Sometimes a single paragraph in a single newspaper story tells you (if somewhat obliquely) the prime reason economic policies around the world are so wacky these days. That’s the case with a story that appeared in the New York Times on December 24th. It was headed “Bavaria Booms, but Germans Feel Economic Malaise.”
Here’s the oh, so poignant paragraph in that story:.
“This disconnect — bullish economic indicators combined with simmering discontent even among the employed — is at the core of the conflict between Germany and some of its euro zone allies…German leaders have been confronted with the opposing forces of a strong economy and a work force that has seen its real wages, adjusted for inflation, decline over the past decade.”
There it is. The economy booms but most people are living less well. And the reason is because of the numbers that leaders not only in Germany but in many other parts of the world (including our own) choose to favor when shaping economic policies.
GDP is the prime example. Leaders do everything possible to increase the gross domestic product without any regard for how this added wealth is distributed — even if the distribution doesn’t benefit most citizens. Leaders focus on leading indicator numbers even if positive signs in these indicators are distorted by the government’s own monetary policies and the stock market’s ditzy behavior. Leaders are also much influenced by analyst expectations, the view of professional numbers crunchers who are mostly employed by Wall Street firms and big commercial banks.
Of course economists also produce a whole scad of numbers that could lead to very different policies. Numbers such as how new national wealth is allocated; the growing compensation disparity between workers and CEOs; the number of people queuing up for unemployment insurance, who are losing their homes, who are receiving food stamps, who are getting their suppers in cans from a food bank. You elevate numbers such as these to the front ranks and you would get very, very different economic policies flowing from places like Washington.
There are obvious and inevitable winners and losers in any economic numbers game. We’ve been seeing who’s been winning and losing in this country as this game has played out in recent decades. And if you like the winner-loser mix that’s come about since then, you’ll be even happier in months to come. Because the same number favorites are going to be even more in evidence in a new Congress, and from an Administration that is racing headlong toward what it laughingly believes is the political center.
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