Archive for the ‘Economic Data’ Category
[Originally posted Sept. 29, 2009 on the Huffington Post]
As the world’s leaders descended on the burg of Pitts, that rascal Sarkozy handed out a French-made pair of 3-D glasses. Upon the one-year anniversary of the financial meltdown, the French president suggested that we’ve been evaluating the financial world with one eye closed and have been distracted by the “cult of statistics” that traditional economists feed us. Now that his Nobel-winning duet of economists (Joseph Stiglitz and Amartya Sen) have delivered their report that suggests France adopt a “Joie de Vivre” index, this conservative president has started sounding like a leftist or at least someone who spends a little too much time reading Sartre in Left Bank cafes. And, of course, the conventionally wise around the world chortled about how naïve this diminutive president could be since happiness and joie de vivre aren’t really measurable. In fact, for most economists, if you can’t measure something accurately, it ain’t real. Maybe that’s why economists are such a glum bunch.
What is the recipe for success for a country? We’ve been worshiping at the altar of Gross Domestic Product for nearly a half-century, yet one observer recently suggested, “If we all put bars on our windows and buy face masks to deal with pollution, guess what? GDP goes up. That doesn’t mean we are better off.” In 1968, Robert Kennedy suggested that GDP “counts napalm and nuclear warheads” and, yet, here we are forty years later, just starting to ask the blasphemous question of “what is real?” Economist Joseph Stiglitz suggests, “What we measure affects what we do. If we have the wrong measures, we will strive for the wrong things.” There was a time when having a chicken in every pot and two cars in every garage was our real measurement of success in this country, but maybe it’s become our measure of excess in the past few decades.
First, Bhutan…now, France. Are we on the verge of a great revolution in which political leaders redefine what’s real and what’s measurable? Forty national governments are studying or adapting Bhutan’s Gross National Happiness Index to imagine how they could create the conditions for their people to have greater well-being. As Sarkozy says, “If leisure has no accounting value because it’s essentially full of non-market activities like sport or culture, we put productivity above human fulfillment.” Take it from a Frenchman, they know their leisure!
Well, I know something about Joie de Vivre, myself, as it’s the impractical name I chose for my company twenty-three years ago. Our mission statement (“creating opportunities to celebrate the joy of life”) sounds straight out of the French socialist playbook, yet this mantra has allowed us to grow into the country’s second largest boutique hotel company. Miraculously, making employees and customers happy creates beaucoup bucks for our hotel investors (although less so in times like these). And, we measure all kinds of things that our traditional hotelier counterparts don’t typically fathom: our employees’ sense of meaning and connection in the workplace; the number of employees who take sabbaticals (all our salaried employees get a one-month paid sabbatical every three years); our customers’ sense of feeling they are in their perfect habitat in our hotels; and the amount of money we raise for grassroots community organizations.
If you were president, what key metrics would you try to evaluate to determine whether you were leading a successful country? Here are some of my suggestions, but I look forward to reading yours:
% of High School Grads who go to College
% of the Population that volunteer their time or donate financially to non-profits
Commute time (obviously, with higher rankings for shorter commutes)
Legal immigration demand (this has historically been an important measure of America’s greatness)
Capacity for innovation (either through measuring patents or the like)
# of Hours Worked/GDP (our productivity is at the expense of our leisure)
[Originally posted Sept. 16, 2009 on The Huffington Post]
The Fed announced the obvious last week. They told us we’re on a slow path of recovery and that the recession may be declared over this quarter based upon the fact that current economic indicators are a little less pathetic than they were last summer. But, they also told us the unemployment rate ain’t coming down any time soon. In fact, expect the U.S. to crest above the 10% rate some time in the next few months as we’re currently at 9.7% nationally. And, in my backyard (California), be prepared for a lucky 13% unemployment rate by year-end. When you factor in people who are no longer full-time or are now earning substantially less in a new job, nearly one in five Californians are “underemployed” or unemployed.
I don’t know about you, but a jobless recovery seems pretty joyless to me. Earlier this decade, economists were telling Americans that we were experiencing a boom, yet a large percentage of us were still raiding the cookie jar (our home equity) to pay the bills. I’m wondering whether there’s a growing disconnect between how we define macro-prosperity with how it shows up in our micro-lives and what kind of psychological damage that does to us along the way.
A couple of weeks ago I tipped a few beers back with an unemployed, old friend who lamented the fact he was in a “sexless marriage.” Given my natural proclivity toward being a shrink, I inquired a little more without getting into the juicy – or not so juicy – details. As it turns out, this poor fellow wasn’t as sexless as he proclaimed. In reality, he and his wife had a once a month date night in which they renewed their wedding vows but, from his perspective, their sex life had become as predictable as the depressing monthly unemployment figures. But, the light bulb turned on for me when I asked him why he calls their marriage sexless when, in fact, it isn’t. He told me that two of his best male friends had recently gotten divorced from their wives and were living life in the sexual fast lane with all kinds of hedonistic stories to share. My buddy wailed, “I used to be so focused on keeping up with the Jones with my conspicuous consumption. I lost that game. Now, I’m jobless and sexless. I feel like a failure. The only thing I can do well is to drink beer.”
We don’t like to admit it, but our definition of success has an awful lot to do with positional consumption – how we compare ourselves with others. Our national shrink-in-chief Dr. Obama might want to consider the cognitive dissonance he and the Fed are unleashing on the country when they tell us we’re doing better, yet we see the ranks of the unemployed swelling further. While we hear this is a pretty severe recession, many industries (like the one I’m in – hospitality) are clearly having depression-like symptoms. Whether it’s a recession or a depression, it’s leading to the Great Repression. One of the dictionary definitions of “repression” is “the classical defense mechanism that protects you from impulses or ideas that would cause anxiety by preventing them from becoming conscious.” My buddy is doing his best to stay unconscious about his jobless recovery and his sexless marriage and he’s doing it by drinking more. In fact, this summer the Gallup organization reported that alcohol – especially beer – is one of the few consumer products that has held its own in this downturn. As a guy who owns hotels, restaurants, spas, and bars, I can tell you that our bars are the only one of those four types of hospitality businesses that have seen little disruption in their year-over-year revenues.
So, the next time Ben Bernanke tells us that we’re on the road to recovery just know that he’s sending a few more people into recovery in the near future once they realize the beer isn’t solving their confusion of why their personal financial situation isn’t mirroring what they’re hearing on TV.