People are always throwing GDP around as a measurement of growth. But as near as I can tell in computing GDP economists don't take into account borrowing. So if government (or some private business) borrows a lot of money to produce things GDP jumps. But that seems to me to artificial growth. GDP should not take into account the amount of production (or consumption) that was in fact funded by borrrowing from future income.
Anybody out there know if GDP Computation takes into account borrowing?
Tuesday, May 8, 2012
Monday, May 7, 2012
Politicians and Madison Avenue
Business Republicans generally approach government the same way they approach business, assuming the two can be managed the same way. One of the unfortunate side effects of this approach is they lose sight of the differences between images and reality.
In business focusing on image can produce good results for long periods of time (although it almost always leads to a loss of competitiveness eventually). American car manufacturers have a long history of focusing on marketing and neglecting quality, because their marketing skills enabled them to sell lots of cars by manipulating consumer perceptions. Eventually management groupthink gets so confident of their ability to manipulate consumers they ignore new challenges on the horizon.
But eventually some change in circumstances will turn the tables and consumers will no longer be as amendable to being controlled by an image that doesn't reflect reality and the company will probably end up in bankruptcy or disappear because they can't provide what consumers want.
Politicians have also leaned more and more on image and marketing rather than hard headed decisions about good policies. The Republican party in particular has been pretty successful marketing themselves the last 30 years and as a result they have become seriously infected by ideology built on the images they seek to project rather than the insights of data or history. Unfortunately when politicians focus to on image rather than reality, and sink into group think, we all suffer.
We as consumers and voters need to constantly strive to inoculate ourselves from image based reality by constant reference to history and valid data.
In business focusing on image can produce good results for long periods of time (although it almost always leads to a loss of competitiveness eventually). American car manufacturers have a long history of focusing on marketing and neglecting quality, because their marketing skills enabled them to sell lots of cars by manipulating consumer perceptions. Eventually management groupthink gets so confident of their ability to manipulate consumers they ignore new challenges on the horizon.
But eventually some change in circumstances will turn the tables and consumers will no longer be as amendable to being controlled by an image that doesn't reflect reality and the company will probably end up in bankruptcy or disappear because they can't provide what consumers want.
Politicians have also leaned more and more on image and marketing rather than hard headed decisions about good policies. The Republican party in particular has been pretty successful marketing themselves the last 30 years and as a result they have become seriously infected by ideology built on the images they seek to project rather than the insights of data or history. Unfortunately when politicians focus to on image rather than reality, and sink into group think, we all suffer.
We as consumers and voters need to constantly strive to inoculate ourselves from image based reality by constant reference to history and valid data.
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