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The problem with GDP as a statistic is that it is just a sum total. We net it across the whole country. So if California could make twice the entire country's G

The problem with GDP as a statistic is that it is just a sum total. We net it across the whole country. So if California could make twice the entire country's GDP in 2017 but the rest of the country's GDP were to fall to zero, then this is a win by this simple metric. But it is not a win for the country, if the rest of it were to become derelict. One might still say it is an economic win, objectively, because this holy number has doubled. But politically it is a fail, because California won't determine the government on its own, so even dispassionately you cannot call it a political win. Therefore perhaps GDP needs to be measured as a weighted average across the States. Perhaps not a simple weight, because maybe people are more sensitive to declines than improvements. Ultimately though the government is not solving for a higher GDP but rather for higher votes. And economic variables are only as good as their ability to predict where votes will go.

eru 10y ago
Your argument reminds me of one brought up in the P vs NP debate: what if we find that indeed P==NP, but the algorithms required take O(n^1000)? The answer is: in that cause, the convenient shorthand of P ==tractable and NP==intractable breaks down, and we have to come up with a better way to formalize this informal distinction we care about. However in practice, algorithms with running times in P usually have small exponents, like O(n^4) or so. To come back to GDP: yes, it would be weird if California would get all the nations GDP. In practice this doesn't happen---but if it ever did, we'd need a new measure to correlates with all the good things we actually care about.
- riazrizvi 10y ago
  The uneven distribution of GDP in the country is happening and it is precisely why the Democrats have been ousted from government this last time. The last 30 years of economic policy in the US has used GDP, evenly distributed GDP, as the measuring stick of trade deals like NAFTA and TPP. Trade deals which in total brought a net gain for the country, but over time have just demolished industry in certain regions.
  - chillacy 10y ago
    You seem to assume that tariffs are the norm, and free trade was shafting those people unfairly. I think free trade is the norm, and tariffs are artificially preventing people who are unable to compete from being put out of business.
    - riazrizvi 10y ago
      I'm not making an assumption about some undefined norm. I'm saying trade policy and regulation we have enacted has taken too heavy a toll on one half of the country, to benefit the rest.
      - chillacy 10y ago
        I'm saying Tariffs we have enacted in the past has taken a toll on us all to help a few in those protected industries. Tariffs are essentially a tax on all of us, with the proceeds going to businesses in a specific industry. Consider Obama's Tire Tariffs in 2009: we all collectively paid over a billion dollars to save maybe 1200 jobs: https://www.washingtonpost.com/news/wonk/wp/2012/10/23/how-obamas-tire-tariffs-have-hurt-consumers/ https://www.washingtonpost.com/news/wonk/wp/2012/10/23/how-o... And it does matter what the norm is. Look: if you want to be the tallest tree in a forest, you can either get lots of water and sunlight and effort to grow the tallest. Or you can chop all the other trees down so you're the tallest. Free trade with minimal government favoritism is allowing the best trees (analogous to the best business ideas) to thrive and grow the tallest. Tariffs are akin to chopping down a few feet from all the trees to boost up the trees which are growing in the shade or otherwise disadvantaged. In nature, those trees are supposed to die.
        riazrizvi 10y ago
        I agree with the tree analogy, it is suboptimal for all to benefit a few. But that is a policy tool which can be used to reverse the excessive cost of optimization born by one half the country to benefit the other half. It's about getting the balance right.

eru 10y ago

Your argument reminds me of one brought up in the P vs NP debate: what if we find that indeed P==NP, but the algorithms required take O(n^1000)? The answer is: in that cause, the convenient shorthand of P ==tractable and NP==intractable breaks down, and we have to come up with a better way to formalize this informal distinction we care about. However in practice, algorithms with running times in P usually have small exponents, like O(n^4) or so. To come back to GDP: yes, it would be weird if California would get all the nations GDP. In practice this doesn't happen---but if it ever did, we'd need a new measure to correlates with all the good things we actually care about.

riazrizvi 10y ago
The uneven distribution of GDP in the country is happening and it is precisely why the Democrats have been ousted from government this last time. The last 30 years of economic policy in the US has used GDP, evenly distributed GDP, as the measuring stick of trade deals like NAFTA and TPP. Trade deals which in total brought a net gain for the country, but over time have just demolished industry in certain regions.
- chillacy 10y ago
  You seem to assume that tariffs are the norm, and free trade was shafting those people unfairly. I think free trade is the norm, and tariffs are artificially preventing people who are unable to compete from being put out of business.
  - riazrizvi 10y ago
    I'm not making an assumption about some undefined norm. I'm saying trade policy and regulation we have enacted has taken too heavy a toll on one half of the country, to benefit the rest.
    - chillacy 10y ago
      I'm saying Tariffs we have enacted in the past has taken a toll on us all to help a few in those protected industries. Tariffs are essentially a tax on all of us, with the proceeds going to businesses in a specific industry. Consider Obama's Tire Tariffs in 2009: we all collectively paid over a billion dollars to save maybe 1200 jobs: https://www.washingtonpost.com/news/wonk/wp/2012/10/23/how-obamas-tire-tariffs-have-hurt-consumers/ https://www.washingtonpost.com/news/wonk/wp/2012/10/23/how-o... And it does matter what the norm is. Look: if you want to be the tallest tree in a forest, you can either get lots of water and sunlight and effort to grow the tallest. Or you can chop all the other trees down so you're the tallest. Free trade with minimal government favoritism is allowing the best trees (analogous to the best business ideas) to thrive and grow the tallest. Tariffs are akin to chopping down a few feet from all the trees to boost up the trees which are growing in the shade or otherwise disadvantaged. In nature, those trees are supposed to die.
      - riazrizvi 10y ago
        I agree with the tree analogy, it is suboptimal for all to benefit a few. But that is a policy tool which can be used to reverse the excessive cost of optimization born by one half the country to benefit the other half. It's about getting the balance right.