51–60 of 297 posts
Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.
I think it’s not perfect but probably the best we have. People forgot or simply don’t realize how much worse life was just a couple of decades ago (in terms of nutrition, access to knowledge, clean water, material wealth).
Populism is best understood as the general public asserting elites have “broken the deal” that legitimizes their rule — and the public withdrawing their assent from the regime. They are correct that the technocratic managerialists on the past century have failed — and failed in a way damaging to the state/nation. (For US and EU at least.) In so far as we’re all discussing that (and have been for several years), they’…
I am not a supporter of Nigel Farage and his many different parties in the UK ('Reform' just being the latest incarnation), and I don't believe his policies offer any real answers.
But what the rise of Reform does show us is the utter disillusionment with the mainstream parties of the UK, who have spent the last several decades afraid to make meaningful changes. They tell people they can't have what they want because it would be too risky/expensive/whatever. We can't do that, the bond markets won't like it. We're running high on debt so we can't afford to make this better. Here, I'm going to add 0.4% to this tax so we can give this service an extra 0.3% budget.
All the while government takes more in tax every year but the country feels like it's in a state of managed decline as services struggle. People wonder where all the money is going and there's no particularly good answer. And the managerial politicians' cautious approach hasn't led to economic growth either, so people don't feel like things are getting any easier.
With that background it's hardly surprising that the populace flock to someone loudly offering change, even if it's bullshit change.
(I left the UK a few years ago but I do visit and keep up on the news. Australia is on a similar path but less extreme, though with accelerating house prices and other forms of inequality, and the collapse of our traditional centre-right, expect things to get more populist in the coming years)
Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.
What is a good measure of meaningful growth? Genuinely asking. I imagine all measures have pros and cons.
1. Look at income and consumption rather than production
2. Consider income and consumption jointly with wealth
3. Emphasize the household perspective (with this they seem to be focusing on more meaningful measurement of in-kind services and inter-sector payments, like government provision of healthcare and education, etc.)
4. Give more prominence to the distribution of income, consumption, and wealth
5. Broaden income measures to non-market activites (their examples here are things like childcare, where a shift from non-market childcare to market childcare over time can create the illusion of an increase in productivity)
Personally #4 is my biggest beef with GDP (and related measures like GDP per capita). Without some kind of adjustment for inequality, GDP can easily make bad things look good. What we need is not overall growth but equitably distributed gains; even a decrease in GDP could result in most people being better off if it occurred because of wealth redistribution.
I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.
It's the same as complaining that the temperature increased more in Fahrenheit than in Celsius.
EDIT: The total value is the same regardless of the fluctuations of currencies used to represent the value. Those are two independent issues.
Currencies fluctuate even if you keep them in checking accounts without investing them.
And yes, if you measure distance in feet, your son will go every year further away than you because his feet keep growing, while yours stay the same.
Earlier quoted context omitted.
What is a good measure of meaningful growth? Genuinely asking. I imagine all measures have pros and cons.
I said meaningful measure of economic health, not growth. :-) But I'm not sure. The book "Mismeasuring our lives" gives five recommendations for developing improved measures: 1. Look at income and consumption rather than production 2. Consider income and consumption jointly with wealth 3. Emphasize the household perspective (with this they seem to be focusing on more meaningful measurement of in-kind services and int…
Earlier quoted context omitted.
It's definitely not the best we have though. People have created all kinds of metrics which measured things in better ways more relevant to our human goals. It's an entire genre of publication in economics and some of them are very popular. It's a choice to ignore them. Also, see what djtango said. It's not that simple.
It's the best that has been used by a society that didn't later collapse though.
I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.
That logic is flawed. The end value and ROI for S&P500 is the same regardless of the currency used to display it. It's the same as complaining that the temperature increased more in Fahrenheit than in Celsius. EDIT: The total value is the same regardless of the fluctuations of currencies used to represent the value. Those are two independent issues. Currencies fluctuate even if you keep them in checking accounts with…
Earlier quoted context omitted.
I think it’s not perfect but probably the best we have. People forgot or simply don’t realize how much worse life was just a couple of decades ago (in terms of nutrition, access to knowledge, clean water, material wealth).
It's definitely not the best we have though. People have created all kinds of metrics which measured things in better ways more relevant to our human goals. It's an entire genre of publication in economics and some of them are very popular. It's a choice to ignore them. Also, see what djtango said. It's not that simple.
Being pedantic about how we measure progress might create the impression that it’s not about the progress but instead about being right.
I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.
That logic is flawed. The end value and ROI for S&P500 is the same regardless of the currency used to display it. It's the same as complaining that the temperature increased more in Fahrenheit than in Celsius. EDIT: The total value is the same regardless of the fluctuations of currencies used to represent the value. Those are two independent issues. Currencies fluctuate even if you keep them in checking accounts with…
Celsius and Fahrenheit doesn't work as an analogy because the rate does not change over time as it does with currencies.