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tv   After Words  CSPAN  April 6, 2014 9:00pm-10:01pm EDT

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at the beginning of your book you go all the way back to 1066 in william the conqueror and the fascination with trying to measure where we stand in the world. >> guest: let me start with why i wrote a book about numbe numbers. i'm not a trained academic economist but i was interested in the discussion how we get to live in a world where the numbers are woven into the identity into the conversation about how we are doing as a nation not just as americans.
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the question is was this always the case and no it wasn't. the question was when did people want to figure out what was going on economically with members. i start the book with 1066 because the first major effort in the modern world was about william the conqueror commissions to survey the output of the realm. and the empire basically wants to know how much land is under their control how many troops and how much farming output because the tax revenue as agriculture. sis agriculture. so it is an effort to count who is farming was with the exception not including the church under the authority.
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>> host: this is the big theme of the book that it has its flaws. >> guest: it goes in the realm to whatever was being grown but what it's kind of shows is there's a big difference between accounting and statistics and there's been a good book about statistics. it is the art of sampling a lot of stuff you count without having to count at all individually. they go around and count everything. >> host: it is very different from counting and you point out there is another leap forward in attempting to count stuff and we get to the age of empire and trade so now you have the global industry. it reaches this point between
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accounting and statistics, what the statistics do for you. >> guest: in the age of enlightenment people realize the aspects are too difficult to count. the other thing is if you go around and count the first thing people realize is if you count the average lifespan that is at the time a lot of people didn't make it past five or six or 7-years-old if you want to count infant mortality the average lifespan would be low. you have to make the choices of what to leave out and how to weigh things out and then there's the series in the and te formula of how to do that artfully which developed in the 17th century in the same suit that of the german and the french world of creating statistics.
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there is a whole number of people if you are a statistician you remember the great minds in the way that we look at new ten in terms of the countless and gravity that there isn't really one person. this is just a rolling series of the mathematical evolutions and it takes until the 19th century before you start getting the kind of economic sticks that we think of now. >> host: this is focused on the united states and you make the case that again the question of counting was ever present even in the beginning of the united states and very much on the mind of the founders and it makes its way into the constitution. >> guest: we talk about the slavery and north and south and minority rights. we don't usually talk about the census embedded in the constitution that every ten years there would be a count of the population.
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it wasn't a representational democracy and you have to be signed how many representatives in the house such as the one part of the government is the key to the population that it's going to represent. but it moves from just how many people are there and where to the human curiosity to map and measure. what are these people doing, what is there an employment for how many hours do they spend working and what is the nature of their home life in terms of output so you kind of "-begin-quotes creeping growth. >> host: that gets us up to the end of the 19th century and 20th century where we begin to see the arrival of these modern indicators have come to define us so much. i think most people would be absolutely astounded.
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people would be interested to find out that the first of a lot of these economic indicators were driven by a huge part of the political controversy cause of the social justice that came along with the industrial revolution and labor unions, people worrying about how much of they work and how much were y keeping and you have the great story of the stewart. tell us a little bit about him. >> guest:. something called unemployment it would have been a meaningless question because when you have the world that everybody needed to work literally the idea that you could be unemployed or without work was inconceivable. there is almost more things than the bodies are capable of doing so if you're not working because you were drunk or you have a no moral character or your
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inherited -- you had wor work tt needework that'sneeded to doing. so it took the industrial revolution and the sort of transfer of the workforce is painting with broad strokes to find exceptions to the rules. one of the things that drives the question of what is the nature of the work do people have a job, are they getting paid for that job adequately rather than their needs in the use of the reforms in the 19th century is to solve the industrial revolution as really chaotic dislocating ones and one that is drawn to the social justice in the late 19th century who was trained in the illinois and ends up being appointed to the illinois commission and then makes his way to washington as it was then that very sleepy and not very well-funded bureau of
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labor statistics. i think of him a little bit as a statistician named mark twain suffered fools and i'm going to call the spade a spade and find the numbers to measure and he was one of the driving forces of the made a snapshot of employment. he is a man in the right time because you have a confluence of other factors in particular 1920 and 1921 we have a recession as sort of locking people for a loop and politicians saying how can we measure how bad it is when we don't know where we started from and then of course you have the great depression and this seems to push you on that desire to understand just what we are losing or how bad it
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is. >> guest: he was eight jailed professor sort of thinking about the prices and what we now call inflation. so there have been some work done before the great depression on what's going on in this thing we call the economy. until the early 20th century i can say with any confidence if you use google that is anything printed on the database and you can find the frequency where things were used if you type in the words economy until the 1930s plot lines and then about 1930s it keeps accelerating because until we create numbers i could be unemployment rate and gdp inflation there is no economy. there's the political economy because there is no means to
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measure and capture it and it took the great depression in this massive dislocation and we didn't know that it is the great depression. all the people knew it was some bad things happening that seemed worse than earlier things that had been happening because there had always been bad cycles. and hoover had been an apostle of the scientific management. he was a competent administrator during the war, he was an executive, and he be leaved in scientific management of everything and the science demands everything. 1929, there were none that he believes in the movements that were placed in the bureau of labour statistics to actually create and unemployment number and that is the first time in any other country's history when the notion of the unemployment number because central to the body politics.
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>> host: coming up within unemployment number involves making lots of judgments and as of the first characters that you have in your book he had to sit down and say we are going to count this and this is our definition. talk about the array of complexities in that employment. >> guest: what does it mean to have a job, what a number of hours doesn't mean that you are working in the time in the late 19th and early 20th century 20ty people would work 70 hours a week. how many hours do you have to work, do you trust people's self identification, do you have a job, are you going to tell the truth, are they going to send around and asking if people to ask every single person do you have a job, do you have a job do
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you do it geographically and if you do but only in urban areas are you going to overstate how much unemployment there is and if you do it only in the rural areas is at population or demographics, so these have to be worked out and in no way are they worked out initially immediately. the definition of what does it mean to be unemployed has changed over time and it's not not having a job to use a double negative. it doesn't mean you're not working. it means that you wish to have a full-time job and you have told the people asking you that you are actively looking for a full-time job before you got asked that question. and you are therefore unemployed because you are looking and you can't get work. it's not that you just don't have work. we use the term much more loosely today because we use it as a thumbs down. getting to the point of defining
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it was immensely complicated. >> host: who made the final decision? >> guest: this is by lots of different voices and people are doing. it's not like there was one person that says this is the rate also the reason you should focus on the united states is a lot of the creation of these numbers comes from the united states and then goes global and it's a kind of demand note to understand what's going on economically at least in our history from the american initiative and british initiative it goes global. we have the creation of the product as a precursor of that. this is happening at the same time. you pointed out part of this was needing to assess the depth of the recession and the output of the country now versus what it
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had been and how things are going to look going forward, but you also point out and this is when you get a new aspect. what is happening at this time is that you are also getting the concept of the government as an economic actor. >> guest co. the government had always been economic actors because they force everything to focus on the war production and supply in the army and one thing you had in the 1930s as we know is a huge effort of government spending in the new deadeal in the united states ann great britain. one of the things that happens in the u.s. is the understandable desire in the state of its critics for the unprecedented stuff. unless you could measure this thing called an economy and its output independent show its
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output spent a lot of money it's an ideologicain ideological argh it had been untold and. so they were back to measure the output of the country economically and as it happens before they become -- it's in the 17th century there is a low where they do experiments and crushes it would be fun to measure the output of the country and then it kind of lays low until the early 20th century some efforts and the u.s. there is an economy is who later when the nobel prize and john maynard keynes in britain and richard stone they start saying how do we measure output. what does it mean to measure
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output do you include domestic work because one of the things women did it largely was cook and clean and make sure the home was taken care of. they said look we absolutely should include this. this is an essential aspect of economic opportunity that's productive in the absence it is productive. unless it has a market price, we are not going to include it. what is the market output, things that are bought and sold so we decided to leave out the domestic work because it was hard to figure out what the cost of that was. >> host: this is about the roosevelt administration saying look we put this much money in and now this is all the benefits that came from. they had a predictive value that
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you have to stimulate demand in order to know how much you have to stimulate demand you have to know where things stand. >> guest: and vanessa gets to things that are a little bit familiar in the discussion after 2008 and 2009 like how much output do you need to stimulate him how much demand, what is the gap between what we are doing and what we think the optimal and the right level is if we think about that in terms of employment. if there is a 6.5% unemployment rate if i told you that and you arwere dropped down here from ms there would be no reason to know if that was a bad number or bad number. it's only perceived as bad and this isn't whether or not people are finding jobs because we have this sense of what we thin thine system off to be giving numerically based on what it did do the numerically and none of that pertain to. this is all being made up as it goes along. it allows the administration to
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talk about the income in the late 1930s and they look the national income is coming up. the next is world war ii. the challenge in world war ii as we are going to be the armory of the world. how much domestic industry, cars and tractors and whatever we were making could be shifted to producing diamonds and planes and ammunition without the domestic life. how much can we produce, how much more can we produce without generating scarcity and inflation which had been in the society during the war creating the gdp which is one of the tools to do this. that was a potent tool at least people believed to be one of the most essential components and allowing the united states to calibrate the war effort with
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the domestic economy so that in 1945 having won the war without having to revive your economic life and that is what allowed the united states to be so powerful in 1945 because fighting a war like that it takes years to rebuild internally. >> host: you go back to this point on the economy, the statistics about the creation of the economy and what you're also describing and what you do well in the book is the shift to the government having the ability much in the way that mirrors the industrial revolution to manage the economy. and you could actually look at these numbers in its a-ok now we are going to move this much here and there. this is a new concept. host >> guest: they figured out how much revenue can i create. that was the sole challenge because the dynasties and the kingdoms.
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but the idea that you have this thing called economic policy where you calibrate and to try to end the cycle cycles in the d down that is part and parcel for one reason or another that is all a part o of this scientific revolution and the emergence of the centralized government, and it is in fact one reason why even today there is -- and i'm sure it will continue to be a deep-seated suspicion in the society that all of these numbers, gdp, inflation, employment are not numbers that reflect the experience of people they are the way is to exert control. i don't go into that in the book and i think that is a holdover question and subject but it is definitely one that underlies all of the discussion. people look at these numbers and they say come on. inflation isn't telling me how much it costs for me to live it is just a way for the government to prevent my cost of living allowance from going up. >> host: i do want to talk about the conspiracy theory because it is a fascinating aspect. you touch on something basically
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post-world war ii when you describe how we enter into this sort of explosion of fascination with economic indicators. they start to get involved and we can talk about a few of those. one of the innovation is an indicator that you have this guy that starts to measure and this gets to your point about the consumer sentiments and uses that as an economic. >> guest: you had some before like there had been housing associations and some are choosing managers, the people of the companies that buy stuff to figure out what was going on nationally and get the associations creating statistics so we are going to create statistics and then in the epic debate academics there was this guy who came in the 1930s and
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trained both as an economist. so if anybody remembers the 1970s as a big deal and without going into that discussion, his belief was how people think and feel and shape their behavior economically and therefore if you can engage how people feel you will get the gauge of how they are about to act. that was interesting for the government during world war ii because there's always been an aspect of inflatio inflation ins that is based on the on what people perceive. if you think things are going to get cheaper come if you think there's going to be inflation you will spend a lot now. there is behavior that goes with the expectations that they want to make sure that inflation expectations were being kept maintained. and they developed the basic survey do you feel good or bad about the personal finances, do you think it is good to be
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better in six months or worse. then you take all of those questions in surveys and you add and create the numbers and the index called consumer sentiment which we now live with every month for multiple sources. there are three organizations to disseminate the consumer of the conference board, abc news had a survey. it's really interesting that it's predictive powers are absolutely zero. and legitimately. the pushback was a kid test whether or not this works by asking the family six months later to whether or not they did what they said six months before so it's not like it's individual behavior being predicted. they say they aren't feeling good that might be the leading indicator. nonetheless this remained.
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we want to be in the culture that we like the numbers to sort of describe reality. >> host: this is the point of the chapter that you talk about in the 40s and the 50s. you don't just have this spiraling of numbers that give the media really focusing on peace and business community is really focusing on these and they come to be interwoven in america's ideas of how we are, how we perform with everybody else. correct? >> guest: yes. there's the business week phenomenobusinessweekphenomenony have this outlet that talks about economic life. because it was a cold war we were not fighting the soviet union and it was received legitimately as a contest of economic systems. ideological and the modes of production. so a lot of the cold war unfolds
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with whose economic system is doing better and who is making more stuff, whose is better than whose output is greater. we have the gross national product. kind of arguing about the appliances and part of it is whose stuff is better, the nuclear weapons on the one hand and then you have industrial output on the other and then you have all of these in the world kind of the colonizing in france or britain or portugal and one of the things you have to do when you join the un is you have to start measuring this thing called the economy because if you want economic age in the world bank for the monetary fund the criteria is you have to be able to show that money had a good effect.
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if you are a new african country you have to show that it's improved your economic life, you have to start measuring the gnp and gdp. by the late 1960s to go from the world when measured prices or output or employment to what everitevery country in the worls doing it if they are doing it to the same blueprint. >> host: in the world bank and the imf there is a requirement to do this but what's fascinating is why. you describe how you are coming out of world war ii and there is a fundamental belief one of the reasons things went so wrong. it's part of the motivating
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things that pushed it in. we don't want a situation like that again. we want to know where do the economy is stand in the world because this is also going to allow us to manage peace and stability. >> guest: half of it is about economic writing about economic security and there is an economic security council that some of us unless you were to look at it are ignorant about the security council because it was front and center about the problems and half of the work was about the economic development exactly in the belief in the economic insecurity when you have things like the great depression and ad then that will then lead to things like world war ii. that may be a wrong thesis. but it was the animating thesis and that led to this. there is a proliferation of economic numbers. whereby the entire world becomes
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an indicator. anyway between the 1950s absolutely no one did. >> host: after what inspired this growth in world war ii there is money in producing the private organizations. you mentioned george and his work in the university of michigan which i believe has made a fair amount of dollars. >> guest: that is a big factor into game a later one that you have to get into the 1970s and '80s people want a trading edge in debate starts trading on the numbers in the belief that the numbers will then represent something fundamental in the activity and would have an influence over the corporate earnings. the institute of the supply management starts putting out
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numbers about manufacturing activity and then the federal reserve starts getting into the act using the regional manufacturing surveys and again you have this proliferation in a way that is sort of just inconceivable and one of the things i try to be very clear about in the book is that just like we all have a point of origin we are built at a certain time and shaped by that culture that we grew up in all these numbers are bored within a few decades of each other fundamentally and they are a product of this time. in that respect they were not designed it that origin to measure and they do a pretty good job of measuring. they do a good job of measuring the world of industrial nationstates that makes that up but we don't live in that world any more. it's to try to understand who invented the numbers to look at what question at what moment in
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time. >> host: let's talk a little bit about all of the problems on the fact that we have arrived in this period that we defined ourselves on this. these numbers are by and large wholly inadequate for the purpose they are used and one of the descriptions i just loved is talk about the way that we measured for instance the trade deficit and how that might have worked at one point and how it doesn't work anyway now to adequately tell us what our trade deficit is. >> guest: i do think a lot of these are inadequate and i honor the degree that they were not just inadequate they were important when they were invented. your parents and your grandparents still remember the 1950s chevy.
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there's no air conditioning, no antilock brakes. the trade numbers are very old in the sense of the revenue in farming and trade act as if everything that we buy and purchase is made and one place and one country. and we think in the 1960s when a lot of the initial rules were codified even in the 1980s. it is made in a factory installed it about in that country. it might have been parts that were different but in detroit and what of the parts came from toledo and it's still an american car. so today the iphone which in many ways is the quintessential
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american product invented by this genius in the silicon valley headquartered in california on and off the company in the world every time the iphone gets sold in the united states it registers as an import from china it's hard to know exactly that about $10 million a year into those devices alone after the trade deficit with china because they are made in factories in southern china so they get made in a factory and put on a container ship on long beach and they get assigned a hotel which is $220 it is a $220 import or $250 import from china, but is it really? is anything that we now use really made in any one country? whether it is a t-shirt where cotton comes from one country and the pattern comes from
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another and thus watches come and then they are assembled, it is assembled in a factory. it isn't clear that $220 or $250 comes from the united states to china because if you break down that phone which a lot of economists have done. there are parts from taiwan and somewhere else and above all intellectual property from the u.s.. but in the world of trade numbers that assume the object has a final substance transformation in one country with no way of breaking any of that down. >> host: i think the retail value when they first came out it was $499. nobody ever paid that much because of agreements with cell phones. but i think that you could do
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this for every manufacturer and others that are not as a furniture clothing and you would find that the way in which value is dispersed in the global supply chain we just don't know how to capture the set of numbers that assume anything is made in one place whereas today most things are made everywhere. the boeing 787 dream liner was possible because of information technology that allows you to design this plan on an auto computer system and then source parts from dozens of countries around the world. every time it gets sold outside of seattle to the airlines it shows up in the u.s. export. but it's not in the way that we would assume the value added flow coming in we are doing i think just a really bad job of capturing it. even worse is i don't know how we change that. no one is going to spend billions of dollars to break down hundreds of thousands of goods into those various components and so right now we are stuck with the figures that
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we have but it is creating what is going on globally that is profoundly wrong. >> host: living in a global world of these numbers, you know, these indicators, many of them have been and continue to be mired in controversy in terms of you talk a bit about the complexity that went into the decisions about what you count and you're not going to count. but think about it the one that you devoted to on the inflation probably on a daily basis there is no more controversial issue than the cost of living because people bb that is at a certain levels of a can keep them social security benefits they have to keep a course of the businesses don't have to pay their employees as much. it is all the more reportable given the kind of crazy
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decisions that go into deciding how this has come up and whether or not it is a very good indicator of anything. >> guest: part of it is was inflation as an index is supposed to do. it's supposed to measure the systemic price stability. it isn't supposed to say whether or not our cost-of-living is commensurate with our income and whether or not we are able to meet our needs or desires of both relative to what we expect. so inflation becomes a peoples experience of their economic lives versus their expectations versus the ability and human memory and around the prices is that simply terrible. it's clear at least from the inflation numbers as it is measured by the consumer price index the amount of money that you and i spen spend as a percee of income on fuel has gone down dramatically since the 1950s, but that isn't our daily experience of meeting our needs. and to be fair i think that
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inflation numbers that are kept by the government are among the more reliable and some of the attempts to do the different methodologies they started their own inflation index because all of this information flowing through it at the economists created the conduct of the cassette instead of sending out expensive surveys that cost hundreds of millions of dollars, you have a computer program that takes the online pricing in real-time. what's interesting about those is that they do not a virgin whole lot from the official inflation numbers. the problem is that as the answer versus what are the expectations from the public and again, they are not meant to tell us our cost of living. but that's how we discuss them into the other problem with inflation is we are no longer buying the land lines. they are dependent on the government statisticians call you on your phone at home so if
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you don't have a phone at home if you are 25-years-old if you don't have a landline the odds of you being reached by the surveys is diminished because you don't want to mess up the sample set because you can take it from you anywhere. they don't answer survey questions and nearly the same rate. so where are we getting our information from? >> host: putting together some of these samples going back and had the first unemployment calls that went out and you were talking about a lot of the people that were hired to do this were hired as a part of the government works program. they didn't necessarily know what they were doing and apparently the product from back then is -- >> guest: a bunch of them got bored and sat down and started
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filling out the sheet for themselves. even today there are these lingering suspicions that we have about whether or not these are numbers that are cooked or somehow manipulated. i think the likelihood of that is really low. but there are such complicated and teased out in such vast databases going into them that what are we measuring versus what do we think that we are measuring. >> host: the controversy like this goes way back. george that ran the federation for a while was a fierce critic of the numbers. in 2012 there was an argument about whether the unemployment report had been duped in some way but the question i have for you isn't it may be fair for people to wonder that to some degree because only because your
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vote in fact it is all about the kind of history behind some of this who wanted to use these numbers to some degree to a social order and justice. >> guest: most of the people who are in charge of compiling statistician to answer the question and because of that what degree even if they are perfectly done what are they measuring versus what is the world that we currently have and the conspiracy question is always a secondary one relative to the promise of the numbers versus what they actually deliver which is the real issue. the economists in particular as if they are absolute patterns that emerge that you can then
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know. when president obama gets up in 2009 they make the speech of the stimulus bill we will create or save 3.5 million jobs. i want to make it clear this isn't a partisan critique of the stimulus plan. what fascinated me is what allows the leader of the country to get up and make with such specificity in dollar amount of spending the job creation numbers that specific? nobody got up and made that he would have said we are going to spend a lot of money because there is a problem and it's going to do good to me that's one kind of statement but to make a number that you spend x. amount of jobs and then comes out the belief we have enough information and data and enough of these numbers that we know that when the government spends a certain amount of this amount of job gets created but if they
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are invented the middle of the 20th century, we don't know a lot. we don't know nearly as much as we think we know to make those kind of statements on a routine basis and democrats and republicans do this about all spending bills. we project what we think the effects are going to be and i'm highly critical of, nothing they are doing with the entire defeat behind it that we can do with any degree of certainty the outcome of these things. >> host: this is happening at the time that impact when the economy has become more complex, more difficult to govern you have a government on the one hand has become ever more self-assured about its ability to manage this thing called to the economy even as this thing called the economy has become ever more unmanageable. >> guest: that global. we have been talking for 20 years now which we live in a global economic system and it's true of everything that we die
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back to the iphone we live in the global supply chain in the world that money flows globally. so the idea that the 1950s national number can adequately serve as a 21st century international global change how do you measure google in gdp? there is no information technology of the kind that we have now that we use so we don't have a marketplace and the only way that an economist now can figure out what is the economic output of the free application is to think of while we value our time working if you take 15 minutes to go onto google you are essentially valuing your time at the quarter of an hour if you were and multiply that times the amount of power they spend. that is a way to get at it.
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>> host: in addition to the hubris that you've mentioned and the controversy into the role of with how well they can predict anything you have a something that the difference between leedy the idea of the indicator it is rare to begin with. maybe it's just us and the politicians t that help inspire the creation of these leading indicators are very interwoven with politics today and all the way back to talk about hoover and the fact he drove so hard to get some measure of unemployment and it hurt him in the end because they found out that it was quite bad. >> guest: he predates the number that he then gets to use. i think of that as part of -- again every country in the world now, think of the chinese government, they made their
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entire sense of legitimacy hinged on maintaining the level of gdp growth and creation that is statistically manifest. the numbers become our latter-day version of land and empire. we measure the national based on what these numbers tell us and so we literally invested them with a huge amount of weight and it's impossible for them to not enter a kind of political debate and political dialogue even though again i feel that we are capturing only one aspect of the world we are living in because it is not like it is a major global move. you also mention not just china but argentina. it became a global pariah because people felt it was cooking its own indicators. >> guest: they were hiring
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inflation and if they wanted too be reported because it was undermining their claim to economic stewardship. i'm sure there is an equal the length and north korea has a set of numbers that they write down. the group that got fired tried to set up a nonprofit group for the due diligence group and then they stripped them of their nonprofit status to prevent them from being the watchdog. so we don't have that issue. that is one saving grace. >> host: if we went back and you looked at the world prior to some of these leading indicators are we even better off now? >> guest: >> guest: i think that we were better off.
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>> guest: i think the problem of economic policy today is that it hinges on the belief commanded this is true no matter where you are in the political spectrum but if you capture what's going on statistically and manipulate effectively and the business cycles have to become less intent could be upset counts today even with 2008 and 2009 are probably not nearly as severe as they were. so we have removed food salmon on the one hand and a problem in the political problem and we removed the worst of the economic cycles that you don't get 30% of the workforce by the millions. i think that it's in part because we learned something about the economic systems. that is very different than how do you deal with the changed reality. we are very good at managing the economic system of the past. again we are flying blind but we are using the only math we have
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got. >> host: you talk about movement from some to create the indicators of the work and have a fabulous story that seems to go back you even opened at the beginning of the book with a speech this is a long-running theme that robert kennedy gave all the way back in the 60s saying whaling against gdp and saying we ought to be measuring our confidence and in the way that we educate our children and all these other things that make up a great and the good america. and you still see that satisfaction with the attempt by others to come up with something better. >> guest: there is a big gdp backlash in the 70s because they were seen as the materialism and the materialist versus the foster of the values that are important in any society, happiness. and that is where the small kingdom -- we ought to be measuring the aggregate happiness, not individual happiness.
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and although westerners have sort of sense than this is how we measure happiness, forgetting that it is pretty collective. and a lot of it would be rather unhappy with their happiness. again, the issue there is not okay is that a better way to measure something that the gbp fails to measure it it's the ida that you could come up with one number that adequately tells you anything meaningful about the world that you are living in economic or otherwise. 1 million workers what good does one member told you, one is always a synthetic average of something and maybe it does about the system now in a kind of aggregate sense. but the gdp tells you very little about the questions that we have as americans about the quality of life and sustainability of economic growth and what economic activity is likely to be sustained and augmented in the
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future. that's really good for gdp because you spend a lot of money cleaning up after hurricane but it's not like you would say to fix america's economic woes would have five hurricanes. whether there are questions it's almost as if i'm trying to help myself say we should start with the questions and then find numbers and statistics that help us answer them because all those numbers are created initially to answer the really important question. it's when they get detached from the questions they are supposed to answer it is enshrined as a number that we have a real problem and the people that created these numbers understood that is what they do to enshrined them and forget what they were meant to answer in the first place. >> host: this is your idea rather than coming up with just an alternative print indicator.
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so turn this entire paradigm on its head and say what is the question that we are trying to answer and then look at the vast range of data out there and get back. >> guest: it means beta to measure if you are going to talk about measuring things, what are you trying to measure and why. so, gdp has become a -- gdp is supposed to grow because when it grows, people income grows and people's quality of life goes up. what we are seeing today in a lot of parts of the world is gdp can grow quite a bit without income going up. it is a factory that is good to produce a 500 people used to produce. it's without creating any kind of job. so, the question of gdp is supposed to answer is our collective affluence going on with the gdp goes up that may not be true. what then is the question that is how is it doing well and where is it doing badly and we have more information than ever
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before. >> host: the states and counties and geography. >> guest: the one defense of the numbers today being collected is underneath every member is vast amount of information. every report comes with hundreds of tables. there's eight different alternatives by geography and consumption. we don't use that information. when you get down to business individual level then you have to start going these numbers do what? if i told you gdp is going u up% were down 2% and the national association of the mortgage said that there was x. number of mortgages into the house raids how would you decide to them by the house or not t house or note house on the basis of? >> host: isn't as involved in the most basic things? i mean if you are in business
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and you want to get a good sense of where things are headed in your particular industry why wouldn't you just look at the price is? it pertains to the industry and the important thing is if you want to buy a home today, the thing you need to know is it is in a 10-mile radius in the employment pattern that is the local economic system that is going to support the price of the home including your own unemployment reality. you can do that now puts everything in thwitheverything f you wanted to do that years ago i'm not sure how you would have gotten that information. it might have been a 60 day lag. so that's actually really easy y now. the information that we have is really easy to obtain. we think it is really easy to obtain international numbers.
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we advocated that we get rid of them. one they are the justification for a lot of interesting information and number two if the policymakers use them more wisely and we make that statement in the full awareness is minimal. but if we all woke up tomorrow with wisdom and maturity on capitol hill like a really good disease you could use things like the unemployment numbers to guess at where are the employment issues in the united states and why are they happening just very different than the national rate that acts like it is the same in bethesda as in detroit and in las vegas. they would say to have a status that overtime when you can compare how things are now versus how they are then i am more skeptical of that because the methodology is always
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changing. have the time we are going back into changing the data with the methodology. we built a factory that generates jobs because we are misunderstanding the nature of the factory today and the unemployment today. one of the other things is maybe what we need is a spectra of a kind of possibility and probability. one thing i've noticed is that it seems to have begun to slowly with the fact that some of the indicators to tell us as much as they should and so i noticed that five years ago prior to the crash they would report the monthly unemployment numbers and now when you turn on the tv they often report the monthly number and they talk it up a number of people that dropped out of the workforce and the mitigator questions involved, so we do seem to be moving.
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>> guest: i would agree there is some motion and movement of air anthere and it is inevitabld important as our thinking about what is the better way of capturing what we are living in rather than the recourse to this pretty limited framework. even then, we talk about the unemployment rate and we act like every job that gets created is a good job but it really isn't. when you are working at $12 an hour we should be talking about the quality of the job and whether it is allowing people to meet their needs. it's not necessarily a plus or minus a few are 27-years-old and you are unemployed or you're not even in the workforce you try to create a business that is probably a good thing. none of that we would be able to discuss constructively in the current framework. so do you get rid of these numbers? they offer a pattern of what is going on in the world, but a much looser one.
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but we have massive information in the data world that we can use really constructively if we allow ourselves. >> that was "after words" in which authors of the latest books are interviewed by journalists, publi public policy makers, legislators and others familiar with their material. after words airs every weekend that 10 p.m. and 9 p.m. on sunday at 12 a.m. on monday. you can also watch after words online. go to booktv.org and click on after words in the book tv series and topics list on the upper right side of the page. booktv is on facebook and
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twitter. twitter. mike and follow-ups for news, schedule updates, behind the scenes looks at events and to interact with authors during live television programming. here are a few of the social media posts from the last week. earlier this week we posted the washington examiner article that senator cruise's book deal with harpercollins. according to the article he won't receive a $1.5 million advance to write his memoir. we also posted an article from publishers weekly reporting on book sales for 2014 which increased about 1% over 2012. we tweeted about upcoming events as well as an excerpt and politico from the new book on the 1964 civil rights act. follow us on twitter as booktv and like us at facebook, facebook.com/booktv for more on publishing and what is happening in booktv. you're watching booktv. next, carolina glick argues the
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two state solution to the conflict has failed miserably and is based on palestinian claims that are unfounded. this is just under an hour. [applause] >> we live in a surreal times by privilege and pleasure today to introduce a remarkable woman who has written an extraordinary book in which it is argued the only viable way to resolve the middle east conflict is a one state solution. i am going to let caroline explain why that should be so. ..
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