Friday, August 05, 2011

And The Entitlement State

by Mikiel de Bary - August 4th, 2011 - The American Thinker

It is high time to judge macroeconomics -- the pseudo-economics of "aggregates" -- as a disaster. We must challenge both the premises of the macroeconomists and their "policy" alternatives. Let us recognize them for what they are, namely, public relations consultants for the entitlement state.

From its beginnings, which we can date from 1936 (the publication year of Keynes's General Theory), macroeconomics emphasized (on rather vaguely argued grounds) the importance of the biggest numbers in business statistics -- the so-called aggregates. The macroeconomists, as it were, even named themselves after these politically potent "macro" numbers and laid claim to an expertise precisely in tracking and, well, producing them.

What they produced was the hidden inflation of measuring product not by how many things were produced, but by the aggregate value of the things produced. The hidden inflation was the spurious claim - if the value as measured in dollars had increased - that the product of the nation had gone up. What it actually measured was the hidden inflation cost to society of the government goons who insidiously monitored the process and proclaimed progress against all reason.

This article is an excellent description of the failures of macro economics, as its opening paragraph proclaims. A related example of manipulating data is the unemployment rate as published by government macro-economists. It hides the real unemployment rate by claiming those that have been bribed to live off the welfare state and given up looking for work are no longer unemployed. How can these insane ideas have gained so much credibility with supposedly intelligent people?


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