It's a good article, RW. Thx for posting. I do have to point out something, though. The article uses a more in depth study of the statistics typically used to measure economic health to show how those statistics are skewed to portray the US as healthier than it really is. The use of hedonics was specifically mentioned. The theme of overly optimistic headline stats in the US is one I have discussed many times on this thread and been ridiculed because of it. In addition, your article references Shadowstats, which is something I have pointed out as well. It's not a conspiracy, it's simply political maneuvering of metrics to show a rosier picture than things really are. So although I agree with many of the points the article makes, it begs the question, why are you ok with pointing out the fallacies of US headline metrics when they bolster a point you are trying to make about Japan, but you are not ok when I also point out the overly optimistic US headline stats?
One other thing. Although, the article is impressive in pointing out all the good things that have come as a result of Japan's approach over the last two decades, it doesn't touch on the sustainability of their model. How on earth is a 300% debt to GDP ratio sustainable? Well, one thing is for certain. We're going to find out what going Japanese does to this country, because I think the Fed, Treasure, and Congress are now caught in a Catch-22 of their own making, which means going Japanese is the only politically acceptable path forward. So we will find out for certain what the outcome will be. For all of our sakes, I hope I am wrong and that destroying the value of our currency and spending our way to prosperity really works. Because if it doesn't, and I'm pretty certain that it does NOT, then we're going to destroy this country in more way than one and that could lead to a destruction of our Democracy, not just our economy.
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On a only slightly related topic...
Something I've been giving a lot of thought to recently is whether GDP as a measure of the health of the economy is even relevant. Why does everyone focus so much on GDP growth as THE measure of health of the economy? I guess on the one hand that when you see a neighbor buying all sorts of new things, including a Porsche, you automatically want to believe he is wealthy and doing well economically. But is that the truth? I know several of my neighbors that have lost their houses during the last 3 years, because their wealth was an illusion. My house is paid for and my necessary cash outflows are minimal. So I can withstand all sorts of economic shocks to my wealth. That's true wealth. I measure my own wealth by the free cash flow generated by my investments, NOT by how much I am making when I'm working. So should we measure wealth by GDP, which is really just a measure of how much we spend as a nation? I'd say no. We should create a new headline measure of how much we save, or maybe use national income, or maybe use free cash flow generated by our national investments. Those measures would align our productive capacities towards generating true national wealth, not just the fake wealth of conspicuous consumption. Just my two cents. |
