"I Am What I Am"*

I run to catch the bus. My groin tightens up. I am sitting on the bus holding back tears. I get off early to pick up my dry cleaning. Standing could be no worse than sitting. I hobble across the street. I reaffirm dry cleaning is a rip-off. But freshly pressed and cleaned pants sure look nice. I am walking to my office. The groin pain subsides, but my back starts to stiffen. I watched The Departed last night at the worst theatre in the country. It sold out, so I had to sit in the second row and arch my back to prevent breaking my neck. At least The Departed was good. It only took me an hour to get comfortable once I got to my office. (I want to make a joke about how I rubbed my groin, but I do not know how.)

So after I got comfortable, I started to think about how stupid the majority of common economic data is. Aggregation contradicts methodological individualism. The unemployment rate says nothing. I am either employed or not employed. Aggregation loses the individual nature of the data. The same can be said about GDP. What does GDP really say? It only matters what I produce. Notice I am ignoring all of the survey problems involved in these aggregations.

These aggregates lead to the fallacy that countries compete. Krugman in Pop Internationalism debunks this fallacy, but he still uses similar numbers in his columns. He does not attack the misunderstanding of statistics.

The problem with statistics and positivism in general is we live in a normative world. Saying the unemployment rate is 4 percent is not good enough. Some politician, some media person, someone must say that number is too high or too low. But the number means nothing. It has no normative value whatsoever. Some governmental agency conducted some survey and 4 percent was the result. But since it is produced it has to mean something. Government agencies cannot exist if they only produce meaningless numbers.

Combining a number of economic statistics gives one a better picture, but the combination does not offer any suggestions. An increasing unemployment rate and decreasing GDP does not give any clues into why people are unemployed and production is down. It does not tell anyone how to produce and create jobs.

I keep saying the same thing over and over again. But economists do not get it. Economics is about creation. It is about teaching. It is not about confusing association and causation. It is not about producing meaningless numbers.

*From Fleetwood Mac's "Family Man"