GDP = National Income.
It is argued that GDP is not a reliable measure of well-being.
I agree.
Therefore income is not a reliable measure of well-being.
Therefore income inequality is not a reliable measure of the distribution of well-being.
And before you jump into my tribal pool, this could very well mean that well being is even worse than inequality metrics suggest they are.
And therefore my dog is some dog!
As long as WC raised the question about GDP being reliable or unreliable, which is not his point, may we digress into these numbers upon which the macro wizards rely on when wielding the swords of power?
As any good chemist knows, it does not help when evaluating an unknown if your test tubes are contaminated with tap water. Similarly, in business whatever information that is used to do anything has to be as good as possible, and if it has to be conveyed to anyone capable of being able to deal with the problem, it is best to convey that information clearly.
It should be no surprise that this does not happen all the time.
Without lapsing into job stories, let me say authoritatively that if one goes but two steps above the observer of the facts of any event the real truth becomes contaminated.
This is not to say we should throw up our hands and admit defeat; we shall never read Barron’s market laboratory or watch FBN or CNBC. Rather, the statistics the financial press publishes and which the NBER reads about before writing papers quoting everybody’s research has to be discounted heavily. So I saw the GDP growth figure last week, and the initial unemployment claims numbers too, and the revised numbers from other indicators.
My question is, if the head of a small company often has no idea of what his capacity is, how does anybody get to issue, for example, a number for capacity utilization?
I know this is getting into the weeds and threatens the livelihoods of a lot of people, not just economists, but also millions of others interpreting these numbers, and I do not mean to get them fired and go on unemployment. I am just asking them to round their numbers and say what they know and do not know.