kent nickell
Well-known member
Stiglitz in Freefall makes the same point that 'Measuring GDP in the United States didn't really give a good picture of what was going on before the bubble burst.'
'In the United States, by 2008, the median household income was some 4 percent lower than it was in 2000, adjusted for inflation, even though GDP per capita (a measure of what was happening on average) had increased by 10 percent.'
GDP can represent 'churning' , money spent on an inefficient health care system (ie the CEO's of the publicly traded health insurance companies Wellpoint, Coventry andAetna had 2009 salaries of over 17 million each and the United CEO exercised stock options worth over 98 million and shareholders in these companies, as in many other publicly traded companies, are unable to place limits on executive compensation), home prices churning upwards but without taking into account the increased household indebtedness, resource depletion with worsening of the environment without taking into account the long term effect of depleting these resources.
http://www.ft.com/cms/s/0/cf87cfd4-6d15-11df-921a-00144feab49a.html
Why our elites are wrong on Asian business model
By Hugh Hendry
Published: June 1 2010
excerpts:
Persuaded by the immediate dangers of deflation, I feel much the same antagonism towards most investment matters today, especially the Asian business model and the investment community's bullishness regarding China.
From the phenomenon that was Japan in the 1970s-80s to the Asian Tiger movement in the 1990s to our present obsession with China's economic might and its future prospects, Asia has won the hearts and minds of the financial world's most demanding investors.
I would like to warn you that I think the Asian business development model is flawed.
I think our elites have it wrong. It is my contention that China produces GDP growth without per capita wealth creation. It is analogous to a cocktail party without the cocktails; what is the point?
'In the United States, by 2008, the median household income was some 4 percent lower than it was in 2000, adjusted for inflation, even though GDP per capita (a measure of what was happening on average) had increased by 10 percent.'
GDP can represent 'churning' , money spent on an inefficient health care system (ie the CEO's of the publicly traded health insurance companies Wellpoint, Coventry andAetna had 2009 salaries of over 17 million each and the United CEO exercised stock options worth over 98 million and shareholders in these companies, as in many other publicly traded companies, are unable to place limits on executive compensation), home prices churning upwards but without taking into account the increased household indebtedness, resource depletion with worsening of the environment without taking into account the long term effect of depleting these resources.
http://www.ft.com/cms/s/0/cf87cfd4-6d15-11df-921a-00144feab49a.html
Why our elites are wrong on Asian business model
By Hugh Hendry
Published: June 1 2010
excerpts:
Persuaded by the immediate dangers of deflation, I feel much the same antagonism towards most investment matters today, especially the Asian business model and the investment community's bullishness regarding China.
From the phenomenon that was Japan in the 1970s-80s to the Asian Tiger movement in the 1990s to our present obsession with China's economic might and its future prospects, Asia has won the hearts and minds of the financial world's most demanding investors.
I would like to warn you that I think the Asian business development model is flawed.
I think our elites have it wrong. It is my contention that China produces GDP growth without per capita wealth creation. It is analogous to a cocktail party without the cocktails; what is the point?