Economists are fun people. They sit around in their offices of academia and crunch numbers all day. They play and crunch numbers and they come up with extravagant theories about how those numbers fit together and what they mean. Then they get tenure at the university and it takes a crowbar to pry them from their cushy jobs playing and crunching.
But often, all the playing and crunching causes the economists to get confused. They forget that in the real world, those numbers mean more than anecdotal folly. Those numbers often have names and former addresses before they were evicted from their homes.
So sometimes we have to step back and look at the big picture. We have to look at the big picture and assess our priorities and remember why we invented this thing we call “the economy” in the first place.
We invented the thing we call “the economy” for only one reason. So that each of us could have a life. As in make a living. As in having jobs so that we can make a living, have a family, raise and educate our children, and eventually retire with an RV so we can see Yellowstone before we die.
What about profits? Isn’t the point of capitalism so that you can make a profit and grow your business thereby creating jobs.
No. Whether you’re the owner of a hotdog stand or the CEO of GE, the only reason to make a profit is so you can make a living, get a dog, and one day take up fly fishing.
Now the cushy economists have all sorts of measures for how the economy is doing: GDP, PCE, GDPP and CPI. But if you understand that we only invented “the economy” so we could all have a life, then you realize that there’s really only one economic indicator that matters: the percentage of people who have good, living-wage jobs as opposed to those who do not.
So the next time you hear someone saying the economy is coming up roses even though the number of people with good, living-wage jobs continues to decrease, remind them that, unless the economy is helping everyone have a life, it’s really just pushing up daisies.