March 07, 2025

More On Counting Federal Spending As A Full-Value Addition To GDP

March 07, 2025/ Francis Menton

My last post on Tuesday has inspired a spirited debate in the comments about how federal spending should properly be accounted for in GDP. What is the right answer? After reading the comments, it occurs to me that there are several more points to make.
For those criticizing or disagreeing with my post — led by prolific commenter Richard Greene — the main theme has been that many large categories of federal spending make an obvious positive contribution to the economy. Examples given include the Defense Department, teachers/education, and national parks.
Surely excluding those kinds of things entirely from GDP accounting would provide at least as deceptive an indicator of the true size of the economy as including them at full cost value. And if those kinds of things, and many others, are not included at full cost value, what is the alternative? Some flat percentage discount could be applied, but there is no obvious constant level of discount that would be appropriate for all categories of spending; and reasonable people could disagree on varying levels of discount for different categories. Maybe defense should even be included at a premium!
My answer to this critique was at least suggested in the prior post. . . .

March 04, 2025

Is Some Honesty About To Come To Government Economic Statistics?

March 04, 2025/ Francis Menton

A recurring theme at this blog over the years has been the rank dishonesty of many of our government’s economic statistics.
Rather than being neutral indicators of the state of the country and its economy, the most important government statistics have been crafted and manipulated to maximize their usefulness to advocates for increases in the size of government and in government spending. Here is a particularly detailed post on this subject from back in December 2016.
The two main areas of focus here have been the statistics on GDP and on poverty. Both of those come from the Commerce Department.
In the case of GDP, the biggest issue is that government spending on goods and services is counted as a 100-cents-on-the-dollar addition to GDP. That means that the most wasteful spending gives an apparent but false boost to the economy; and even more importantly, that any cut to government spending, no matter how wasteful the spending may have been, gets portrayed as a hit to the economy and a harbinger of recession.
For today, I’ll consider the GDP statistics.

March 01, 2025

March 01, 2025/ Francis Menton

The Greatest Scientific Fraud Of All Time is the fraud by which our government alters existing U.S. and worldwide temperature data in order to enhance an apparent warming trend, and thereby support a narrative of supposedly dangerous global warming.
This is Part XXXIII of this series, which goes back to July 2013. A composite link to all 32 prior posts in this series can be found here.
As has been widely reported and discussed, the arrival of the new Trump 2.0 presidency is bringing disruption and change to many areas of a previously complacent federal bureaucracy.
One of the areas where disruption appears to be hitting is an agency called NOAA — the National Oceanic and Atmospheric Administration, which is a part of the Department of Commerce. NOAA is the place where the world and U.S. temperature data are collected and compiled — and altered.
Will the new disruption shed some light upon the systematic alterations of our temperature data?

February 26, 2025

February 26, 2025/ Francis Menton

As discussed in a couple of recent posts here and here, the so-called Endangerment Finding (EF) was an EPA regulatory action early in the Obama Administration (December 2009) that now provides the foundation for all government efforts to restrict and suppress the use of hydrocarbons in our economy.
In one of his first day Executive Orders (“Unleashing American Energy”), President Trump directed the incoming EPA Administrator to submit, within 30 days, “recommendations to the Director of OMB on the legality and continuing applicability of the Administrator’s findings.” Lee Zeldin was then confirmed and sworn in as EPA Administrator on January 29; but the 30th day after the EO, February 19, passed without any public news about a recommendation on the EF.
Today there is news.

February 23, 2025

February 23, 2025/ Francis Menton

Back at the beginning of the year, I had a post titled “New York On The March To Climate Utopia.” The post took note that everything about New York State’s vision for a zero-emissions economy and for “climate leadership” was in the process of falling apart.
Its contracts for vast off-shore wind farms to replace fossil fuel generation had either been completely canceled (the majority) or rebid at much higher and uneconomic prices (the minority). Its two contracted facilities to produce “green” hydrogen to back up the intermittent wind and solar had run into financial difficulties and were likely to fail. Its one big contracted high-capacity transmission line to bring the imaginary upstate wind and solar electricity to downstate markets had also been canceled, without stated reason but almost certainly because of unworkable economics.
In the few short weeks since that post, you would think that it would be almost impossible for the situation of New York’s utopian climate plans to have gotten any worse. But in fact the situationhasgotten worse — much, much worse.

February 20, 2025

February 20, 2025/ Francis Menton

Since my post a few days ago about the demise of the Eric Adams prosecution, controversy has continued to swirl around the matter.
On the side supporting the action of the Trump/Bondi Justice Department, several new voices have emerged to join what were previously the lonely cries of a handful of people like myself and Josh Blackman. These new voices include James Copland and Rafael Mangual (of the Manhattan Institute), writing in an op-ed in the Wall Street Journal on February 18; and Alan Dershowitz in a column in the New York Post on February 19.
On the other side of the argument, an ex-colleague of mine sends me a copy of an “open letter” dated February 17, and signed by a gigantic list of well over 1000 former federal prosecutors. This letter essentially adopts the arguments set forth in the resignation letter of ex-SDNY US Attorney Danielle Sassoon, including echoing some of her language.
A fair description is that these guys adopt a holier-than-thou attitude, claiming to be wholly pure and above politics and devoted only to the “facts and law.”