Joseph Stiglitz: GDP growth is a poor measure of economic performance of a country
October 22nd, 2009 | 
Author: TI CINEMA
TOPIC: ECONOMIC REFORMS
Source:
Nobel laureate and former World Bank chief, Joseph Stiglitz discusses why GDP is not a good measure of economic performance of a country. He offers various explanations such as GDP does not tell you what happens to the typical citizen. He offers what some other factors are required to be looked into. Joseph Stiglitz is a reknowned economist who has written many scholarly articles and books.
Posted in Snippets
ALAS! A true scholar with wisdom-not just acsdemic excellence-
and compassion!
The world needs to listen and lesrn…forget greedy Wallstreet gurus..they only teach you GREED that will lead you to dig your own graves.
Be wise.
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i think with globalisation,there evolves two kinds of ECONOMICS.
The first kind is like what the highy respected and renown Mr Stiglitz should be rightly classified into,namely,THE WISE AND COMPASSIONATE BRANCH.On the other extrme,we have the GREEDY AND FOOLISH BRANCH in whcih category not a few of the WALLSTREET “GOONDOOS”-oops! i mean gurus,sorry- caould be “dumped” into!!! ..you know what i mean.
So scolars and leaders of the world,make your choice!
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Actually, if anyone here has taken economics in Junior College, economists the world over have known for a long time about the limits of GDP figures, but all of them accept it as a reliable indicator of ECONOMIC performance, despite the limitations. What it is a poor indicator of is the quality of life, as Singapore could very well attest to.
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GDP is the worst economic performance indicator for Singapore.
It is probably the MOST MISLEADING INDICATOR BECAUSE SINGAPORE HAS NO RESOURCES OF ITS OWN. Why? As Stiglitz says
GDP = Gross Domestic Product = income earned inside the country and
GNP = Gross National Product = income earned by those (nationals) inside the country.
Without natural resources, the earned income would be principally wages and with so much foreign participation in our labour force and increasing as we increase the influx of foreigners, the FOREIGN COMPONENT OF THE GDP COMPONENT WILL INCREASE but the GNP could be STAGNATING or even reducing as more and more Singaporean workers got displaced by cheaper foreign labour.
The distortion is worst when Government spends on support infrastructure like dormitories, hospitals, schools – they add to GDP figures and because it is built using mostly AND EVEN MORE FOREIGN labour, the enlarged GDP figures will be again bloated by its foreign component. So the end result is
foreign migration influx = gains in GDP = gain in migration influx
It is a vicious and self-perpetuating disease of inflating GDP figure so that the incummbent politicians can exploit public niavety that GDP growth of % percent because of its bullshit “wonder” governance i.e. we create so many jobs.
Of course the Government keep the truth under wrap by NOT saying exactly how many foreign workers were brought in during the last few years and most of the GDP economic pie and jobs growth benefited foreigners. SINGAPOREANS ARE QUIETLY DISPLACED AND BEST FORGOTTEN except when it time to vote again.
The Government’s main role is now creating jobs for foreigners and creating economic pie for foreigners – simply by adding more and more migrants while Singaporeans sink deeper and deeper into poverty.
If they had published the GNP figures, Singaporeans might explode at this hoax and deception to con our votes. The formulae now seems to be
more secret foreign migration = more votes for Government and logically = secure jobs for themselves at ever increasing phenomenal pay.
Singaporeans are being used, and conned.
Wake up Singaporeans from your slumber. Politicians are not there for the country, THEY ARE THERE FOR THEMSELVES.
Time To Change.
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I remember turncoat Bala said that GDP is everything.
Now we have a nobel prize winning economist telling him that it is not.
Why are we paying for a doctor a huge fee for telling us crap?
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Well,GDP and GNP econmic significance has been adulteratd by GREED-all prefixed by the letter G.
So you see,some guys sees GDP as “Gree”DP! That’s why it’s now not a “G”ood measure of real economic growth.
Adam Smith and the early economists vIewed ECONOMICS as a social science not a selfish science but through time and more so ever since the high sounding globalisation started,some guys
had miscontrued it…”MONEY TALKS!”
I sincerely hope that present day economists like Stiglitz and Krugman or even Soros come togather and discourse how optimum
allocation of economic resourecs could be balanced with optimum
profit as against maximum(at all cost) profits.
Wisdom from the foolishbess of irrational greed of Wallstreet
should be treasured for the long-term benefits of labour(workers) and “capital”(shareholders’ value) by focusing in building long-term than “gunning” for short-term and short lived profits.
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1. it’s spelled “renowned” and not “reknowned”.
2. he said gdp is limited, not useless. please make the effort to view his arguments from a measured perspective.
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Over the last few years (except this year), Singaporeans heard lots and lots of GDP growth and wonder job creations, BUT LIFE JUST GOT HARDER AND HARDER FOR SO MANY compounded by inflation of housing and food costs and falling wages even for the employed.
Those earning millions would have to be clueless of suffering of those struggling. Political rhetorics is a lot easier than confronting the seas of hardships around citizenry.
Realities and political rhetorics is just widening. Who can blame trust for eroding?
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@Anonymous
You make a valid and fair observation,life’s indeed harder or even G L O O M I E R -and that is not an exaggeration-as you
would also probably read in the ST that folks jumped into the
MRT tracks in recent times…who cares???..they aren’t TALENTS!
Well,besides getting booted out of jobs-which paid peanuts,so to speak-now,with additionl revenue-generating increases like GST,they just lost their heads and decided to “go and mati”-meaning go and die-AT THE MRT!…think that’s easy..try it?!!!
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@ fair and square on Fri, 23rd Oct 2009 10:24 am
I was in that post talking about those STILL EMPLOYED.
WHAT ABOUT THE UNEMPLOYED OTHER THAN THOSE WHO CHOOSE TO LEAVE THIS WORLD IN A DRAMATIC PAIN ON MRT TRACKS?
These days, I am now completely NUMB reading GDP claims and job creation statistics in Shitty Times. They make depressing read.
Such rhetorics irritates public good tastes who face realities day in day out.
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