paths as they advanced along the career path known as the cursus honorum.

That’s why they also had a system if via privatae. If a landowner, group of landowners, or villagers needed to reach certain fields, properties, estates, get their goods to market, or just wished to connect with a public road, they built private roads at their own expense. Cart roads, cow paths, goat trails, and footpaths would have fallen into this category.

What that has to do with demand for interstate highways in 20th century America I don’t know. The fact is before automobile travel became popular there was no such demand.
Steve57 (5f0260) — 6/14/2014 @ 4:39 pm
The development of the state, cannot be done without the state. Now, Kelo v. City of New London was obscene over-involvement of government and business and likely Commodore Vanderbilt’s railroads were too (the case law of railroad right of way was the precedent in Kelo). But I don’t think the national highway system, or AT&T, or ComEd, or the Keystone Pipeline are. And, anyway, I was just giving a couple of examples where either government spending in light of a perceived social or military necessity turned out to be economically beneficial as well as socially beneficial. The thing is that a purely libertarian society exists only in the imagination. It is the foolish government which allows the unfettered accumulation of wealth, because it will soon find itself subordinate to a mercantile oligarchy. As bad as Obama is, I don’t want George Soros in his place. As bad as Congress is, I don’t want Goldman Sachs in their place. Bill Gates is a nice guy,and he’d probably fund the CDC out of his own pocket if we made him Secretary of HHS but let’s leave him at that. 😉
nk (dbc370) — 6/14/2014 @ 4:53 pm
I agree there’s no such thing as a purely libertarian society. Which is why I’m not a libertarians.

Still, your earlier comment put me in mind of the old saying, “All roads lead to Rome.” Because they literally did. At least the via publicae. If you needed a road that went anywhere else, you needed to build it yourself.
Steve57 (5f0260) — 6/14/2014 @ 5:26 pm
You can say the same thing about theoretical Communism. It was fine and dandy for The Communist Manifesto to preach free love, but by the time of Stalin or not far after, undermining of the family unit was a crime. For realistic reasons. You cannot build on sand, you need a more solid foundation, and for a society the family was time-tested one. Same thing with central planning and collectivism. China began to prosper when it abandoned it and threw its rope on capitalism, freeing it just enough to work but bridling it to the interests of the polity.
nk (dbc370) — 6/14/2014 @ 5:49 pm
#53, nk: The problem with building communist societies on a foundation of (traditional) families is that THEY remember, generation after generation. My Grandfather would embarrass my Mom with his condemnation of FDR. But he was right. This generational memory is only too evident in the middle east … Sunni vs Shia … millenia.

The U. S. offerred a different way. But HteWon is demonstrating that is really isn’t all that different from all the rest of the failed experiments.

Unless we can restore the Rule of Law and (hopefully) impeach the SOB. And all his hand maidens.
bobathome (5ccbd8) — 6/14/2014 @ 6:31 pm
bobathome @54, you are correct. That’s why communist societies have always destroyed what they called the Bourgeois family. Which is exactly what you’re talking about.

The Soviets may have made free love illegal, but they certainly never made undermining the family unit a crime. The Soviets, all communist societies, destroyed the family unit all the time precisely because it competed with the state for an individual’s loyalty.

Children are the property of the state. Parents may be allowed to raise those children for the state as long as that serves the interest of the state. But Pavel Morozov was presented as the boy hero of the Soviet union because he turned his parents into the state. The story was no doubt pure fiction, but the propaganda ministries invented the story to indoctrinate children into the communist ideal.

http://babalublog.com/2011/07/05/a-pedro-pan-history-lesson-from-professor-carlos-eire/

…The numbers speak for themselves: a huge percentage of Cuban parents were not just willing, but eager, to get their kids off the island.

You have to ask yourself why.

Castrolandia’s Ministry of Truth – and Albor Ruiz of The New York Post – would have you believe that our airlift was concocted by the government of the United States as a nefarious Cold War scheme, the objective of which is never clear. As their version has it, the evil Yanquis tricked Cuban parents into “falsely” thinking that their parental rights were about to be revoked by the state.

Total nonsense. The reason our parents sent us here was not due to any rumor spread by Americans and their agents, but because of what we were experiencing already. The Castroite Revolution demanded total devotion from all of us children, our parents be damned. Once the state took over all of the schools, we were held hostage by it every day, indoctrinated until our brains could take no more, forced into “Revolutionary” errands, jammed into agricultural labor camps, dressed in Pioneer uniforms, forced to march in lockstep and chant slogans, warned never, ever to attend religious services, and, at the age of eighteen, drafted in the armed forces. Some of us were even being sent to the Soviet Union or its satellites behind the Iron Curtain. Our parents had no say in any of this. Worst of all, we were constantly admonished to report on anyone in our family who dared to criticize these arrangements.

The facts speak for themselves, and can be verified through empirical research. Our parents were already losing us and they a real tough choice to make: do we let Castrolandia steal our kids or do we send them somewhere else where the state won’t claim their mind and soul?…

The only reason the Castro government agreed to Operation Peter Pan at all is because it destroyed families by dissolving them. And anything that destroyed the bourgeois family was a good thing in their eyes.

All you have to do is talk to any communist refugees and they’ll tell you that the state profoundly mistrusted the family unit, and privacy in general. Husbands took vacations in groups with co-workers, children with school groups, wives with neighborhood or community organization members. Husbands and wives had to whisper late at night in bed if they were going to discuss anything the least thing controversial so the kids wouldn’t overhear an turn them in.

Communists never considered the family the foundation of society. They just required it as an arrangement of convenience. They intruded upon it at every opportunity to make sure that no one actually formed bonds of trust or affection that made their primary loyalties to each other rather than to the state. Just read Solzhenitsyn and you’ll see children denounce parents, spouses denounced each other, all in an effort to save their own skins when one of them was dragged off to the gulag.
Steve57 (5f0260) — 6/14/2014 @ 8:23 pm
It’s called doublespeak, like the last quote I referenced in the Rick Perry thread. Soviet legislation does not recognize moral crimes but being a homosexual is punishable by five years in prison. Soviet legislation does not recognize the crime of adultery because people do not belong to each other, but undermining the family unit is antisocial. The Soviet Union does not have unemployment, it has an occupational reserve.
nk (dbc370) — 6/15/2014 @ 5:34 am
Apropos of GDP, Central MN is currently experiencing 20 inches in 60 days. Some farmers are hoping to replant with 70 day to harvest seed.

The food price surge is yet to roll.
gary gulrud (46ca75) — 6/15/2014 @ 7:39 am
These people are contributing absolutely nothing to the economy. All they do is drain taxpayer money.

But their services are included in GDP.

If this company were being paid directly by consumers, they would go out of business, because consumers don’t pay money for nothing. But the government does.

As a general statement, this is of course true. But defenders of government will say that it’s an aberration, and point out that such aberrations do occur in the private sector too. I have personal experience of such an aberration, when I was on a two-month contract at a Fortune 500 company. When I started I was given some work to do, and about a week later I handed it in and expected to be given some more. Instead, for the next seven weeks or so, I spent my working hours sleeping, reading the paper, reading books, and twice a day asking my supervisor whether there was anything she’d like me to help out with, only to be told that there wasn’t. Then at the end of each week she’d sign my time sheet and I’d be paid.
Milhouse (2c3555) — 6/15/2014 @ 8:51 pm
PS: I suspect that the week’s worth of work they gave me at the beginning of my contract was the whole job for which they’d hired me, and they’d just grossly overestimated how long it should have taken. I’m good, but I’m not that good. I’d think anyone moderately competent would have done it in no more than two weeks or so.
Milhouse (2c3555) — 6/15/2014 @ 8:54 pm
How is it, for example, that we now portray Democratic political regions in blue, while Republican territories are red? The D’s knew that they had to distance themselves from the red flags of 20th century communists, and the R’s went along with it. They allowed the D’s to fly a false flag.

Until 2000 the media used to alternate the major parties’ colors at every election. In 1996, 1988, and 1980 the Rs were blue and the Ds red. 2000 happened to be a D-blue and R-red year, and 2004 was due to be the other way around. But the nailbiter finish and subsequent recounts and legal battles, which kept the red/blue maps in the news for two months, froze those colors in the public mind, so the media decided to stick with them forever.
Milhouse (2c3555) — 6/15/2014 @ 9:12 pm
Today the U.S. Postal service is fat, in disarray, and under the control of the union and incompetent overpaid bureaucrats. Today there are many fine alternate and preferable private enterprise competitors. But in the beginning it took the U.S. Government to authorize, fund and protect the men, horses, and trains which delivered the mail to a growing and wild country.

No, it didn’t. Private enterprise was willing and able to do it, but the government forcibly prevented it. Cf Lysander Spooner and the Pony Express.
Milhouse (2c3555) — 6/15/2014 @ 9:22 pm
Do you believe that private enterprise could have been able to secure all the land and rights of way necessary for building say, the interstate highway system? It

The easy throw-away answer is that the private builders could have been given the right of eminent domain. But the real answer is that yes, private enterprise would have been able to secure the rights, but would have had to pay what it was actually worth, i.e. landowners would not have been screwed as they were by the government. That would have been a good thing. If it added to the highways’ cost, then the highways should have cost more, but in fact that addition would have been outweighed by the savings from private enterprise’s greater efficiency. If the highways could not have been built without ripping the landowners off, then they shouldn’t have been built.
Milhouse (2c3555) — 6/15/2014 @ 9:25 pm
And I just remembered that the preparation for the Martian invasion happened except that it was nuclear war and it was the Russians. I remember fallout shelter signs everywhere

The difference is that that danger was real. The danger made everyone worse off; the safety measures made everyone better off than they were without them, but not better off than they’d have been had there been no threat in the first place.
Milhouse (2c3555) — 6/15/2014 @ 9:28 pm
And I don’t think the arms race made us richer, and I think it caused the fall of the Soviet Union. So there.

And thus did make us richer, after all. Though not as much richer as we’d have been had there never been a Soviet threat in the first place.
Milhouse (2c3555) — 6/15/2014 @ 9:29 pm
Privatize inter-state travel? With tolls paid to the entrepreneurs who built the roads?

Why not? Are you not aware that the original turnpikes were built by private enterprise, for profit?

Where do you start, where do you stop? Should I pay a toll at my driveway to the General Motoring Association? How about to walk down the sidewalk? An annual fee to the West Hawthorne Place Corporation?

Why not?
Milhouse (2c3555) — 6/15/2014 @ 9:32 pm
It is the foolish government which allows the unfettered accumulation of wealth, because it will soon find itself subordinate to a mercantile oligarchy.

No, it’s an honest government. What #*%^ing right does any government have to prevent or fetter the accumulation of wealth? How does any government that does so differ from the mafia?
Milhouse (2c3555) — 6/15/2014 @ 9:36 pm
The only right anybody has is to rejoin the food chain, and with the availability of cremation even that is not invariably so. The reason libertarianism exists only in the imagination, and in no place on Earth ever, is because it’s founded on assumptions that have no relationship to reality. At best it’s an opium dream, mostly it’s outright hypocrisy.
nk (dbc370) — 6/15/2014 @ 9:44 pm
The right not to be murdered or robbed has no relationship to reality?! Glad to know you think so. So you’ll have no objection when someone robs or kills you?
Milhouse (2c3555) — 6/15/2014 @ 9:49 pm
I do. That’s why I live in a society which has organized and cooperates to prevent it.
nk (dbc370) — 6/15/2014 @ 9:59 pm
The imminent Dark Age has lots of trebuchet fodder.

http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market
gary gulrud (46ca75) — 6/16/2014 @ 7:04 am
A side benefit of having unassimilated large Somali populations in Central MN is one knows when to grab for the gun just by watching the vehicles rolling up the hill.

Brand new Voyager vans has got an Islamist behind the wheel.
gary gulrud (46ca75) — 6/16/2014 @ 7:09 am
It is the foolish government which allows the unfettered accumulation of wealth, because it will soon find itself subordinate to a mercantile oligarchy. As bad as Obama is, I don’t want George Soros in his place. As bad as Congress is, I don’t want Goldman Sachs in their place

nk, such sentiment by itself, and if reserved for situations involving only a truly excessive, feudalistic-type society, is generally okay. Or it’s not too deserving of a raised eyebrow. But in light of your squishy sentiments towards Franklin D Roosevelt, and your being bothered by the concept that compassion for compassion’s sake is a very cheap, corrosive, corruption-inducing emotion, I’m wary of what underlies your sense of caution.

Simply put, only a foolish person — at least in the context of the US (and not, say, a strange hybrid like a crony-capitalist-berserk Russia) — doesn’t understand that the government has the legal, technical, operational power to force its will on most people. It can force us to support its goods/services, pencil pushers, managers and employees. By contrast, the mercantile oligarchy, with just a few special exceptions (such as private-sector providers of electricity, less so phone service), don’t force me to buy its goods or services, or support its executives and employees.
Mark (75db68) — 6/16/2014 @ 7:33 am
I do. That’s why I live in a society which has organized and cooperates to prevent it.

But you want that society to rob and kill other people. In other words, you have knowingly and voluntarily joined a criminal gang, or what you would like to turn into a criminal gang. You approve of its committing the most horrible crimes, so long as you are not the victim. That makes you hostis humani generis, and fair game for anyone with both the desire and ability to kill you. Perhaps your “society” will protect you, and perhaps it won’t, but either way your killer would be doing no wrong, according to you. If he succeeds, that’s just your tough luck.
Milhouse (2c3555) — 6/16/2014 @ 8:18 am
nk, such sentiment by itself, and if reserved for situations involving only a truly excessive, feudalistic-type society, is generally okay.

No, it is not. Nothing justifies robbing someone just because he’s “too rich”. Nothing. Anyone who believes it’s OK is no better than a common criminal.
Milhouse (2c3555) — 6/16/2014 @ 8:20 am
Mark, in view of your constant obsession with Venezuela and limousine liberals, I can’t help but think that you are redirecting repressed anger at high gasoline prices in your comments. Nothing wrong with being upset about high energy costs, but you should not allow it to color your entire thinking.
nk (dbc370) — 6/16/2014 @ 8:20 am
That makes you hostis humani generis, and fair game for anyone with both the desire and ability to kill you.

Alexander the Great was killed by a mosquito (a parasite in the mosquito’s spit if you want to be technical). Somebody invented DDT for that, because teaching libertarianism to mosquitoes was not working out.
nk (dbc370) — 6/16/2014 @ 8:25 am
R.I.P. Tony Gwynn
Icy (ef91d6) — 6/16/2014 @ 8:31 am
Mosquitoes are not people. People are. And “we hold these truths to be self-evident, that all men are created equal, [and] are endowed by their Creator with certain inalienable rights”. That is the foundation of the USA, and of all morality. If you don’t accept that people have rights, then you have no rights that anyone need concern themselves with, and whoever manages to get through your defenses is entitled to do whatever he likes to you.
Milhouse (2c3555) — 6/16/2014 @ 8:35 am
If you don’t accept that people have rights, then you have no rights that anyone need concern themselves with, and whoever manages to get through your defenses is entitled to do whatever he likes to you.

No, because I have not painted myself into your philosophical corner. I do not need to accept any half-baked imagining in order to organize and cooperate with my fellow humans both for protection of the individual and for the greatest good for the greatest number. We’ll make our individual self-interest the collective self-interest and internalize the collective self-interest as our individual self-interest, and we will institutionalize the instinct to procreate into the perpetuation of our society.
nk (dbc370) — 6/16/2014 @ 9:02 am
“we hold these truths to be self-evident, that all men are created equal, [and] are endowed by their Creator with certain inalienable rights”. That is the foundation of the USA.

What’s inalienable about life, property, or the pursuit of happiness? People die, sell their houses, and get married 😉 all the time?
nk (dbc370) — 6/16/2014 @ 9:06 am
“liberty”, sorry. 😉
nk (dbc370) — 6/16/2014 @ 9:08 am
I get the American Revolution and the French revolution slogans mixed up sometimes.
nk (dbc370) — 6/16/2014 @ 9:10 am
I wish we could just get past the silly and meaningless “compassion for compassion’s sake” tic. Ima gonna say it again Mark, you apparently coined and copyrighted the phrase and you are in love with it. But you are likely the only person on the planet who knows what you actually mean when you use it, or what about it feels “cheap and corrosive” to you. If you mean to state that most liberals are genuinely but misguidedly compassionate toward people and situations with which you and many conservatives personally violently disagree, then say that. If you think the “compassion” that you see liberals publicly displaying is generally fake and faux, self serving and hypocritical, and in fact is not really compassion at all, then say that. These are two very different concepts. Do you see the difference?

People continue to question you about this phrase not because they are “squishes” or because they are closet liberals, but because they would just appreciate your using language that is descriptive and understandable when you try to make your points.
elissa (433a2d) — 6/16/2014 @ 9:11 am
Just keep them from s.w. Mn. Gary.
mg (31009b) — 6/16/2014 @ 9:18 am
57-gary- are the ditches white with moo juice?
mg (31009b) — 6/16/2014 @ 9:23 am
If you mean to state that most liberals are genuinely but misguidedly compassionate toward people and situations with which you and many conservatives personally violently disagree, then say that. If you think the “compassion” that you see liberals publicly displaying is generally fake and faux, self serving and hypocritical, and in fact is not really compassion at all, then say that.

Elissa, if you haven’t seen my comments and observations for quite awhile, then I wouldn’t characterize your question as being more rhetorical than a case of true puzzlement, and also a bit disingenuous too.

Compassion has become cheap and foolish throughout the US and Western World in general over the past several decades, exemplified by, for example, people getting verklempt over the idea of a friend or close acquaintance initiating a same-sex marriage ceremony and, in turn, expecting everyone around him or her to smile and happily go along for the ride, or people getting verklempt over (and buying into) the image of a Franklin D Roosevelt that’s oh-so-humane, oh-so-caring.

Compassion has morphed into a cheap, phony, hollow, meaningless, excessive, two-faced, dishonest, dumb thing in the 21st century — so it’s a combination of your two definitions above — resulting in a case of…compassion for compassion’s sake.
Mark (7b4a56) — 6/17/2014 @ 7:45 pm
You are an idiot Mark, and your stilted attempts at writing come across as silly. There, I’ve said it. You obviously have no idea what the word compassion even means and I seriously wonder if you’ve ever felt compassion for any thing or any person in your life. Compassion is not a dirty word except when you use it.
elissa (433a2d) — 6/17/2014 @ 7:56 pm
Ding-ding-ding. I knew it, Elissa. I had a hunch what was really bothering you about that phrase. What’s sad is you’re in general not as foolishly loaded up with cheap compassion as out-and-out liberals are, which is why I say, buckle up, people, we’re in for a bumpy ride.

The pending prognosis is for the US to come down with a good dose of Euro-sclerosis mixed together with a helping heap of Mexico-itis, topped off with a sprig of Detroit, Michigan and southside Chicago.
Mark (7b4a56) — 6/17/2014 @ 8:06 pm

6/13/2014

GDP Includes People Getting Paid to Do Absolutely Nothing — Why Paul Krugman’s Love of GDP Is Wrong, Part Five

88 Responses to “GDP Includes People Getting Paid to Do Absolutely Nothing — Why Paul Krugman’s Love of GDP Is Wrong, Part Five”

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