“U.S. Economy Grew 0.5% in First Quarter, Slowest Pace in 2 Years” (nytimes) has a “glass is half full” ring to it. Our economy is growing, but less rapidly than in the past. The journalist and editors, as is typical for the American news industry, fail to to put this into context with the population growth rate of about 0.7 percent (Google it!). In other words, Americans on average were getting poorer in 2016, but it is impossible to learn that from reading the journalists’ interpretation of the data.
Readers: How can we explain this?
Related:
Don’t worry. As soon as there is a Republican President, they will report how badly the economy is doing. Also homelessness will be a “growing problem”. Homelessness is only a problem during Republican administrations. There can be just as many homeless during a Democrat administration, but since Democrats have their heart in the right place, they are no problem.
In the liberal mind, intentions are much more important than action. So say I take Mary Jo on a date and I make sexist remarks about her – I have committed a grievous hate crime. But suppose Senator K takes Mary Jo on a date and accidentally drives off a bridge and drowns her – this is no problem because his intentions toward Mary Jo were good.
Reporters who don’t report what the government wants them to report don’t get invited back for future press conferences and don’t get sent the press releases that the reporters rewrite very slightly to turn in as their stories.
The situation is probably even worse than it appears from this, as well. Keep in mind the government spending is included in GDP, and the percentage of GDP it makes up has been increasing for years–meaning that actual productivity is going down even faster.
I’m not an economist so maybe I’m way off in my thinking, but when you look at GDP per capita, I assume that is supposed to somehow be an indicator of quality of life. But how do massive expenditures in the US has such as healthcare, defense, and education affect the GDP vs. quality of life calculation. Are we really lower down the list because, for example, we spend about 5K per person more on healthcare than the UK and more on defense and education?
Do you realise you did explained your point in full, right? unless the question is ‘how do we explain why journalist suck at explaining’, where the answer is ‘a mixture of stupidity, ignorance and bias’.
GDP and GDP per capita are not very useful measurements, but they get even less useful when you try to blend in population growth.
Obviously newborn babies contribute only to the denominator, not the numerator, of such a measurement…you could argue for GDP per working-age citizen, I suppose. But then you’re still left with the problem that GDP is fundamentally flawed.
Just like the local news reports market close deltas in dollars. It’s all noise.
I was born in 1970. During my adult years, I have only seen GDP growth compared to population growth in a few blogs and alternative publications written by cranks, usually supporters of the non-presidential party at the time. I never have seen this done in a mainstream media publication.
Also during my adult lifetime, GDP growth has almost always, except during some obvious (to me) periods of bubble economics, lagged population growth. And I suspect population growth is understated due to the government underestimating the number of illegal immigrants.
If you understand this, you are on your way to understanding what has happened with real median income.
Even if you look at real GDP per capita (and ignore the fact that a lot of GDP gets wasted on worthless government activity) it still says nothing about the distribution – 99% of the GDP could go to Carlos Slim and the other 99% of the population could share the remaining 1%. Median inflation adjusted GDP per capita (a number no one ever gives) would come closer to actually telling you something meaningful but again that doesn’t tell you much if most of that GDP gets wasted on government boondoggles.
Frederico – I don’t think New York Times journalists are stupid or ignorant. Biased, yes. I would probably add stupid and ignorant to my local news organization.
When talking a about dubious govt statistics, don’t forget about inflation and debt. GDP = total economic activity – inflation, so fudging inflation downwards makes GDP look even better (food, energy, and housing are ignored in the govt’s inflation calcs because they are “too volatile”). And how much economic activity is really just a one-time boost from from debt? (based on the assumption through “smart investments” today we’ll be so much richer in the future that we’ll easily be able to pay off those debts in the future).