Fart Party Interview
I did a really fun interview with (my favorite indie comic) Fart Party creator Julia Wertz this week, and she posted it on her blog simultaneously with its publication in Vice Magazine. I'm linking to it because the interview ends up addressing a whole lot of the issues brought up in the comments sections here over the past couple of days.
Wertz: Last year, Bush said the following about America's economy: "A future of hope and opportunity begins with a growing economy – and that is what we have. … This economy is on the move, and our job is to keep it that way, not with more government, but with more enterprise.." – President George W. Bush, State Of The Union Address, 1/23/07A quick glance of the White House's official economic overview creates a vision of America with a strong economy. It purports that "American workers are finding more jobs and taking home more pay" and that the unemployment rate was dropping. However, we all know that's bullshit. Since Bush took office, our national debt has soared to over 3 trillion, unemployment rates are up, and college tuition, energy, healthcare, rent, fuel costs, etc are raping our wallets on a daily basis. I can barely afford bagels and coffee these days. What the fuck?
Rushkoff: Well, there's two big fallacies on which the pro-market faction is operating, here. The first is that the metrics we use to measure economic growth have something to do with how well people are doing. Economic growth is measured with what they call the GNP, or Gross National Product. This stands for all the economic activity. So if I shoot you and you (or your insurance company) have to pay someone to put your brains back in, that's economic activity and makes the GNP go up.
If a factory comes to a town, puts three small local firms out of business, hires most of the town, pollutes the groundwater making the land unusable for agriculture and then goes out of business putting the entire town out of work, it can still be measured as a positive for GNP. The money spent on mental health, environmental cleanup, and shipping in frozen food all goes into the metrics for growth.
Death is growth.
(Douglas Rushkoff is a guestblogger)
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-Not to mention that unemployment rates are only calculated by looking at those receiving unemployment compensation. If you were fired from your job, you are SOL. If you go beyond the few months that unemployment pays out, you are no longer counted, although you may still not have landed a new job.
Taking home more pay is a fallacy too. Average workers in the US are actually losing ground, while CEOs and those in the upper echelons of business are the only ones reporting salary gains. They are the only ones that seem to matter to bushco. They are the only Americans he's interested in, and the only ones getting bailed out.
And many wage earners are bringing home less money when their employers cut back their hours because of the slowing economy and because companies' expenses are way up.
It may sound like campaign rhetoric, but I do think there are many entrepreneurial opportunities for clean and green businesses. Especially if government steps up and puts some reasonable environmental regulation in place. If more houses were required to convert solar energy, for example, imagine all the jobs that would be created putting that in place. R&D, construction, inspection, maintenance, etc.
McCain/Palin in "08! cuz we NEED 4 more years of this crap!
Julia is frigg'n hilarious and intelligent.. I've been a big fan of hers for a while (and may had an internet crush)...
good for her and hope to see her at APE (but not in a stocker sort of way)
read her comics they ROCK!
The national debt has not soared *to* 3 trillion dollars, it's increased *by* almost 4 trillion dollars under Bush (so far). The total is now around $9.6 trillion (from $5.8 trillion when he took office). The Treasury Secretary just asked Congress to lift the legal ceiling on the federal debt to $11.3 trillion from the current $10.6 trillion.
Rushkoff Rocks my sock off. Please sirs (and misses, of course) may i have some more.
Six comments, and no one has blamed Clinton? No libertarians posting links to a devastating defense of enlightened selfishness on lewrockewell.com?
This bailout thing has got folks spooked!
"Death is growth "is at the root of the problem. Figuring how to make our economy life based is a challenge that has been ignored. It's easier to create another war.
STEFAN@7: The economy was strong under Clinton, and Americans enjoyed unparalleled prosperity, rising from the ashes of many many years of Republican recessions, as we began to transition from an industrial to a serviced based economy. Whatever else you may criticize his administration for, the economy was gleaming. It took less than a year for bushie to tear all that down, and it's only gotten worse every year since.
GNP is a bogus stat. Most economic "indicators" are bogus stats (e.g. CPI as a measure of inflation, the aforementioned unemployment rate, etc.) That was the gist put out by Kevin Phillips when he wrote the article in Harper's which became Bad Money.
Clinton balanced the budget and reduced the military (i.e. cost cutting). Sure, Alan Greenspan was chair of the Fed and also built-up an artificial boom by doing exactly the opposite of everything he's ever said should be done before or after he was chairman of the Fed. But at least the Bill Clinton years were when the USA had no faceless "enemy" to excuse the corporate welfare for the military-industrial complex. It was after the mythology of Communism as an evil empire, but before the phantom menace of Terrorism.
We need to return to that "pre-9/11 mindset", forget this "terrist" nonsense (guess what, we've always had dangerous nutjobs and we'll always have dangerous nutjobs, get over it), and stop throwing wealth into the sinkhole of the Wall Street / Military cabal.
(Fiat money exists so that governments can wage war without raising taxes or selling war bonds. Eliminate the fiat currency system and we'll eliminate the wars... not the skirmishes or all violence, but at least the big expensive deadly wars -- like the USA has in Iraq and Afghanistan now.)
#9: I was being arch.
Clinton is as under-appreciated as Reagan is overrated.
Reading that post I couldn't help thinking of the "one little cherry" scene from The Fifth Element.
http://www.youtube.com/watch?v=d7VjQp7jx9s
STEFAN@11: Glad to hear. I didn't like having to be a Clinton defender, but I am tired of right wing revisionist history. Glad to see we agree.
That said, I can't forgive him for NAFTA. But one gaff in 8 years is still less than bush had with 1 week in office.
While GNP does have its problems the specific critiques Douglas advances are weak. While destructive events such as murders (the classic example is building pyramids) can cause an increase in GNP the loss of productive resources in the examples he gives would reduce GNP in the future.
Death is only short term growth.
After reading a few of Douglas' posts I think he needs to put a great deal more effort into understanding the mundane but essential economic and financial theory before he is competent to write the bigthink posts that he wants to.
JDAR,
IANAE, but death is only short term growth when the specific subject is isolated and viewed over time. But the GNP doesn't work that way. It's a snapshot of the big picture and so it trends upwards. When you look at that big picture, long term negative impacts are easy to miss- because there are always short term examples of false "growth" occurring everywhere to cover up the long term negative effects of the model.
Until everything starts falling apart at once...
...And we are at that point now.
This idea that GNP should only measure good things is silly. It's certainly better for the economy for people not to get shot, but getting shot is just one example of a bad thing that requires a paid service. The doctor gets paid, the hospital gets paid, the ambulance driver gets paid.
Similarly, it would be more ideal for me never to be hungry. Is food an illegitimate component of the economy? Are legal services?
I agree that we should focus on different metrics than GDP, like the distribution of income and wealth. But we should stop morally judging what's legitimate economic activity.
The worst thing that a new factory in a small town can do is to con the local government into selling revenue bonds to get free plumbing, tax relief, etc. Then the little town grows an infrastructure to meet the new population bubble. This includes bigger and newer schools, streets, utilities, and services. Support businesses, Lowes, chain grocery stores, and fast-food franchises pop up. The company sends manufactoring and distribution proceses overseas, and closes the local factory in the small town. Local depression ensues. Oshkosh B'Gosh did this all over Kentucky and Tennessee in the early nineteen-nineties, while chasing non-union, cheap labor.
In response to the "Death is Growth" statement, no one has posted the Parable of the Broken window yet?
"The parable describes a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.
The fallacy of the onlookers' argument is that they considered only the benefits of purchasing a new window, but they ignored the cost to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he obviously could not have spent it on something else. For example, the shopkeeper may have spent the money on bread and shoes for himself, but now cannot so enrich the baker and cobbler because he must fix his window.
Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more."
Growth is Death doesn't show the whole picture, while there will always be jobs clean up people's destruction, economic activity would be maximized if no destruction occurred at all.
Phikus,
IANAE = I am not an economist? Note that GNP is an aggregate of millions of individual effects. It will only trend upwards if the weighted average of those effects is positive.
I may be putting words in your mouth here but you seem to be asserting that 'false growth' effects can overwhelm the negative growth effect of the resource destruction that initiated them. However, the resource destruction is persistant while the 'false growth' effects are short-term.
You would need an exponentially increasing number of 'false growth' effects each period to overwhelm the sum of the resource destruction loss in all the previous periods's.
Note that this model assumes a static economy but the key point is that any individual 'false growth' effect is transitory and cannot be covered up by more 'false growth' effects in later periods without creating an exponential series that would quickly overwhelm 'real growth'.