Hey, but don’t worry. We can trust them on the numbers when it comes to Coronavirus.
Why does China overvalue its GDP?
by Salvatore Babones
Key point: Shave off a little growth every year for the last dozen years ago, and the cumulative effect is that China is now overstating its true GDP by nearly 20 percent.
China’s economy isn’t what it used to be (at least as recently as last week). Four intrepid economists—Wei Chen, Xilu Chen and Michael Song of the Chinese University of Hong Kong, along with Chang-Tai Hsieh of the University of Chicago—have taken a fine-toothed comb to Chinese economic data to try to tease out China’s true rate of economic growth since 2008. Not surprisingly, they found that China has been over-reporting its growth rate by an average of 1.7 percentage points every year.
Shave off a little growth every year for the last dozen years ago, and the cumulative effect is that China is now overstating its true GDP by nearly 20 percent.Surprise: China’s Economy Is Smaller Than You Think | The National Interest
A friend recently posted on Facebook some arguments that are out there concerning the current situation. It was a quite reasoned and well thought out argument, one you used to be able to have before the discourse in this country devolved into that between entrenched warring factions rather than anything resembling civilized, intelligent discussion. So this is an attempt to respond in kind.
The first point she makes is that the stock market has zero to do with any President. That is only true in the sense that the Stock Market does not care who the President is. Wall Street donates heavily to both political parties, and there have been bull markets and bear markets in both Democratic and Republican Administrations. What the market does care about is the state of the economy and, as such, is an indicator of how that economy is doing. Indeed, it is not the only indicator, but it is a legitimate one. It is also a place where millions of Americans invest their hard-earned money through 401k’s, IRAs, and the like. So to say that the stock market has nothing to do with the lives of most Americans is not valid.
While conceding that the unemployment rate is low, my friend mentions that she knows several people who cannot pay their rent or mortgages on their salary. I have struggled with money my whole life and will likely continue to do so until they close the lid on the box. But my issues with money have much more to do with my own decisions and mistakes than with anything that was done to me. We also live in NYC where everything is more expensive, so even making what would be considered a good salary elsewhere is barely subsistence level here, especially with the cost of housing.
All that being said, sure people are taken advantage of, paid less than what they are worth, or what they need to live. But we do not live in a caste system here. If the economy is good and unemployment is low, but we are not able to pay our bills then maybe its time to try something else. I am not judging anyone but expecting wages to magically go up just because it would be fair, well it will be a long and disappointing wait. Having the government impose unrealistically high minimum wages on entry-level jobs inevitably causes unemployment. It does not matter what any job pays if that job does not exist.