In talking about the fact that Manufacturing as a percentage of GDP O'Brien notes that manufacturing has dropped from being over 25% of GDP to just under 13% of GDP since 1947. He notes that in the same time frame the financial sector went from around 10% to around 20%. He even includes a nice graph.
I don't know if O'Brien added the text to the graph, but if he did he is deliberately being misleading (and if he didn't he wasn't studious enough to review the graphic before using it.)
Here are a few problems, first what they call "Financial Sector" in the large text is actually listed in the legend of the graph as "Finance, insurance, real estate, rental, and leasing. It is FAR MORE than just the finance department. Also, the text at the bottom says "Most sectors stayed nearly the same" and this is a total lie. The problem with this graph is that it places a lot of lines at the bottom close together and while some of the lines do remain close to the same there are other lines that grow almost as much as the "Finance" line, namely Professional and Business Services and Educational services, Healthcare, and Social Assistance. And at the same time you also notice large decreases in agriculture and mining.
In fact - when you clear up the "noise" the graph looks completely different.
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Why does someone do things like this? Because they can't make their argument without misleading people. Yes, far less of our GDP is made in manufacturing, but it still accounts for the third highest part of our economy. In fact, this chart had to lump Finance, Insurance, Real Estate, Rental, and Leasing all together in order to make it appear to contribute more to the economy. If O'Brien wants to make the case that we need to refocus our economy or that we should distrust Wall Street that is fine, but by using this graphic his intent is now to mislead people - and that is unforgivable.
You are actually incorrect, as are your accusations that I was doing anything other than accurately pointing out the facts that show that our economy has been horribly mismanaged by Wall Street and the politicians in Washington DC who have done their bidding - to the detriment of the vast majority of the American people.
ReplyDeleteEven though the shortened title of the sector is "financial" (rather than a sentence long title), in my blog post, I clearly represented the sector as including, but not entirely, financial services. So you are incorrect in that accusation.
The fact is my point is very clear, as I wrote, "In other words, moving money and ownership around became a bigger part of the size of our economy than actually making things." That sector is, in fact, about moving money and ownership around, and it is, in fact, a big problem for our economy that that sector is now larger than the manufacturing sector, by a lot.
And this clearly shows that the point of my blog post - that the loss of our manufacturing sector to a paper economy is the cause of our current economic troubles - is true.
Those are the facts and, despite the unfortunate distortion and vitriol of your blog post, the sooner the policy-makers of our nation start acting on this truth, the sooner our country will be back on the right track economically.
My complaint was not with your argument. My complaint was with your use of a misleading graph to emphasize your argument. If your argument is valid on its own you don't need a misleading graphic. The use of the graphic would seem to indicate that either you were negligent in your oversight and put up a poorly constructed graphic or that you didn't care that it was misleading and were complicit in spreading the misinformation.
ReplyDeleteAlso, why do you just target the Financial Sector? Professional and business services showed an increase of around 9%, Educational Services, Healthcare and Socials services went up around 5%. Are these sectors also the cause of the current financial crisis? Also, in the first part of your blog post you blast Wall Street people for saying "Home ownership is not for everyone." Well, real-estate is part of the Finance sector that you are blaming for the economic meltdown, so aren't you indeed agreeing with them?
Frankly I think any attempt to try to pin our current economic situation on one cause or industry is naive at best. While you could argue that manufacturing is needed to build an economy how do you explain India's rise in the world economy when over 50% of their GDP was in the services sector?
But I digress from the flaws in your argument. If you wish to make the argument that we need to change the economic focus that is fine. But to use a sloppy and deceptive graphic to defend your argument is insulting to anyone who actually takes the time to really understand the graph.
Oh, as a side note, I find it amusing that you'd read my comment on your blog and come here and post on my blog but not allow my comment to be published on your site. I'm sure it was just an unintentional oversight.
ReplyDeleteThe loss of American Jobs to other countries is plain and simple, The Union. The American Union was established to protect workers at the turn of the century and mainly to protect women and children who were subject to long hours and un-safe working conditions. Today, The Union stands in the way of creating a profitable enviroment for creative, forward thinking, investors, to make money here in America. And, my goodness why should someone investing their own money make a gain on their investment for taking the risk the average person would shy away from? It takes risk and it takes a person with the captitol to put forward the funds to make anything and employ anyone.
ReplyDeleteAfter more than a century The Union is a machine that controls our government, our ability to grow as a nation and most importantly they control our politicians. In our two party government system it is certain that both the republican and democratic parties have been positioned by The Union. However, political positioning by The Union dwells heavily within the democratic party. The two wash each other's hands like well buttered bread.
We are suffocating as a nation at the hands of The Union and The Democratic Party.