One of the more interesting reads of recent, here is a fast cut and
paste and a link to the entire article. . .
http://www.kitco.com/ind/katz/may132008.html
Gross Domestic (or National) Product was invented in the 1930s by
Simon Kuznets, a Keynesian who worked for the New Deal. Keynes once
remarked,
=93Pyramid-building, earthquakes, even wars may serve to increase
wealth.=94
Based on this idea that earthquakes may create wealth these people
developed Gross Domestic Product. Today they tell us that the economy
is wonderful (because GDP keeps going up) while around the world
people are rioting for food.
The period of greatest economic decline in American history was
1942-1945. During this time no one could buy a new car, and no one
could buy a new home. Butter, eggs and meat were rationed. Gasoline
was limited to 3 gallons a week. It is not a surprise that the country
was poorer during this time. 10 million men had been taken out of the
labor force and set to blowing up Germans, and the Germans were
returning the complement. And yet real Gross Domestic Product showed
the greatest growth in any comparable period of American history.
Why did GDP go up so strongly at the very time that the economy of the
U.S. was collapsing? It was rather like a thermometer which rises
sharply in January and plunges in July. We ought to conclude that such
a thermometer was not an accurate measure of the temperature. A
similar situation occurs with a comparison of West Germany and Italy
in the late 20th century (1955-1987). Anybody with a grain of common
sense knows of the =93German economic miracle,=94 and yet poor, confused
Italy, the sick man of Europe, showed a faster increase in real GDP.
What good is a measuring tool which gives such absurd readings?
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