GDP As A Policy Metric, It's Not Just Not Right, It's Not Even Wrong

   (Commentary posted by Roger Erickson)

GDP Is Wrong

Steve Hansen says: "The most recent quarter being reported says the real economy is growing at 4.2%. Am I the only one who believes this is a lie?"

It's a hopeful sign when steadfast financial analysts start to question the very fundamentals of economics. That's when people normally focused on business & investing tactics and strategy finally start to pay attention to national policy.

I take that as a potentially very good sign.

I really like this author, Steve Hansen. He's helping the orthodox re-think faux fundamentals, strictly using their own concepts and jargon.

When even orthodox analysis says orthodoxy is no longer useful ... maybe we're closer to a phase shift than anyone can guess.

Hope springs eternal, simply because optimists are usually the only ones left standing in the end. :)

Is the grass half smoked, or half gone?   Define smoked.   :)

"The graph below demonstrates the difference between using the previous quarter as the reference point for determining headline GDP (blue line in graph below), and using the same quarter one year ago as the reference (red line in graph below)."

On the other hand, when the BLS routinely resorts to such sophistry ... maybe the glass is only described as looking half full ... when it's actually nearly drained.

Perhaps the real expectations theory is this electorate's feeling that we'll survive even our current batch of politicians ... because we're the ones who signed off on them.  Go figure!