Monday, October 21, 2013

“State of the States” Misleading and Shallow

We often talk about the numerous shortcomings of GDP as a performance indicator, and yet it continues to dominate our airwaves.

Today the ABC and other media outlets are uncritically reporting a “State of the States” report by CommSec, which purports to rank the performance of the States. The ranking system rewards economic and population growth. As far as I can tell it does not include in its ranking criteria things like protection of habitat, how endangered species are faring, the gap between rich and poor, quality of education, quality of health services, and numerous other important indicators.

I can’t see any reference to traffic congestion, housing affordability, or the cost of living pressures on older people arising from population growth. It is a pity such reports, which are shallow and misleading, receive such uncritical media acceptance.


  1. At least they should report on GDP per capita - as this is some basis for estimating how the so called 'average man' is faring from the Growth of the nation.

    Unfortunatley, when one talks of the endagered species , it all to easy to marginalise such comments as irrlevent in the current economic rationalism, but quote the GDP per capita - and the person in the street will not feel so taken up with the big Australia. Adam Kaye-Smith

  2. Everyone talks about the weather but no one does anything about it!

  3. Spot on Kevin and remember the King of Bhutan introduced GNH or Gross National Happiness and made a great point.

  4. Absolutely right Kelvin. Pointing out the obvious. But you are dealing with an entrenched mindset, particularly in the ABC. There is a singular lack of critical thought throughout most of the national broadcaster let alone any common sense approach to what is really best for the country. The ABC would never let common sense and rational thought get in the way of slavishly adhering to political correctness and the status quo. Clearly when in sycophant fashion they announce "its your ABC" they must be talking to each other.

    The commercial media is by its nature pro-population growth as this delivers a greater audience (revenue base) and true to form commercial media would not let a little thing like the national interest get in the way of a quick buck.

    So no you not see any reference to traffic congestion, housing affordability.....etc. But then given the general apathy and ignorance about this nationally important question, is it any surprise?

    But keep trying to make this issue more in the fore of the country's collective mind. Who knows it might even get a mention on the ABC.

  5. Totally agree Kelvin
    GNI is better . GNI captures our net wealth reduction via interest and dividends we pay overseas due to our borrowing and asset selling habits.
    GNI per capita is better still but still does not capture many quality of life isues as you have pointed out.

  6. All this "Economic insights" report from CommSec really says is that the number of houses is broadly related to the number of people.
    Really, the intellectual level of Economists never ceases to astound me...

  7. While a healthy economy and economic activities are important, they do not define our society and our being. Of course, banks will summarize and evaluate States with the values and data that's in their interests, which are profits and investments, but people are not just economic units, and communities are far more meaningful and profound in value than the economic data we produce! The economy is meant to serve us, not be the raison d'etre for our existence, and not to enslave us. People at grass-roots level will value what's meaningful, and what determines in the quality of their lives, such as affordable housing, high quality lifestyles, adequate jobs, mobility, space to move, connection with the environment and good amenities. What we treasure must be sustainable, and not just what can be grabbed for the present at the cost of future generations. Population growth now, at a critical time in human history, means stealing benefits from future generations who will be burdened by even more "challenges" this generation has.

  8. Vince Sorrenti on Q&A last night (21-10-13) in a humorous way exposed and mocked the consume mentality. Most of the panel just presumed we had to burn more coal to produce more electricity to produce more goods, which more people need to consume, to keep up demand for more coal, to produce more electricity - we must consume, consume!
    It is so easily exposed and mocked as a ludicrous never ending treadmill - yet these people believe in it.

  9. In Sth America GDP is PIB - producto interno bruto - the last word says - brutish rough indicator

  10. Unfortunately, economists still see congestion, infrastructure deficits, loss of habitat, and pollution as 'externalities' even as the stakes become ever higher as more and more of us consume our planet. Time that economists moved on from outdated Keynesian/Smith models that were devised when we had an abundance of resource and many less billions of people.