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On misleading economic indicators: I'm not sure if this was posted recently, but Kevin Phillips had an article in Harpers, titled "Numbers Racket, Why the economy is worse than we know" (subscription only) of which an shorter (?) version can be found here,  and a summary here) in which he shows that the public measures of the US economy's state do not show what they say they show. This is well-charted territory here at Eurotrib of course, but certainly it isn't generally widespread knowledge.

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Wed May 14th, 2008 at 08:20:04 AM EST
Kuznets must be turning in his grave.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Wed May 14th, 2008 at 08:22:22 AM EST
[ Parent ]
I'm skeptical of one part of the article
The truth, though it would not exactly set Americans free, would at least open a window to wider economic and political understanding. Readers should ask themselves how much angrier the electorate might be if the media, over the past five years, had been citing 8 percent unemployment (instead of 5 percent), 5 percent inflation (instead of 2 percent), and average annual growth in the 1 percent range (instead of the 3-4 percent range).
I'm tempted to answer "not much". I suspect most voters base their choice on their own financial situation, and that of people they know, not on statistics. The statistics are mainly for policy-makers, journalists etc. Once these get detached from reality, you have pundits asking why the electorate is so dissatisfied with Bush's policies, when the economy is doing so well....
by gk (gk (gk quattro due due sette @gmail.com)) on Wed May 14th, 2008 at 08:36:46 AM EST
[ Parent ]
Whatever the domestic influence, sparkling statistics on the American economy are used (by economist-talking heads, pundits, journalists) throughout the world to maintain the image of infallibility and success of supply-side, free-market, neo-liberal policies.

The story is that, while most of us blunder about, the US has got it right. Even when everything's wrong...

by afew (afew(a in a circle)eurotrib_dot_com) on Wed May 14th, 2008 at 10:16:26 AM EST
[ Parent ]
Of course. Non-Americans only really have two sources of information, the statistics (for the specialists and the journalists) and popular culture (for the rest), both of which tell them how great things are. But the American electorate itself has a third source of information, which is their own experience. If you can't get a job, or can't afford food, you won't be happy, even if the statistics tell you you should be, and that is more likely to affect your vote.

Of course, this only works if at least some politicians offer a genuine choice, which is another matter.

by gk (gk (gk quattro due due sette @gmail.com)) on Wed May 14th, 2008 at 01:49:11 PM EST
[ Parent ]
I knew already some of the mentioned adjustments.
However, what I found interesting in the FTD is the comparison with the DM/Euro development, e.g. it seems that in Germany/Europe these statistics are much less manipulated than in the US - while it seems to me that people in the US tend to have a higher degree of trust to their gov than Germans. But of course the causality might be the opposite direction.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Wed May 14th, 2008 at 08:43:04 AM EST
[ Parent ]
it seems that in Germany/Europe these statistics are much less manipulated than in the US
Actually that was one of the things I wanted to ask. Is the US the most egregious practicioner of this sort of numerical revisionism? And: Do harmonized indicators even exist among EU member-states (or even eurozone members), such that we know, say, the unemployment, under a common definition, in all member countries? I mean when the Belgian Economy Minister states that unemployment (or any indicator) in Belgium is X% and his Greek counterpart states that in Greece it is Y%, are X and Y necessarily directly, or pretty close to directly, comparable?

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Wed May 14th, 2008 at 09:04:08 AM EST
[ Parent ]
There's an EU Labour Force Survey overseen by Eurostat, and OECD also does "comparative" employment stats.

See my diaries on comparative employment statistics:

by afew (afew(a in a circle)eurotrib_dot_com) on Wed May 14th, 2008 at 10:09:24 AM EST
[ Parent ]
Unemployment is special, but there is quite a lot of harmonised statistics. E.g. fiscal deficit has to be reported under very clear rules to the EU and this numbers are cited in public.
For inflation there exist Eurozone numbers, as for many other relevant things. The Maastricht treaty has requirements for a country to be able to join the Eurozone. That would not make sense, if every country could define on its own how those numbers are measured, although I think Greece has tried...


Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Wed May 14th, 2008 at 12:58:00 PM EST
[ Parent ]
Not so much trust in my experience as lack of knowledge and sophistication.

A certain form of anti-intellectualism accentuates these two elements, making the divorce of ones views  from ones own interests all the more easy, in the short term at least, to acheive.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Wed May 14th, 2008 at 10:29:03 AM EST
[ Parent ]

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