"President Hugo Chavez wasn't pleased with data released this week that showed the Venezeulan economy tumbling into a recession. So the populist leader came up with a solution: Forget traditional measures of economic growth, and find a new, 'Socialist-friendly' gauge. ... Mr. Chavez's comments came shortly after data showed Venezeula's [GDP]--fell 4.5% in the third quarter from the year-earlier period. ... An economic commission headed by Nobel Prize winner Joseph Stiglitz supports such moves, saying every country should design its own basket of indicators that would include factors such as unemployment, security, and income inequality. ... The most famous example of this line of reasoning is the tiny Himalayan kingdon of Bhutan, which has tried to measure gross national happiness instead of GDP. ... Some analysts worry Mr. Chavez might follow in the footsteps of leaders in Argentina, where the government changed the way it measured inflation in a move that was widely seen as an attempt to camoulage rising prices and that has added to investor mistrust of Buenos Aires", Dan Molinski & David Luhnow, WSJ, 20 November 2009:
How much is 2 + 2? Whatever number great leader wants it to be. Chavez has a fine future ahead of him as a FASB member or Big 87654 partner. What did the US do in 1996 with the Boskin Commission? Obama, note Chavez's actions and do likewise. I wonder if Stiglitz thinks each SEC registrant should develop its own GAAP?
7 comments:
Wikipedia supports Chavez...
A system of measurement is a set of units which can be used to specify anything which can be measured and were historically important, regulated and defined because of trade and internal commerce.
Scientifically, when later analyzed, some quantities are designated as fundamental units meaning all other needed units can be derived from them, whereas in the early and most historic eras, the units were given by fiat (See Statutory law) by the ruling entities and were not necessarily well inter-related or self-consistent.
Argentina, Chavez, Citi or whoever feel the "investor's lash" when make up fiat measurements... see... we do need the bond market vigilantes...
Wow, that's like the old joke about a pair of Soviet dictators riding together in a train. The train stops suddenly, so the first Soviet leaders orders the conductor shot to get the train moving again. But the train still doesn't move.
So the second leader orders that all the shades be drawn and that the passengers pretend like they're still on their way to Moscow.
Joseph Stiglitz, Nobel Prize in economy, already wrote a report as a commissioner for the French Government to rethink the GDP methodology, which its weigh factors are preferential towards the private sector growth and and less keen to encourage the public sector growth. Chavez suggestion is not new, he proposed the very thing some years ago, when he asks to develop a new methodology to register properly the huge effort in public investment and its outputs in the human satisfaction, not monetized by transaction of commodities or services.
That is still a debate, and Chavez is right to encourage that debate. The reason is simple, we are led into misinterpretation very easily moving ranks up and down of economies that are just not as per the those economic indicators. As Greespan says, in front of US Congress this year, his model had "a little mistake" which didn't predict this crisis.
America Delight,
You may enjoy the Ronald Regan's style of making jokes all the time to humiliate the soviets, while serious matters are needed today, when we are in train set collision to the most dramatic environmental-human catastrophe ever, and you give us your hard explanation through jokes? You seems terrible obsess with the war against Islam, my friend. When millions of people fled their homes heading towards your town what do you proposed? Gun shot them all?
W Blackberry--there's enough room in the blogosphere for serious comments, disagreement, and humor.
P.S.: I'm not sure why you bring up my own off-site commentary when I didn't mention anything about Islam in this post. But fyi, it's not a "war against Islam"--it's about defending ourselves from violent jihad.
American Delight,
Shall I apologize? so do I. You know, I am really worry about the distorted picture that some people gets from the very needed debate about how to restructure the political and economic system to prevent or reduce to oncoming damages. That's all what I want to point out. Sorry if you get offended.
I understand where you're coming from, WB, and I'm not offended. No worries.
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