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I think the next downturn will prompt the investigation for new indicators to measure economic health. What does the number of food assistance enrollees measure

I think the next downturn will prompt the investigation for new indicators to measure economic health. What does the number of food assistance enrollees measure if the government makes it much harder to receive assistance? What does the labor participation rate matter if you have millions of low-wage workers completely miserable (and from my experience, start abusing drugs because of that misery). I'm just blowing steam here, but it feels like the economy and it's measures has been decoupled from a large segment of society.

mpax 8y ago
They’ve always been decoupled, it’s just a lot more visible these days.
- ryandrake 8y ago
  To be fair, nobody outside of the government and financial media is claiming we are having “good times”. And it’s in both of their best interests to pretend we are in an economic boom.
  - merpnderp 8y ago
    There are lots of places in the US where jobs are booming and people are doing great. Like West Texas where 22 year olds are making six figures in the oil fields.
    - CynicalDio 8y ago
      Lots of places != Oil jobs in a handful of places
  - gwright 8y ago
    Consumer confidence is at an 18 year high. Obviously there are caveats but your characterization seems overly negative. https://www.reuters.com/article/us-usa-economy/u-s-consumer-confidence-races-to-near-18-year-high-idUSKCN1LD201 https://www.reuters.com/article/us-usa-economy/u-s-consumer-...
  - theandrewbailey 8y ago
    Let's not forget that both are in urban information bubbles.
NickM 8y ago
GDP is a pretty terrible measure of the economy, even if you're trying to look at the big picture and ignore the day-to-day impact on individuals, because it only measures creation of value and not consumption/destruction of it. If you destroy a city, GDP is not affected, but then if you rebuild it GDP gets a huge boost. In the end you're back where you started, but the numbers look great.
- Domenic_S 8y ago
  That still measures something meaningful doesn’t it? An alternative is that the city is destroyed and there are not enough resources to rebuild it.
- why_only_15 8y ago
  GDP is affected when you destroy it, because now all the people that rely on that city become much less productive (or die).
- simonh 8y ago
  >If you destroy a city, GDP is not affected Of course it is. Cities are engines for producing GDP. New construction, rolling infrastructure upgrades, the wages of all the people employed in it, the profits of corporations based in it, all add to GDP. Take away the city and all that GDP disappears off the books with it.
  - NickM 8y ago
    My example is a bit contrived, but it's a well-studied phenomenon that natural disasters tend to cause a net boost to GDP because of all the extra work needed to repair/rebuild/replace stuff. We can write this kind of thing off as a statistical quirk, but if we actually attempt to increase GDP via policy changes, then there are definitely some perverse incentives that arise.
    - simonh 8y ago
      The immediate effect may be lots of economic activity, presumably paid for by borrowing, but consider the longer terms effects. Disruption of infrastructure reducing (or increasing the costs of) economic activity, disruption of businesses reducing profits and costing jobs which reduces wages. Death and injury of workers again reducing wage receipts by making more people non-contributing. These affects could last decades. Obviously I’ve not performed any studies on this, but it seems to me there would be significant impact on GDP. I’d be interested to see the results if a full case study. I would find it hard to believe that the GDP of Puerto Rico, including reconstruction, has increased overall. It may depend on the scale though. A storm that knocks down a few trees and damages some buildings might generate a net gain if it’s not too disruptive but that gain must come from somewhere. Maybe increased future insurance costs, borrowing, increased taxation etc which would be difficult to quantify.
CamTin 8y ago
Yeah, and we can all hope that those indicators are things like "% of population with secure housing, healthcare, community, and income" and other actual measures of wellbeing, followed closely by actual government policies to provide those things directly out of tax revenue.
- knewter 8y ago
  this begs the question of government being the most efficient way to achieve these things. the story of capitalism versus communism is at least one indicator that this is not the Utopia you're seeking
  - CamTin 8y ago
    I happen to believe that we should at least try, rather than just hope moneyed interests provide for us by accident while pursuing their own orthogonal interests.

mpax 8y ago

They’ve always been decoupled, it’s just a lot more visible these days.

ryandrake 8y ago
To be fair, nobody outside of the government and financial media is claiming we are having “good times”. And it’s in both of their best interests to pretend we are in an economic boom.
- merpnderp 8y ago
  There are lots of places in the US where jobs are booming and people are doing great. Like West Texas where 22 year olds are making six figures in the oil fields.
  - CynicalDio 8y ago
    Lots of places != Oil jobs in a handful of places
- gwright 8y ago
  Consumer confidence is at an 18 year high. Obviously there are caveats but your characterization seems overly negative. https://www.reuters.com/article/us-usa-economy/u-s-consumer-confidence-races-to-near-18-year-high-idUSKCN1LD201 https://www.reuters.com/article/us-usa-economy/u-s-consumer-...
- theandrewbailey 8y ago
  Let's not forget that both are in urban information bubbles.

NickM 8y ago

GDP is a pretty terrible measure of the economy, even if you're trying to look at the big picture and ignore the day-to-day impact on individuals, because it only measures creation of value and not consumption/destruction of it. If you destroy a city, GDP is not affected, but then if you rebuild it GDP gets a huge boost. In the end you're back where you started, but the numbers look great.

Domenic_S 8y ago
That still measures something meaningful doesn’t it? An alternative is that the city is destroyed and there are not enough resources to rebuild it.
why_only_15 8y ago
GDP is affected when you destroy it, because now all the people that rely on that city become much less productive (or die).
simonh 8y ago
>If you destroy a city, GDP is not affected Of course it is. Cities are engines for producing GDP. New construction, rolling infrastructure upgrades, the wages of all the people employed in it, the profits of corporations based in it, all add to GDP. Take away the city and all that GDP disappears off the books with it.
- NickM 8y ago
  My example is a bit contrived, but it's a well-studied phenomenon that natural disasters tend to cause a net boost to GDP because of all the extra work needed to repair/rebuild/replace stuff. We can write this kind of thing off as a statistical quirk, but if we actually attempt to increase GDP via policy changes, then there are definitely some perverse incentives that arise.
  - simonh 8y ago
    The immediate effect may be lots of economic activity, presumably paid for by borrowing, but consider the longer terms effects. Disruption of infrastructure reducing (or increasing the costs of) economic activity, disruption of businesses reducing profits and costing jobs which reduces wages. Death and injury of workers again reducing wage receipts by making more people non-contributing. These affects could last decades. Obviously I’ve not performed any studies on this, but it seems to me there would be significant impact on GDP. I’d be interested to see the results if a full case study. I would find it hard to believe that the GDP of Puerto Rico, including reconstruction, has increased overall. It may depend on the scale though. A storm that knocks down a few trees and damages some buildings might generate a net gain if it’s not too disruptive but that gain must come from somewhere. Maybe increased future insurance costs, borrowing, increased taxation etc which would be difficult to quantify.

CamTin 8y ago

Yeah, and we can all hope that those indicators are things like "% of population with secure housing, healthcare, community, and income" and other actual measures of wellbeing, followed closely by actual government policies to provide those things directly out of tax revenue.

knewter 8y ago
this begs the question of government being the most efficient way to achieve these things. the story of capitalism versus communism is at least one indicator that this is not the Utopia you're seeking
- CamTin 8y ago
  I happen to believe that we should at least try, rather than just hope moneyed interests provide for us by accident while pursuing their own orthogonal interests.