Reply #65: Orwellian Economics [View All]

[54anickel]

http://www.dailyreckoning.com/Featured/Bosworth071306.html

Currently, the Party uses the phrase "Gross Domestic Product" as if people were rolling up their sleeves to build machines and harvest crops. But increases in "GDP" these days come from consumption , not production. And the bad news gets worse: the consumption is not coming from savings, but rather from credit-card debt. In a giant circle of nonsense, this ends up increasing our national "GDP."

The housing boom accounts for much of the economic "growth," but few people realize that "home owners" have little or no equity in their homes, and that each move in the creative-financing shell game (between banks, mortgage companies and speculators) only adds to the mighty "GDP."

About 5 % - 10% of GDP, as it turns out, is Wal-Mart - a tsunami of cheap Asian stuff once made in the United States. Apparently, there is money to be made hollowing out America's middle class. The failed-but-somehow-eternal war in Iraq also gets factored into the GDP. Halliburton, arms merchants, Madison-Avenue propaganda companies – it all gets to be included. So does the Vatican-sized embassy in Baghdad (outsourced) and the permanent military bases there (outsourced).

Let's continue to scratch the surface of the rosy statistics being promoted by the Party's portable speakerphone, George W. The "low unemployment" figures mask a reality of millions of part-time, poorly-paid and uninsured workers. The poverty rate over the past six years has jumped to nearly 40 million people, and the number of Americans with no health insurance has risen to some 50 million people. Now, there are even indications that life expectancy is beginning to decline in the US, especially for adult males. Not a good sign.

Only the most partisan hack can deny that the rich are getting richer and the poor are getting poorer under the Bush regime. Why is this happening? Joseph Schumpeter, the Austrian economist, recognized that free enterprise periodically gives way to "monopoly capitalism" - shorthand for clusters of oligopolistic firms earning supernormal profits, and this is especially true for industries with enormous economies of scale, like petroleum or pharmaceuticals. They begin to squeeze consumers and write laws to make that happen.

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