A Fraudulent Economy: Mixing Wealth and Illth and Mismeasuring the Mess

There’s a good article on some fundamental problems in the U.S. economy at a good peak-oil website: Our Phony Economy. The interested reader should follow the links to the testimony of Jonathon Rowe who discusses the odd fact that our economy looks stronger as we get sicker and need more medical services. The article also references a very good website for those who’d like to be in contact with economic reality: Shadow Government Statistics. That website has a set of good primers on the political corruption of our government’s unemployment and national income statistics, a corruption which has been ongoing since Lyndon Johnson’s efforts to hide the real costs of the Vietnam War and his Great Society programs. John Williams, the economist who runs that site, calculates unemployment statistics and other economic statistics the way they were calculated before the methodologies were corrupted by the various Presidential administrations since Johnson. Appropriately enough, you have to subscribe to his newsletter to get recent statistics, but the older numbers which are available to the general public are frightening enough.

One of the ways in which we defraud ourselves in our economy is through our accounting for our medical system. By pretending that a dollar given to a hospital is the same as a dollar given to buy necessary food or desirable education, we Americans have been boosting our economy by living unwisely. Age-onset diabetes becomes an economically beneficial state because it causes us to buy more treatments from our doctors and hospitals. And there are also various therapists and maybe athletic clubs which benefit if we have good medical insurance. Money flows and obviously we’re richer. Our standard of living has risen because we have more hospitals treating more diabetics. Over time, you have heart surgeries and various expensive drugs to contribute further to our wealth. Or is it illth? If half of us Americans or so were to obligingly get leukemia, the other half could go to work for the medical system, if only as van-drivers. Expensive testing and treatments would give us a hell of an economic year. Maybe even two years or so.

The problem is even more general because we pretend that a dollar spent on pornography is as good as a dollar spent on, say, a good history book about the founding of the United States. It’s remarkable that even moral conservatives glory in this all-transactions-are-equal economy at the same time they rant and rave about the signs of decay. The sad fact is that what’s bad for us, for our bodies or minds or moral characters, can more rapidly generate economic transactions than a life involving simple and healthy pleasures and hobbies and careers. More likely for most: we’ll spend too much of our resources on what’s good for us in small amounts. I’m not anti-sweets but I’m realistic enough to know that a child with a buck who’s already had a big dish of ice-cream will spend that buck on candy rather than broccoli.

So we eat too much sweets, drink too much beer as we watch professional athletes exert themselves. Then, after putting all that ice-cream and beer in our national statistics at full value, we become even richer by going for all sorts of blood-tests and doctor’s visits and we buy lots of insulin and syringes. How rich we are.

We don’t even have to worry if some lose their jobs because the patients are dying off at young ages. Some clever political operator would advise the President on how to eliminate those poor slobs from the unemployment statistics as President Clinton managed to eliminate the inner-city unemployed with the 1996 elections approaching. That was progress of a sort, at least to that exploitive class of politicians. President Nixon failed to even get the Bureau of Labor Statistics (BLS) to publish the more optimistic of the seasonally adjusted or the non-adjusted unemployment statistics. The BLS insisted on at least announcing which set of statistics they were publishing.

And did you hear the one about keeping the calculation of inflation estimates down over the past 15 years or so? When we’re less well off because of price increases, then obviously, a pound of hamburger gives us as much satisfaction as a pound of steak and so a substitution is made in the basket of goods used to calculate the consumer price index. Substitutions of that sort are one way that the published CPI over the past ten years or so has been about half of what it would have been by more consistent and more honest calculations. This particular fraud even has a name: the ‘hedonic adjustment’.

Explore posts in the same categories: economics, modern medical system, Moral issues, political fraud, politics

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