[p2p-research] Tick, tock, tick, tock… BING

[J. Andrew Rogers]

On Thu, Dec 10, 2009 at 7:18 PM, Paul D. Fernhout
<pdfernhout at kurtz-fernhout.com> wrote:
> There are two issues. One is employment as a "lagging indicator" after GDP
> growth, in part for reasons of cycles and stuff like lags in retraining and
> people making new businesses in response to "creative destruction". But, as
> I said, it is lagging further and further behind, to the point where it is
> going to catch up with the next recession. :-) And part of that is from what
> I think is "limited demand".


Another problem is that GDP is a relatively weak measure of economic
activity on any kind of short-term basis.  It is trivially and
routinely manipulated by government action -- easy to see how from the
formula for computing it. However, over the long-term that tends to
catch up with a country, so you can't whitewash the GDP forever. What
may look like GDP growth is just a fiscal policy trying very hard to
create that effect.

Keynesian economic policies are significantly about economic
whitewashing to manipulate behavior. Unfortunately, that doesn't work
well with a sufficiently cynical population since it basically relies
on the abject credulity of people.  If they think the government
policy is full of crap, the purported effects won't materialize
regardless of the GDP bump and you'll be in a worse place than you
started.

-- 
J. Andrew Rogers
realityminer.blogspot.com