Allan from Fallbrook, I agree with your point of view.
Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.
Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.
What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.
