Wednesday, December 9, 2009
The Chavez Commission
"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?