This page contains a single entry from the blog posted on August 11, 2009 4:35 AM. The previous post in this blog was "Fill it up, please". The next post in this blog is New money pit to open. Many more can be found on the main index page or by looking through the archives.

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Tuesday, August 11, 2009

Cash flow is not the same as well-being

Here's an elegant argument that our economists are pushing the wrong numbers.

Comments (6)

Fantastic! Another way to measure "jobs saved or created"

Interesting points, even when the gratuitous adverbs are removed.

Measuring cash flow provides us one very valuable tool: It offers a reality check on the other numbers that a country, corporation, or individual may be pushing. And it's harder to fudge this number. Looking at Enron's cash flow in the 2000-2001 time frame, one may have concluded that their increasing profits reported could not possibly be supported by their relatively flat cash flow (actually, this was reported, but it was lost in the din of favorable reports).

But I agree, there ought to be a more appropriate "official" measure of economic output.

Onr tool in the toolbox is not the toolbox.

Shame on all you horrible people in our country. Buying things they really don't want or need or which make themselves and their families better off and provide a living to others. Go back you all to horse manure (and the stench and spread of disease), oil lamps (there must be another O'Leary cow out there somewhere to destroy the slums)and women doing women's work. Just what we need. Hey, how about passing a law requiring all that?

Let's forget about a market economy. Isn't 9 or 10 percent unemployment enough? How about 15 or 20 percent? Why be shy -- let's shoot for a 25 to 30 percent reprise of the Great Depression.

Any well-informed economist knows there are dozens of measures of economic output. Virtually all these relate to things that people value to the point that they are willing to pay for the goods/services. Anything this author claims to value is subject to this put up or shut up form of measurement. If you value items then pay!!!

Anything that's not measured in the National Income Accounts can be measured the good old fashioned way -- by counting and reporting the results.

If this guy wants to make up values for non-market transactions I would love to see it -- and critique him to oblivion. In his view of the world the explosion of Krakatoa would have been the most economically valuable event of the last millenium. Go to it!!!

Wouldn't it be intesting if the City of Portland, instead of only calculating the increased "gross domestic" tax revenue of infill development, was forced also to calculate the real costs of filling every nook and cranny with skinny houses and condo bunkers? These costs could include the environmental (loss of tree cover, more runoff from roofs and pavement, more local pollution from traffic, increased summer temperatues), the financial (more wear & tear on an aging sewer system, more need for road repairs and maintenance), and the emotional (a loss of privacy and light in adjacent houses, increased noise pollution from traffic, and the aggravation (and economic costs) of more and more time lost to sitting in traffic. As it is, it seems these costs are only calculated for areas outside the urban growth boundary, not within it. Sure, some neighborhoods in town may be getting some benefit from development (you gotta love that streetcar, kids), but not mine. We get the infill and its costs and see none of the benefits. Where's the economic justice in that?

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