Comments on: Counterparties: But are you happy? http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: realist50 http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43694 Sun, 07 Oct 2012 04:49:17 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43694 *mention automobiles as an example

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43693 Sun, 07 Oct 2012 04:47:59 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43693 @TFF – you raise a good point, and that’s something I’ve wondered about myself. I believe there’s a factor that goes the other way, however, in thinking about whether GDP growth fully picks up the impact of new technologies and improvements in product quality.

For the former, it’s questions like, in looking at GDP in 1900 vs. GDP today, how do you take into account goods and services such as air travel, central A/C and heating, computers (etc. – the examples are nearly endless) that couldn’t be bought for any price in 1900?

For the latter, I’ll automobiles as an example. I don’t believe that GDP comparisons fully capture, say, the vastly greater reliability of a car being built now vs. a car that was built in 1970.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43675 Fri, 05 Oct 2012 22:30:19 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43675 GDP is fine for capturing economic transactions, but that is about it. If I earn $50 for an hour’s work, pay $20 in taxes, and pay somebody $30 to mow my lawn, then I’m economically no better off than if I had decided to mow the lawn myself (except that I don’t enjoy it). Yet the GDP jumps by at least $80 in that convoluted transaction.

Two-earner households, even in the middle class, outsource many activities that were once performed in-house. Child care, cooking, home maintenance and cleaning… There are some benefits to this system (especially to those who earn much more working than they pay for the help), but it increases GDP by more than it increases economic well-being.

Would be interesting for an economist to go back and add in the “mommy wages” over the decades (but please use something realistic rather than the inflated figure you see publicized on Mother’s Day). Has GDP really risen as much as we think?

I know we wouldn’t be nearly as wealthy today if we had earned more instead of de-monetizing part of our income for a decade.

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By: QCIC http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43671 Fri, 05 Oct 2012 17:09:46 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43671 Its nice that economists are only 50 years behind what is obvious to the thinking man. GDP, pshawwww.

If everyone stops watching TV and instead go take walks in the park and likes that more and is healthier, but there is less overall need for labor so everyone works 39.8 hours instead of 40 hours we are not somehow “worse off” just because there is less stuff.

Economists have become so enthralled by their models and what they can measure that they have lost touch with what they are actually doing (allocating goods and labor efficiently).

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By: spectre855 http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43638 Thu, 04 Oct 2012 13:51:10 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43638 Economic numbers are so “virtual” now. The US used to be a manufacturing/agricultural economy so GDP was rather more tangible. So much of what we consider gdp gain or loss now is based on service that doesn’t add any real societal benefit. Look at how much the financial services industry contributes to GDP. Look at how much Facebook contributes. Look how much legal services contribute. These things don’t employ that many people (relatively speaking) and they don’t make our lives better. Even manufacturing, which still contributes a lot to GDP, is mostly outsourced now. All of these things benefit very, very few people but that GDP number is something that is supposed to represent progress for us all.

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By: dWj http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43632 Thu, 04 Oct 2012 03:02:56 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43632 GDP is fine; its value as a welfare proxy is dubious, though I’m not sure you’ve made the case for it. (I’m still wary of using “happiness” as something necessarily to be maximized by policymakers, either.) In particular, if the Fed were to start trying to target nominal something, GDP or GNP would make sense; the idea that the fed should loosen policy because happiness is too low is questionable, the idea that it should tighten because happiness is excessive is ludicrous. GDP, especially nominal GDP, is a measure of economic activity that is mediated by the exchange of money, and there’s some reason for thinking that the regulation of the amount of money (in whatever sense) should follow the lead of the amount of it that’s needed. So, this may be nitpicking, but GDP is fine; it’s its misuse that is problematic.

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/10/03/counterparties-but-are-you-happy/comment-page-1/#comment-43630 Wed, 03 Oct 2012 23:20:26 +0000 http://blogs.reuters.com/felix-salmon/?p=18484#comment-43630 Mitt Romney quietly announces a good tax idea – it’s a very good idea (I don’t know if I ever used the words “good idea” and Mitt Romney” in the same sentence), but it will never fly with his base. Which is why he quietly announced it. And if Obama supports it, he will be attacked by supporters of Romney, who will quickly disavow himself of the idea.

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