Mailvox: on GDP calculation

Anonymous writes:

OF course if the calculation of GDP is a bull crap meaningless equation there are a lot of implications to that, and a lot of economic terms that then also become meaningless.

Exactly. When I was taking Macroeconomics – a required course – the professor called me into his office and asked why I was only getting a C in the course. He said that he had realized that I must not have been reading the textbook lately because of the way I answered some questions on the last test.

He was more than a little shocked when I told him that I not only hadn’t read the book, I didn’t even own it and had no intention of buying it. After I explained Mises refutation of Keynes, criticized both the Keynesian GDP calculation and the IS=LM model – yes, Investment=Savings might be a valid equation in a world where no one can borrow money, the USA saves no money and yet we still have a boatload of investment somehow – my professor kindly suggested that perhaps I might prefer doing an independent study under his oversight instead of taking Keynesian 301 nonsense in the next term.

Most economic terms are meaningless. The models are laughably inaccurate and predict nothing. The CPI is fiction. GDP is fiction. Productivity measures are howlingly ludicrous. Mainstream economics, i.e. Keynesian economic measures, consist of illusion stacked upon illusion all piled on top of a foundation of lies. If you actually bother to count material goods or track prices on your own, you’ll quickly see that things just don’t add up.

Bane and the Broken Window fallacy

Bane reconsiders big government:

One of my Marines works in Supply, and he orders literally millions of dollars of stuff daily from vendors. Government vendors? No! Private vendors. Civilians. Civilians who are so damn glad to be getting these orders they could just shit.

This is how they feed their families, and are able to hire people so they can feed theirs own families. The vendors go out and buy things from other vendors so they can make the stuff for the Marines, and the circle of life continues. That money Uncle Sam ‘stole’, is pumped back into every community in this country in one way or another. Stop that flow for one week, and try to imagine the state this country would be in…..

Money, sent to the central fountain of Washington DC, and then sprayed up in the air to come back down and water the whole country. We are a Super Power for several reasons, and I am beginning to believe that this system is one of them. And it supports at least two of the other Reasons: Our Military, and our highway and transportation infrastructure.

Wanna see a town die? Pull all of the government contracts and funding and subsidies from it and let it try to fend for itself. Some make it. Most won’t.

Frederic Bastiat demolished this fallacy back in 1850. It goes thusly:

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Bane also neglects to consider that the government not only imposes these hidden opportunity costs by redirecting income that would have been spent in other ways, but that a good portion of the money it is spending is borrowed. The federal debt, as of August 19, is $7,926,125,407,102.74. At 4.239 percent on the 10-year bond, that’s 335,988,456,007.09 in annual interest payments or $2,799.90 for every worker in the country. Since the average worker makes $29,280.68 and the current savings rate is zero, those interest payments rob the economy of almost 10 percent of consumer spending.

As for the highway system’s role in making America a superpower, the country had already won two world wars before the Federal Aid Highway Act of 1956 was enacted. It is the combination of America’s size, wealth and technological advancement that makes the USA a superpower; any reduction of one of those three elements will reduce America’s preeminent status in the world.

Borak sings

In my country there is problem,
And that problem is transport.
It take very very long,
Because Kazakhstan is big.

There’s a video of the whole song. Borak is hilarious, as usual – so when do we make the sex? – although I think the reaction of the crowd to the cameras makes it apparent that they understand what’s going on from the start. Contrary to the common urbanite belief that their disdain for all things country goes undetected, rural people are perfectly aware of what their big city counterparts think of them and they often play up their hickitude as a passive-agressive means of mocking their mockers.

I don’t particularly enjoy being around country folk, for the most part. But divergent interests and grammar aside, I’ve never found them to be any less intelligent than city and suburban people, and they are often a good deal less asinine. I may not be inclined to listen to a farmer pontificate on the merits of crop rotation, but at least he serves a honest purpose in life, which is more than I can say for the average stockbroker or real estate agent.

Attempting to derive an idea of massive anti-semitism lurking beneath the surface of the heartland from this is, I think, a significant reach on par with those alarmist predictions of Kristalnacht II being brought about by the release of The Passion. The East Coast media that constantly wrings its hands about this sort of thing always forgets that most people in the Midwest and Southwest have not only never met a Jew, but they think no more about Jews than they do about Eskimos or Vanuatuans.

It is particularly bizarre that American Jewish leaders will get upset about movies and Merry Christmas greetings and then publicly cheer a mass Jewish expulsion and the destruction of Jewish-owned property. As I mentioned in my column today, I rather doubt a similar action in New York City would meet with similar approbation.

Mailvox: a rabbi writes from the well

Rabbi F writes from Israel:

Amen, Vox, right on, anytime you’re in the area come up and see us. Now write on the plight of the refugees, who are being treated with incredible cruelty in order to destroy their faith and communal support and cut their birthrate along with the rest of the God-fearing Israelis. The ruling clique is afraid that we will outnumber them in a few years and take over..

Democracy can sure be a bitch when those nasty demographics start to come into play. This is one element of the anti-settler action that I had not really considered before, but it makes sense that the secular Jews, who are as reproductively challenged as secular Americans, would have reason to be very worried about the birthrate of religious Jews as well as Israeli Arabs.

In any event, it makes it clear that to see this as merely Jew-on-Jew is not correct, that there are serious divisions in the Jewish world just as there are in Blue-Grey or Red-Blue America.