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10/29/2018 10:25:00 AM
OPINION: Stability amid the turmoil

Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University.  His column appears in Indiana newspapers, and his views can be followed on a podcast:  

          Most folks think the Clarendon girls are twins. They are dressed alike by parents who insist neither Carla nor Clara should have an experience denied to the other.

          “What in this world is important?” Carla asked. It was a strange, philosophical question for a 12 year old. But I was ready.

          “GDP,” I answered without hesitation.

          “You’ve surrendered to Mammon,” Clara accused me.

          “No!” Carla asserted. “He’s just reciting the received dogma of his profession.”

          “Untrue,” I responded. “Most economists know GDP (Gross Domestic Product) is only an approximation of the performance by the market economy satisfying the demands of the public.”

          “He’s a corporate colluder,” Clara snickered.

          “No way,” Carla giggled. “More likely he’s a socialist sympathizer.”

          “Ladies,” I pleaded, “GDP leaves out much that is of great value to society. We still have no agreed measure of that value. The work each of us does at home or voluntarily - - coordinating, cleaning, cooking, and caring - - is not included in GDP. But that does not invalidate what we do have.”

          “He wants to dictate how our economy should work,” Clara said behind her hand.

          “He’s determined to undermine capitalism,” Carla muttered to her sister.

          “GDP figures are produced by Bureau of Economic Analysis quarterly, revised, corrected, and augmented frequently,” I said. “They tell us how we’re doing. They show the very different experiences of our 50 states.” 

          “So how are we doing?” Clara challenged me.

          “Highly variable,” I said calmly. “During the first half of the past ten years (2007 to 2012), North Dakota, Alaska, and South Dakota were the top three leaders in GDP growth. But during the on-going expansion (2012 to 2017) the leaders were Washington, California, and Utah.

          “Yet that doesn’t begin to tell the story. The Great Recession (’07 to ’10 depending on how you look at it) meant a state like Indiana climbed from 38th in growth rate to 19th by the end of the period.

          “Yes,” I continued, “Florida had the biggest bounce back, going from 49th in growth (’07-’12) to 7th (’12 to ’17), contrasting with Alaska which went from 2nd to 50th in growth.”

          “What use are all those numbers?” Carla asked none too politely.

          “Well,” I hesitated, “they are very interesting.”

          “Verry inte-rrres-ting,” Clara mocked my imitation of Arte Johnson from Laugh-in. “What do they tell us?”

          “They tell us,” I declared, “that with all the turmoil of the past ten years, the dramatic swings and surges that caused seasoned observers to declare they’d never seen anything like it before - - - after all that, 25 of our 50 states occupied exactly the same rank in GDP in 2017 as they did in 2007. The greatest shifts were four places up by Colorado and North Dakota and four places down by Arizona.

          “Our nation has remarkable stability,” I called after them as they left, the brats.

Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR

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