Re: US TFP Growth

[David Lloyd-Jones <dlj@xxxxxxxxxxxx>]

Paul Altesman wrote, after an interjection from Doug:
>
>     As they say: good question.
>   I think it is a small matter of nuance ("less than *totally*
> neoclassical", I should have added the emphasis).  As I recall hearing the
> story, the IMF and the World Bank (partners with the UN on the international
> System of National Accounts) pressed hard for putting formal neo-classical
> methodologies (well, rhetoric) into the guidelines for estimating capital
> assets and the explanatory docs.  The UN tried to remain somewhat agnostic,
> fudging the issue with pricing capital at "market" price (yea, I know) but
> not attaching a philisophical explanation.  'Its worth what its worth'.

It seems to me that both Paul and Doug are complaining about the
inaccuracy of a yardstick where in the real world neither a chain nor
even an odometer has yet been brought to bear.  Europe has a theodolite,
and they pass it from one person to the next, like the regimental
condom.  National accounts are not inaccurate because of any subtleties
in the mismeasurement of capital assets; they are off in La-la Land,
different lalalands for different countries, and we are only just
beginning to get cleft sticks back from explorers mapping the
circumferences of those territories.  This mapping is done not by
sending emissaries to the capitals but by sniffing the effluent from the
rivers.

Look at it: these units, "countries," pretend to have budgets.  Is there
an attempt to separate capital investment from income transfers? Rarely
-- and where there is it's largely phoney.  I predict half a century of
muckin' abaht as the advanced countries try to make this distinction in
their national accounts, and fail, believing, e.g., that money spent on
education could be a measure of the growth of capital stock in education
and other such bizarre fanatasies.  You have now heard the history of
world economics, 2000 to 2050....

Debt?  That giggle you hear wherever you are is me in Toronto giggling
at the notion that anybody knows what national debts are.  Think about
the financing of WWI: when Churchill was Prime Minister in Round Two he
was writing letters to the naval contractors telling them where to dig
up the naval guns he had buried, an off-the-books transaction, when he
had been First Lord of the Admiralty during Round One. I'm still waiting
for an accounting to appear on the looting of India's silver to pay for
that first round: it's buried in England's national accounts.
England's???  Well, of _course_ England's: India was just a line entry
in the Colonial Office, right?

Mention of off-the-books transactions should give everybody a
good-morning belly laugh.  The reason computers have unicode is so that
Washington can invent more alphabet agencies, maybe?

I leave with you the slogan of one of the organizers of the
anti-student-loan movement in Canada: "We're bigger than Brazil.  What
are they gonna do?"  What the banks are going to do is shrug: student
loan guarantees, are like legal aid but for banks, a welfare handout to
the well off, the banks' shareholders.  The 2010 shortfall in the Social
Security Administration's Ponzi accounting is going to be dwarfed by
Generation X's savings and loan scam, the great "Hey, buddy, I got a
mortgage to pay off.  Where's _my_ GI Bill?" revolt.

National accounts?  Always remember what Gandhi said about Western
civilization:  "That would be a good idea."

                                          Cheers to all.

                                               -dlj.