NY TIMES: G.D.P. is broken …

Jay Owen Beyond GDP, Latest Headlines

“Ethical Markets is happy to see this repudiation of GDP in the New York Times!  We have been advocating this expansion of GDP for three decades, and notably in the European Union’s “BEYOND GDP“ conference in 2009  www.beyond-gdp.eu, in which I served on the advisory group and organizing committee.  Also see my paper co-authored with physicist Fritjof Capra “Qualitative Growth” (2009) www.ethicalmarkets.com  and our TV show “Steering Societies from GDP to the SDGs, “www.ethicalmarkets.tv”.  We are still inviting professionals to join in signing our 2010 Statement “TRANSFORMING FINANCE“.

~Hazel Henderson, Editor“

 

December 16, 2019

By David Leonhardt

Opinion Columnist

When the federal government announces G.D.P. statistics each quarter, it seems to be issuing an economic report card on American families. But it’s not. For most of the last 50 years, the national economy and the financial condition of most families have been following different paths.I’ve been complaining about our flawed economic measurements for years (here, here and here, for example). And for the first time, I’m optimistic that the situation may be about to improve.

My column today explains why.

The Commerce Department is working on an expanded version of G.D.P. and plans to release a prototype version next year. Several members of Congress — including Rep. Carolyn Maloney of New York, Senator Martin Heinrich of New Mexico and Senator Chuck Schumer of New York — are pushing to make this expanded version the norm.“The government is still using a black-and-white television,” Schumer, the Democratic Senate leader, told me. “We gotta catch up, so we get a more accurate picture.”The chart that I created for the column is the brief version of why the current version of G.D.P. is misleading.

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For more …Heather Boushey, president of the Washington Center for Equitable Growth, has previously written about the problem for The Times:Leaders manage by setting objectives, which is exactly what policymakers do when they point to rising gross domestic product as a measure of economic success. As Jack Welch, the former chief executive of General Electric famously put it, “What you measure is what you get.” But if you manage by the wrong measurement, it’s worse than having no metrics at all.