'Growth' scam vs. the real economy The numbers go up while the jobs go down

June 02, 1996|By James M. Kramon

A SHORT WHILE ago, the media carried a number of hyped-up stories about an economic surge manifested by a 2.8 percent a-year rise in the first-quarter gross domestic product (GDP). Last week the figure was reduced downward to 2.3 percent, but government experts say we still ought to be happy; the economy is in sound shape. I have a question: Are these folks living on planet Earth?

It is easy to understand why, when the GDP increases during a president's watch, the president will lay claim to improving the economy. The gross domestic product -- the country's total output of goods and services -- is the recognized standard for measuring productivity.

When President Clinton hits the campaign trail, it is quite likely that he will claim credit for the robust GDP and in doing so exaggerate his role in the economic surge. Commerce Secretary Mickey Kantor has already greased the president's campaign skids by ascribing the increased GDP to the president's "good economic decisions," particularly Clinton's "decisive action on the budget deficit and his determination to open foreign markets."

Perhaps we've come to accept exaggerations from our leaders, but if Clinton gets away with this, we will fail to address a profoundly disquieting economic situation in our nation.

In simple fact, the GDP has lost virtually all its meaning -- it's an artifact from bygone days. At the time such indices were conceived, the American economy was largely comprised of agricultural and industrial enterprises and businesses that served those enterprises. Back then, there was a clear correlation between prosperity and the amount of goods and services produced. Our nation's economic health depended on our farms and factories.

But this is no longer so. And the politicians who refuse to recognize this are not only disingenuous, but greatly insensitive to what is happening to us.

In agriculture, productivity today is largely determined by how many former family farms are gobbled up by the combines that stretch for miles along the highways of Nebraska, Iowa, South Dakota and other farm belt states. In other places, where farms are smaller or less contiguous, such as Maryland, the farmers simply struggle or go bankrupt.

What has this to do with gross domestic product?

When a combine with Jolly Green Giant or other signs neatly spaced every quarter-mile along a breadbasket roadway is extended to include yet another family farm, gross domestic product goes up. But it also means that another family that once filled an American farmhouse with laughter and dreams has moved to a dismal apartment in St. Louis, Detroit or Cleveland. And some of these displaced workers are likely pondering minimum-wage jobs at Burger King or Taco Bell.

You may derive happiness, Mr. President, because the gross domestic product bead has moved a little further down the irrelevant abacus your staff attends so faithfully, but those of us who have driven those roads and seen the abandoned farmhouses cannot celebrate with you.

The same distortion occurs when one looks at industrial enterprises.

An industry that "downsizes," for example, one that lays off large numbers of workers in favor of more productive robots, gets a good score in terms of GDP. In terms of "efficiency," as the government's economic gurus have defined it for us, the ideal industry would be one that manufactures incredible amounts of goods in a totally automated production facility having no employees whatsoever.

But if one looks at places where people who used to work in factories live, one sees virtual devastation.

Mr. President, tell the workers in Essex or Dundalk that they should feel good about the record "surge" in the first-quarter GDP. Tell them, Mr. President, as they try desperately to sell their houses in neighborhoods where the economic bottom has fallen out and the quality of life is in a virtual free fall.

Mr. President, stop telling us with GDP numbers that the economy is doing well. Stop telling us with numbers of arrests and tons of contraband seized that we are making progress in the "war on drugs." A dying person does not need to hear that his temperature is still normal. If our government cannot make any headway with our social ills, it can at least not insult or patronize us.

There is a story going around -- perhaps apocryphal, but telling nevertheless -- about a luncheon recently attended by President Clinton. The story is that Clinton is mentioning the "8 million jobs" that have been "created" under his administration. As he proudly cites this purported accomplishment, a waiter looks up and says: "Yeah, and I've got three of them."

Mr. President, don't tell us we should feel good about the part-time, minimum-wage, no-benefits, no-security jobs that have replaced the secure full-time employment we once knew.

Don't tell us, Mr. President, that there is cause for celebration when a robust gross domestic product symbolizes the end of the American dream for millions of workers. If you must say something, tell it to the displaced farmers or the industrial workers who've become obsolete. And If you have any trouble finding these people, let me know. I'll be glad to show you where they live.

James M. Kramon is a Baltimore lawyer.

Pub Date: 6/02/96

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