by Charles Hugh Smith
Of Two Minds
Any economy stupid enough to rely on the insane distortions of GDP “growth” as its primary measure will richly deserve a Darwin Award when it inevitably collapses in a putrid heap of squandered resources and capital.
We’re told the gross domestic product (GDP) measures growth, but what it really measures is waste: capital, labor and resources that are squandered and then mislabeled “growth” for PR purposes. If we only manage what we measure, then we’re mismanaging our economy by promoting waste as the only metric we measure and incentivize.
Forecasts now predict a rousing 6.8% “growth” in 2021 GDP. In other words, the amount of resources and capital being squandered is going parabolic and we love it!
50 million autos and trucks stuck in traffic, burning millions of gallons of fuel while going nowhere? Growth! All that wasted fuel adds to GDP. Everyone who works from home detracts from “growth” since they didn’t waste fuel sitting in traffic jams. That’s bad! Wasting millions of gallons of gasoline is “growth”!