If The Economy Is Great, Why Aren’t We?

If The Economy Is Great, Why Aren’t We?

August 17, 2019 100 By Stanley Isaacs


The economy is doing great. At least that’s what my parents tell me over the phone while I’m driving from my day job to my night job. I’m Francesca Fiorentini, and in this episode of Newsbroke, we’re looking at the difference between the economy doing well and how people are doing in it —a difference as stark as the Instagram me versus the real me. You don’t even want to know. We’re digging into the useless measurements that define our trickle down economy and then looking at another way to gauge a healthy society. Can you guess which country is doing the best? Sure, he could be a Manchurian Candidate who inspires white supremacists, but Trump has got the economy down. The Trump economy is the envy of the world. The Trump economy keeps winning. It’s the most successful economy in modern history. The miracle of the Trump economy. Now in the Trump economy. Everybody wins. A miracle? Everybody wins? When the economy sounds like a Ponzi scheme you can bet it probably is. All I need is $15,000 from you upfront and in ten years …you’ll be delivering four GrubHub. Statistically the economy is doing well, since Trump has taken office. The country’s GDP has grown every quarter at an average of 2.6 percent. Unemployment is at a near 50-year low and the stock market gained by 31percent. And yet sometimes it feels like the real reason we hear so much about the economy is because it’s the only part of the Trump administration that isn’t an unmitigated trainwreck. It’s like if the waiters at Applebee’s bragged about the one dish they brought you that doesn’t have pubes in it. Those tots are solid. [laughter] The problem lies in how we talk about the economy, like earlier I told you the economy was doing well by citing GDP, unemployment and the stock market. And maybe your eyes kind of just glaze over a bit and you generally accepted what I was saying was probably pretty good, like anything Pete Buttigieg says. But few of us understand what those things actually mean. Because when you start to look into the measurements of a so-called good economy you learn how incredibly disconnected they are from our everyday lives and well-being. Let’s start with the wonkiest one that gets thrown around a lot: Gross Domestic Product, or GDP. GDP is a stat that is so dry and boring that high school economic students are finding any way possible to spice it up. [background music] GDP GDP GDP GDP GDP GDP GDP [The Beatles’s “Yesterday” on piano] Five components make up GDP. [Paul McCartney’s “Blackbird” on guitar] Today we’re gonna learn about GDP Gross Domestic Product you will see Okay, we all did bad parody songs in high school but as a Beatles fan those last ones hurt. That’s like if instead of dropping acid and writing Sgt. Pepper’s, they developed an app. GDP is what most pundits refer to when they say blanket things like “The economy is growing.” It calculates the final value of goods and services that a country produces. But there are a bunch of problems with that calculation. First, it factors in negative value, like buying things for bad reasons. Let’s say you were in a 500-year flood and had to swim to the Home Depot to buy bamboo and zip ties for a makeshift raft. The GDP could actually go up. the GDP also doesn’t show the distribution of proceeds earned from goods and services, whether there’s any equity between people in a country. Using higher GDP to say all people are doing better is like if LeBron James entered your home and increase the gross domestic height, so I congratulated you for getting taller. By the way, LeBron, you’re invited to my home whenever you like. That makes sense right now because, while GDP and the US might be up, so is inequality. I know you’re used to hearing it come out of this guy’s mouth, but it bears repeating: Right now the top 10 percent of Americans has about 9 times as much income as the bottom 90 percent. That’s insane. So yes while GDP might show there’s more wealth being made… Almost all of the wealth and much of the income is going to the top 1 percent. I had to let the guy do his thing. GDP as a statistic is so detached from reality that even economists at the World Economic Forum in Davos —which is basically spring break for the 1 percent— called it a poor way of assessing the health of our economies that needs to be replaced That’s the equivalent of a pig in sh[bleep]t going, “Hey! …This is sh[bleep]t, huh.” Then there’s unemployment which, as of August, is at 3.7 percent, I mean unemployment is at record lows. I don’t think that that tells the whole story. When you can’t provide for your kids working a full-time job—working two full-time jobs. When you can’t have health care that is not a—that is not dignified. Ooh. Telling the blue-eyed Silver Fox of television news that something isn’t dignified is the way to get to Anderson Cooper. That and telling him that he’s a knockoff Trivago guy. But AOC is right. Unemployment, which fun fact is actually going up in states that voted for Trump, is a figure that doesn’t factor in a bunch of things. Like the number of people who are underemployed, which an IMF study shows is going up around the world. There are about 4.4 million underemployed Americans left out of the unemployment numbers, which is more underemployed people than before the Great Recession. These are people working part-time jobs because your manager at Pier 1 Imports would rather hire someone else and give either of you full-time work and benefits. Meanwhile, he keeps telling you “Well, we’ll just see how you do with the pillow pyramid.” Unemployment numbers are also problematic because they only count the people who are actively seeking work. One study found that despite low unemployment, there’s a quote: “perverse underlying trend” of people dropping out of the workforce altogether by simply giving up. Unemployment is like counting single people by those who are actively dating. What about those who’ve just given up and want to stay home and binge “Big Little Lies,” not live it? And of course, none of this has to do with whether Americans are making enough to make ends meet. In 2017, 40 percent of all Americans had trouble affording basic necessities like food, health care or housing. That’s partly why so many people have more than one job, but that’s not factored into any conversation about the economy either. How many times have you been in a lift and heard… I only drive from 4:00 a.m to 10:00 and then I head to the call center and a DJ at night. Yeah. Yeah. Sleep? Nah, I’ll sleep when I’m dead, which hopefully won’t happen while you’re still in the car, hahaha Gum? And finally, there’s the stock market, which has also been doing fairly well under Trump, and yet only the richest 10 percent of Americans own about 90 percent of all stock. And so few of us understand how it even works. Let’s hear one hedge fund manager explain it using a dog-walking analogy. You got a guy. He’s got a leash. There’s a dog on the other end of it. They’re walking in the same direction. If you observe the way the man crosses the park, his stride—It’s fairly straightforward. The man walking the dog is the economy. Then when you think about what the dog is doing… The dog is running around like a lunatic. It darts to the left. It darts to the right. It strains on the leash. That’s the stock market. Train your dog, brah. That analogy makes some sense if you think about how every time the stock market takes a sh[bleep]t, we’re all forced to clean it up. While it humps our leg. Let me offer a more accurate analogy: The stock market is essentially a confusing casino game played by just a few people speculating on everyone else’s money. Which means most Americans are that kid helplessly watching our father gamble away our college fund at Caesar’s Palace. Sure I’ll blow on your dice, pops. [blows] Come on. Daddy needs a new… …daddy. Okay, so if it’s not GDP or unemployment figures or the stock market, how do we know how we’re doing economically? Well, we could look at prices: how rent is skyrocketed, health care expenses are gouging our incomes, college tuition has doubled since the 1980s, or just look at wages. They haven’t gone up in 40 years, and when they have they’ve benefited the highest earners, so much so that now the average CEO makes 361 times more than their average employee. To be fair, that’s the average CEO. Don’t forget about the up and coming CEOs who only make a hundred times more than their average employee. The struggle is real. How about using new metrics altogether? Take New Zealand. Their Prime Minister just introduced a so-called “well-being budget,” which uses 61 different indicators, like loneliness, to track how their country is doing in order to boost mental health, reduce poverty and reduce carbon emissions. Also, everyone gets a sheep. I made that up, but probably. Or what about the Happy Planet Index, developed by one statistician, that calculates a country’s well-being using a variety of global data. Where does the US rank? Number one… …hundred and eighth. What country has held the number one spot? Costa Rica. Their government is one of the first to commit to be carbon neutral by 2021. They abolished the army in 1949. And they invested in social programs: health and education. They have one of the highest literacy rates in Latin America and in the world. And they have that Latin vibe, don’t they? Okay, a little fetishization there but not wrong. Maybe that’s what Trump’s anti-immigrant stances are really about. They’re bringing drugs. They’re rapists and they’ve got that Latin vibe that says “I’m just going to throw together some arepas on a Friday night and invite my neighbors over whose names I all know, and at some point someone will break out a guitar, and everyone will know how to dance the Macarena. Not in my America! But damn, Costa Rica? So you’re saying all we have to do to do well is dismantle the military, fund education, health care and green energy—Psh! We got that! It’s time to get rid of these measurements that only work for rich people and stop clinging on to trickle-down economics, which clearly don’t work. We need new parameters to gauge the well-being of our country. If for no other reason than to save the Beatles from being butchered. [singing] Eight days a week is not enough to pay my rent. Help! I need some money! Help! Not my parents money! Whisper words of surplus GDP [laughter] Hey, thanks so much for watching Newsbroke. We got a little silly. Hopefully you learned something. [singing] Aahhhh look at all the jobless people. Follow us on Facebook, on Instagram and on YouTube. Let me know in the comments below what you think a good measurement for a healthy economy should be. And next week we are talking about climate change and capitalism. We will see you next week.