The Problem with Economists

2016 October 9
tags:
by drdog09

The Dismal Science, Economics, has a fundamental flaw at least how it is practiced with the politicians involved.

A generic example. You are in your car. You set the trip odometer to 0. You take your trip, 300 miles, and arrive safely. Now your regular odometer has also increased by a similar amount. Now you have increased the value of your pleasure by having an uneventful trip. You have decreased the total asset value of the car as well. Now the trip odometer represents the quarterly and yearly GDP prognostications we hear from economists all the time. The regular odometer would represent the cumulative value that the economy currently posses plus the added GDP. That is a number we never hear of. Now there are correctives, like depreciation of assets, creative destruction, etc. but we will leave them aside for the moment.

Bottom line is our entire economy is measured by the equivalent of a trip meter via quarterly GDP numbers. That’s not exactly a reliable gauge of how the economy is doing. For example, over a 100+ years Telecoms installed a multibillion dollar PSTN network. Ooohs and Aaaaahs. Then Skype comes along. More Ooohs and Aaaaahs as we now have video to go with the audio. But the net-net to the economy may very well be a loss. The net revenue and asset value of the PSTN is diminished due to the fact that Skype is a near free service. (appropriate the ISP fees as you please.) No I would not want to lose Skype but it is a creative destruction instrument.

Another. Use Amazon, Dillards, Macy’s, online shopping service? YOU are now the clerk and a retail clerk loses as a consequence. Another creative destruction moment, and no I would not want to go back. (I have lost count of the surly clerks I have met over the years.)

Another. If Google and their competitors get it right, the largest employment category ‘driver’ will disappear. How does an economy adjust to a loss of 10m+ positions?

The best stab most econ majors call such events are black swans. Highly imprecise in my book.

In the project mgt game there is a tool called EVA, Earned Value Analysis. Essentially a series of snap shots to the total value added less the direct and overhead costs of the project. If its a plus, keep going. Otherwise stop. It would seem plausible to use these same techniques in broad strokes, the economy is too complex for precise measurements, as to whether certain actions are useful especially to govt efforts.

My belief is that the US economy is contracting and has been for nearly twenty years. The fact that there are 94m Americans out of work but not counted is a bright indicator of that fact. I also believe that the way the economic markers are counted does not factor in service displacement correctly.

What do you think?

33 Responses leave one →
  1. 2016 October 9 3:37 am
    [1]
    bc3b permalink

    While NFL viewership is down “because of the election,” college football viewership is actually up this year perhaps because of: 1) the national anthem protests and 2) because the college game offers a more exciting (and unpredictable) product. Who would have thought that Washington State, which lost to FCS Eastern Washington a few weeks ago, would have handily defeated the mighty Stanford?

  2. 2016 October 9 5:17 am
    [2]
    bc3b permalink

    Today I will be watching zero NFL as the lions are playing the Eagles, a team with three thugs who do the black power salute during thr national anthem.

  3. 2016 October 9 6:45 am
    [3]
    justrand permalink

    zero NFL for me…and for the rest of this season

    I will watch the debate…just to see if Trump can withstand the OUTRAGE!!! police

  4. 2016 October 9 6:45 am
    [4]
    drdog09 permalink

    I still ponder how parolees can meet on a football field and not break parole…

  5. 2016 October 9 6:48 am
    [5]
    drdog09 permalink

    Trump: Give me 15min uninterrupted to say whatever I want starting now. You do whatever you want after that.
    Mod: Ok.

    Would love to see it, but it won’t happen.

  6. 2016 October 9 6:55 am
    [6]
    mulletover permalink

    Wait till the 80,000 page tax code is replaced with a 3×5 mailer, and count the high salaried jobs that are lost to the economy. My early career as a cpa was in the days of a 10 key adding machine and 13 column worksheets way before the early Compaq personal computers. Tax accountant jobs survived the rapid progress of technology because the tax code continued to become even more complex. What they won’t survive is “state your income, send it in.”

  7. 2016 October 9 6:57 am
    [7]

    https://theconservativetreehouse.com/2016/10/09/two-odd-political-stories-that-carry-a-clintonian-style-connection/

    Look for this to come up tonight gotta love how they set this one up to just technically ‘sit on the books’ in NY after being shown as a complete fraud in CA,
    so they can play the ‘ignore any and all facts, it’s the seriousness of the charge!’ angle.

  8. 2016 October 9 6:58 am
    [8]
    bc3b permalink

    NHL regular season begins this week. Between college football, baseball playoffs and the NHL, who needs the NFL?

  9. 2016 October 9 7:07 am
    [9]
    JBoz permalink

    Well, I have to say Mrs Boz was quite appalled by DJT’s bawdy talk. I’m sure that truth be told, the women on this blog were as well. I was too, but I’ve heard talk like this before so it didn’t hit me as hard as it did the Mrs. Full disclosure here, I drop an occasional “F bomb” from time to time (and so does the rather sophisticated Mrs Boz), but I haven’t used the “F word” to describe an actual sexual act since I was maybe 25, and she has never used it in that way. And I use the “P word” to describe wimpy spineless men (like Paul Ryan), but never to describe female genitalia since I was maybe 15. It wasn’t so much the disrespect to women that bothered her as much as the complete immaturity of a man who was talking like that in his late 50’s. I didn’t try to stop her from feeling this way because in fact, I felt the same way. What a childish bonehead!

    Anyway, she was a reluctant DJT supporter before – mainly as a protest vote against Hillary. Upon hearing the DJT recording, she proclaimed that she could not vote for the man, nor could she vote for Hillary. She was going to sit out the election. So, with my wife as my hypothetical proxy for all women voters, I was at least encouraged by the thought that the locker room talk wasn’t going to create a stampede of voters for HRC.

    Over the course of yesterday as we were driving back home from Virginia and discussing the events of the day, I noticed a distinct shift back to a “Never Hillary, maybe Trump” stance. Then when a very obese woman smoking a cigarette cut her off (Mrs Boz was driving at the time), she let loose a string of very unflattering “superlatives” about the woman, including a few F bombs of her own, that would make Rosie O’Donnell’s head explode. Now my wife is a very sweet, kind, educated and classy woman, but she definitely has her moments. I mentioned something like “OK, imagine if what you just said was caught on tape, and then played 24/7 by a media who was hellbent on destroying you. Do your worst private moments really define who you are as a person?”

    As of this morning, she has moved from “maybe Trump” to “probably Trump”. I think this will all settle down…the first 24 hours were the worst, but it’s out there and as people process it and work through it in their minds, it won’t have much impact longer term. This was a huge flare up, but can hopefully burn itself out just as fast. The Wikileaks drop that the audio recording was intended to counter could and should have a lower flare-up factor, but could become an escalating burn that gets out of control over time. Let’s hope that despite what the MSM instructs women to feel, Mrs Boz is the true bellwether.

  10. 2016 October 9 7:34 am
    [10]
    bc3b permalink

    This isn’t an election for Pope, although it’s turned out that the last election for the Pope wasn’t really an election for the Pope either. Like the US, the Catholic Church got a community organizer rather than a true leader.

    On one hand you have a man who has used very lewd language. On the other hand you have a women who enables a husband who has enabled a husband who has done everything from rape to taking more than a dozen trips to an island known for underage prostitutes.

    All that pales in relation to the real issue: the future of the country. Do you want a country we will not recognize: judges making decisions based on personal feelings, open borders, unlimited “free” trade, back room deals, “play for pay,” etc. Wikileaks show that Hillary has stated she has two positions on issues – a public position (telling the people what she wants them to hear) and private positions (what she will actually do). That’s why she won’t release the scripts from many of her speeches.

    Locker room talk or a socialist USA. Which is more important?

  11. 2016 October 9 7:43 am
    [11]

    9 – Actually majority of gop not that appalled.

    http://www.politico.com/story/2016/10/politico-morning-consult-poll-229394

  12. 2016 October 9 7:45 am
    [12]
    Eph permalink

    KH,

    LA Times/USC update?

  13. 2016 October 9 7:58 am
    [13]

    12 – Was too busy to go look yet today.. hold on…

    USC\LAT
    T: 45.5
    C: 43.3
    T+2.2
    Trump down another .6 (his lowest since 9/23)
    Hilda up .3
    Hilda voters intention to vote for her highest ever recorded.
    Trump voters intention to vote up a little from yesterday.
    “who will win regardless of your vote” – He lost ground again continuing the slide over the last week.

  14. 2016 October 9 7:59 am
    [14]
    bc3b permalink

    As always, there will be a debate thread at BJG tonight.

  15. 2016 October 9 8:01 am
    [15]
    JBoz permalink

    11 – totally agree, but the point is the first time you hear it it’s pretty cringeworthy. The second time you hear it, less so. Each time the MSM replays it, the less impact it has. But the first time I heard it – yuck.

    So, I think it might go like:

    WTF > Gross > Why would he even say this? > Heard it before > Said it before > Yawn > Hillary sucks

    The process above can take anywhere from a few minutes to a day or two.

  16. 2016 October 9 8:09 am
    [16]

    15 – Test you wife’s reaction to #7, bound to come up tonight, certain elements are already trying to push it.

  17. 2016 October 9 8:30 am
    [17]

    Completely as expected\predicted:

    CNN:
    “The first set of questions at Sunday night’s presidential debate will be about Donald Trump’s vulgar comments on a newly published 2005 videotape, and the fallout from it.

    And Hillary Clinton will get the first question.
    …”

  18. 2016 October 9 8:41 am
    [18]
    Eph permalink

    Prediction: debate 2 has steep drop off in ratings.

  19. 2016 October 9 9:11 am
    [19]
    drdog09 permalink

    If the p@@y comment is the October surprise it was dropped too early. Like JBoz points out in 15, it wears out quickly. Another to come I presume.

  20. 2016 October 9 9:22 am
    [20]
    drdog09 permalink

    Wish I had thought of it….

  21. 2016 October 9 9:37 am
    [21]

    19…..Trump may have a couple of his own.

    18….I did not watch the first but will watch this one……time to get ready for War.

    7……that will light the flame that torches the R wing of Uniparty forever. It might beat us but the Deplorables will live on.

  22. 2016 October 9 10:08 am
    [22]
    bc3b permalink

    drdog09 #19

    My guess is the timing had to do with the debate tonight.

  23. 2016 October 9 10:14 am
    [23]

    18 – Probably down but probably still like ~70 million I’m thinking. I’m probably gonna do the record it and watch it after it’s over thing. I’m expecting a four ring circus sh1t show. In the end I really don’t give a sh1t I’m voting for Trump no matter what the fk happens or doesn’t happen. Only reason for me to bother watching it to sort of gauge if the miracle is still possible. 😉

    19 – It’ll be the bs rape thing, at least I’m fully expecting it tonight if Trump goes on the attack, seems telegraphing is going on for networks etc to be ready with it.

    21 – Well I hate them both of course, but yeah one you expect it from, one you shouldn’t expect it from yet these days it seems just as common that it is expect from them as well.

    22 – Indeed.

  24. 2016 October 9 10:18 am
    [24]
    Eph permalink

    21. Mp,

    And therin lies the rub

  25. 2016 October 9 11:47 am
    [25]
    gnqanq permalink

    I consider myself an amateur economist (having 9 courses in economics – 2 short of having a major).

    The biggest problem with the economy for the last 100 years is government intervention. For a REAL FREE MARKET to work is to have as little government intervention/control involved. Anything else is NOT a FREE MARKET, it is NOT REAL CAPITALISM. It is some level of SOCIALISM which has NEVER worked. Why do you think CAPITAL flees certain markets and is attracted to other markets.

    Thus WHY Liberals – Progressives – Socialists BELIEVE they need global control. Thus eliminating the ability for CAPITAL to flee.

    This is all going to end badly. Always has. Go back to what Putin said 8 years ago. He stated that Russia had gone down that road for 70 years and it did not work. He warned us and we did nt listen as we all wanted are FREE STUFF that aint free.

    Prepare accordingly.

  26. 2016 October 9 11:51 am
    [26]
    drdog09 permalink

    Trump talks Trash, Hillary does Trash.

    Lets keep that in mind.

  27. 2016 October 9 11:55 am
    [27]
    drdog09 permalink

    26,

    I can’t disagree. My beef is that all the Kenyesians think that piling on quarterly GDP numbers are always a positive effect to the economy. I seriously doubt that Skype is a net positive to the economy. Saves users money, but does not do so for the economy as a whole.

  28. 2016 October 9 12:09 pm
    [28]
    gnqanq permalink

    drdog – agree with you. Lot of inflated numbers BUT no real improvement in standard of living of the people.

  29. 2016 October 9 12:17 pm
    [29]
    gnqanq permalink

  30. 2016 October 9 12:40 pm
    [30]
    drdog09 permalink

    30,

    Just wait. The two perps will get off for ‘time served’.

  31. 2016 October 9 1:20 pm
    [31]
    bc3b permalink

    Palm Springs man who shot three cop, killing two, is Latino gangbanger (photo at link):

    http://ktla.com/2016/10/09/man-arresteds-in-connection-with-fatal-shooting-of-2-palm-springs-officers/

    That’s three California cops killed by young men of color in less than a week. I’m sure we will be hearing from Colin Kaepernick, his NFL thug buddies and the rest of the BLM movement any second now.

  32. 2016 October 9 1:36 pm
    [32]
    drdog09 permalink

    mpt,

    Probably true, but rest assured somebody ‘got off’ on the menage de trois. 🙂

  33. 2016 October 9 3:50 pm
    [33]
    drdog09 permalink

    Are we really going to let sniveling pissants like this woman define the future of this country?

    Women like her are now in the military. Tell me how that works out when her position gets over run?

Leave a Reply

You must be logged in to post a comment.