ladelfina
Thinks s/he gets paid by the post
- Joined
- Oct 18, 2005
- Messages
- 2,713
came up in the now-closed Palin thread, but I thought it was worth a discussion, not least because I'd already written the response.. I hope we can stay in money territory.
I posted this link, expressing disdain:
Bush Has a Good Economic Record - WSJ.com
ERD50 asked:
ERD50 (and anyone else who wants to chime in), would you say the economy is good?
Assuming the answer is yes.. let's dig in: the one thing that struck me at first was the defense of income inequality: (too lazy so I'll paraphrase) "65 countries have greater inequality bla bla top quintile". That's supposed to encourage us, but there are 190-something countries in the world. I assume the 65 are places you and I would rather not live, like Zimbabwe. I just took this to be a pretty pathetic grasping at straws.
Intrigued by how wacky that was, and ERD50's challenge, I started to run down a few more of the initial points:
I view this as utter BS because the growth in GDP includes a financial and housing bubble that we will be lucky to recover from in our lifetime.
Financial services are 20% of GDP:
III - Gross Domestic Product
I assume this includes the "production" of things like MBSs: take mtg.s A+B+C and put a bow around them and sell them for greater than the sum of the parts. We know how that's working out.
GDP figures have diverged from CPI:
FT Alphaville » Blog Archive » Preachin’ the GDP good news since ‘78
And if you think inflation is higher than reported, that makes the inflation-adjusted GDP numbers even more suspect. If we look at PPI (producer price index; selling prices producers receive for output) it's 6-8%. Wholesale PPI is now practically 10%. Imported goods are 28% of CPI. Producers can't be selling at a higher price than people are buying, naturally.
US PPI wholesale inflation rate hits 9.8%, a 27-year record high
It's also misleading to look at GDP separate from population growth, which is almost 0.9%/year in the US. It's 0.6% in France, Japan's has been negative, and Germany and Italy flat. Looked at in those terms, Japan is on top for this period, while the US and France are a lot closer to each other, and to Germany/Italy.
Another way to grow GDP is to grow government. Bush's spending has been mind-boggling.. but for the GDP it's all good. In 2004 gov. spending equalled mfg. as % of GDP and I can only imagine that to have continued its trend:
Government now accounts for same percentage of GDP as manufacturing. | North America > United States from AllBusiness.com
So here are four major issues within just this single paragraph.
More misdirection. Does not take into account huge increases in the share of the top 5%, top 1%, and top 0.1% of earners; while growth is nice, any benefits have been concentrated. GDP per capita would be the same number if 300mm Americans perceived zero, and Hank Paulson perceived $13trillion (PPP). But that does not a healthy economy make.
Consumption fueled by consumer debt. Let's see figures on whether the French and the Germans have negative savings rates, what their debt/income ratio is, and what their avg. outstanding cc balances are. I don't think they have HELOCs, or at least not as a matter of course. Oh.. gee! Household savings rate is 14.4% in the EU:
http://epp.eurostat.ec.europa.eu/pl...REREL_YEAR_2007_MONTH_08/2-01082007-EN-AP.PDF
meanwhile:
Hmmmm.. let's review that $32,045 US consumption figure that makes Americans look so rich. Let's take away 14.4% (or more) to account for the extra amount Europeans save. Now reduce again by the higher amount paid in debt service (in Germany it is around 6.5% vs.14.5%).
Morgan Stanley - Global Economic Forum
14.4%+8% = a correction of 22.4%. Now you have a figure of just under $25k.. much closer to the lower-debt countries.
Another way to look at it is that if consumer debt is up 22% 2000-2008 then that certainly does its 70% part in contributing to the GDP being up roughly the same amount.
This was a real howler. The writer seems to feel that the people indicated in "per capita" are some mystery population distinct from taxpayers. Taxpayers are the ones who are putting in the "private funding" AS WELL AS bearing the tax burden for state-provided or publicly-insured care. The uninsured only get emergency treatment, not continuing care for cancer or diabetes or whatever.
The 9.1% the writer is talking about seems to be gov. spending only from the way he phrases the sentence, but may just be some fantasy number he made up, since if 9.1% = 45%, then that would imply total hc spending is an even larger percentage of GDP (20%!!) than those listed officially here:
OECD states 2005 US hc spending as 15.2% of GDP (2006 15.3%)
2005 spending for France and Germany 11.2% / 10.7% of their GDP
2006 spending for France and Germany 11.1% / 10.6%.
In France and Germany, though, everyone is covered, a far better deal for the money.
But you wouldn't expect a WSJ writer to point that out, necessarily.
Excel download with many stats here:
http://www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls
too tired to take on the rest.. I have to hand it to whoever wrote this, though, for their sheer capacity to shoehorn so many lies and misrepresentations into such a small space.
I posted this link, expressing disdain:
Bush Has a Good Economic Record - WSJ.com
ERD50 asked:
ladelfina, seriously, where is the bias in that article? I know you cringe at the title and the source, but there are some straightforward facts there, that I could not dispute w/o more research.
ERD50 (and anyone else who wants to chime in), would you say the economy is good?
Assuming the answer is yes.. let's dig in: the one thing that struck me at first was the defense of income inequality: (too lazy so I'll paraphrase) "65 countries have greater inequality bla bla top quintile". That's supposed to encourage us, but there are 190-something countries in the world. I assume the 65 are places you and I would rather not live, like Zimbabwe. I just took this to be a pretty pathetic grasping at straws.
Intrigued by how wacky that was, and ERD50's challenge, I started to run down a few more of the initial points:
WSJ- Economic growth. U.S. output has expanded faster than in most advanced economies since 2000. The IMF reports that real U.S. gross domestic product (GDP) grew at an average annual rate of 2.2% over the period 2001-2008 (including its forecast for the current year). President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton. This U.S. expansion compares with 14% by France, 13% by Japan and just 8% by Italy and Germany over the same period.
I view this as utter BS because the growth in GDP includes a financial and housing bubble that we will be lucky to recover from in our lifetime.
Financial services are 20% of GDP:
III - Gross Domestic Product
I assume this includes the "production" of things like MBSs: take mtg.s A+B+C and put a bow around them and sell them for greater than the sum of the parts. We know how that's working out.
GDP figures have diverged from CPI:
FT Alphaville » Blog Archive » Preachin’ the GDP good news since ‘78
And if you think inflation is higher than reported, that makes the inflation-adjusted GDP numbers even more suspect. If we look at PPI (producer price index; selling prices producers receive for output) it's 6-8%. Wholesale PPI is now practically 10%. Imported goods are 28% of CPI. Producers can't be selling at a higher price than people are buying, naturally.
US PPI wholesale inflation rate hits 9.8%, a 27-year record high
It's also misleading to look at GDP separate from population growth, which is almost 0.9%/year in the US. It's 0.6% in France, Japan's has been negative, and Germany and Italy flat. Looked at in those terms, Japan is on top for this period, while the US and France are a lot closer to each other, and to Germany/Italy.
Another way to grow GDP is to grow government. Bush's spending has been mind-boggling.. but for the GDP it's all good. In 2004 gov. spending equalled mfg. as % of GDP and I can only imagine that to have continued its trend:
Government now accounts for same percentage of GDP as manufacturing. | North America > United States from AllBusiness.com
So here are four major issues within just this single paragraph.
WSJ The latest ICP findings, published by the World Bank in its World Development Indicators 2008, also show that GDP per capita in the U.S. reached $41,813 (in purchasing power parity dollars) in 2005. This was a third higher than the United Kingdom's, 37% above Germany's and 38% more than Japan's.
More misdirection. Does not take into account huge increases in the share of the top 5%, top 1%, and top 0.1% of earners; while growth is nice, any benefits have been concentrated. GDP per capita would be the same number if 300mm Americans perceived zero, and Hank Paulson perceived $13trillion (PPP). But that does not a healthy economy make.
WSJ - Household consumption. The ICP study found that the average per-capita consumption of the U.S. population (citizens and illegal immigrants combined) was second only to Luxembourg's, out of 146 countries covered in 2005. The U.S. average was $32,045. This was well above the levels in the UK ($25,155), Canada ($23,526), France ($23,027) and Germany ($21,742). China stood at $1,751.
Consumption fueled by consumer debt. Let's see figures on whether the French and the Germans have negative savings rates, what their debt/income ratio is, and what their avg. outstanding cc balances are. I don't think they have HELOCs, or at least not as a matter of course. Oh.. gee! Household savings rate is 14.4% in the EU:
http://epp.eurostat.ec.europa.eu/pl...REREL_YEAR_2007_MONTH_08/2-01082007-EN-AP.PDF
meanwhile:
Average US household credit card debt is $8,565 IT FactsAmericans carry $2.56 trln in consumer debt, up 22% since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15% from 2000. ?verage US student emerges from college carrying $20,000 in educational debt. Household debt, including mortgages and credit cards, represents 19% of household assets, compared with 13% in 1980. Share of disposable income that consumers must set aside to service their debt has risen to 14.5% from 11% just 15 years ago. US savings rate, which exceeded 8% of disposable income in 1968, stood at 0.4% at the end of the first quarter of 2008, according to the Bureau of Economic Analysis.
Hmmmm.. let's review that $32,045 US consumption figure that makes Americans look so rich. Let's take away 14.4% (or more) to account for the extra amount Europeans save. Now reduce again by the higher amount paid in debt service (in Germany it is around 6.5% vs.14.5%).
Morgan Stanley - Global Economic Forum
14.4%+8% = a correction of 22.4%. Now you have a figure of just under $25k.. much closer to the lower-debt countries.
Another way to look at it is that if consumer debt is up 22% 2000-2008 then that certainly does its 70% part in contributing to the GDP being up roughly the same amount.
WSJ - Health services. The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain. But because of private funding (55% of the total) the burden on the U.S. taxpayer (9.1% of GDP) is kept to similar levels as France and Germany. The U.S. Census Bureau reports that 84.7% of the U.S. population was covered by health insurance in 2007, an increase of 3.6 million people over 2006. The uninsured can receive treatment in hospitals at the expense of private insurance holders.
This was a real howler. The writer seems to feel that the people indicated in "per capita" are some mystery population distinct from taxpayers. Taxpayers are the ones who are putting in the "private funding" AS WELL AS bearing the tax burden for state-provided or publicly-insured care. The uninsured only get emergency treatment, not continuing care for cancer or diabetes or whatever.
The 9.1% the writer is talking about seems to be gov. spending only from the way he phrases the sentence, but may just be some fantasy number he made up, since if 9.1% = 45%, then that would imply total hc spending is an even larger percentage of GDP (20%!!) than those listed officially here:
U.S. Health Care Spending In An International Context -- Reinhardt et al. 23 (3): 10 -- Health AffairsAfter expenditures are converted into purchasing-power parity international dollars (PPP$), Switzerland spent only 68 percent as much on health care per capita in 2001 as the United States.3 Neighboring Canada, with a health care delivery system and medical practice styles fairly similar to those in the United States, spent only 57 percent as much per capita as the United States. PPP-adjusted per capita spending in the median OECD country was only 44 percent of the U.S. level (PPP$2,161).
Finally, the median percentage of GDP absorbed by health care in the non-U.S. OECD countries in 2001 was only 8.3 percent, compared with 13.9 percent in the United States. Although that percentage remained more or less constant during the 1990s, during the previous two decades the average annual growth of health spending exceeded the growth of total GDP by 2.5–3 percent.4 U.S. government actuaries now project that during 2003–2013 U.S. health spending will revert to its traditional, long-term trend. They project the annual growth in U.S. health spending to exceed the annual growth in GDP once again by about two percentage points, and total national health spending to absorb as much as 18.4 percent of U.S. GDP by 2013.5
OECD states 2005 US hc spending as 15.2% of GDP (2006 15.3%)
2005 spending for France and Germany 11.2% / 10.7% of their GDP
2006 spending for France and Germany 11.1% / 10.6%.
In France and Germany, though, everyone is covered, a far better deal for the money.
But you wouldn't expect a WSJ writer to point that out, necessarily.
Excel download with many stats here:
http://www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls
too tired to take on the rest.. I have to hand it to whoever wrote this, though, for their sheer capacity to shoehorn so many lies and misrepresentations into such a small space.