Now That GDP Is Contracting, Bloomberg's Editors Decide That It's 'An Imperfect Measure of Progress'

This is so pathetic and predictable, you could almost set your watch to it.

Just ten hours after a government report showed that the economy went into contraction for the first time in three years during 2012's fourth quarter, an item penned "by the editors" at Bloomberg News appeared which scolded us that the nation's gross domestic product (GDP) is an "imperfect measure of progress," and that we really should be looking at indicators of "social progress or human happiness." As usual, when things go bad in Leftyland, the problem is the yardstick, not what's being measured. The first four paragraphs from the editorial, which reads like -- no, make that "really is" -- the text of a leftist political stump speech, follow the jump:

Which is better for a country’s well-being: $10 million spent constructing a jail, or $10 million spent producing a line of smartphones? How about clear- cutting rain forests to produce $10 million in lumber? Or a storm that requires $10 million in repairs?

Using today’s most common shorthand of national welfare, gross domestic product, all of the above are equal. GDP measures only output, and makes no claims on the quality of that output, let alone on subjective concepts such as social progress or human happiness. It does what it was intended to do -- offer a value of marketed goods and services produced in a country in a given time frame -- and does it reasonably well.

Unfortunately, as you’ll probably gather from the reaction to this week’s announcement that U.S. GDP unexpectedly declined in the last quarter of 2012, politicians have increasingly come to rely on this measure as a singular tool for calibrating public policy. This is a mistake.

As useful as GDP is, it has some crucial flaws. It can obscure growing inequality and encourage the depletion of resources. It can’t differentiate between spending on good things (education) and terrible things (cigarettes). It doesn’t measure the economic services that nature provides, such as the dwindling wetlands that once protected New Orleans from storms, or those that don’t come with a market price, such as raising children. It fails to account for the value of social cohesion, education, health, leisure, a clean environment -- in other words, as Robert Kennedy once put it, GDP measures everything “except that which makes life worthwhile.”

Remember, these are the people, led by certified lefty, Bloomberg Executive Washington Editor and former CNN political hack Al Hunt (no, I don't know whether he was involved in the piece's preparation, but he might as well have been), who supervise and edit the production of the news on which much of the business and investing communities rely. Yikes.

If Bloomberg's editors ever got their way, their modified version of GDP, which would then stand for "gooey domestic product," would be engineered to ensure that it would always look great during leftist and Democratic Party administrations, and awful during conservative and Republican ones -- regardless of the underlying reality.

At least for now (I hope): Dream on, guys.

Cross-posted at BizzyBlog.com.