front2

Testimony of Jonathan Rowe
Co-director of the West Marin Commons
Before the U.S. Senate Committee on Commerce, Science and Transportation
Subcommittee on Interstate Commerce, Trade and Tourism
March 12, 2008

Mr. Chairman and Members of the Committee:

Let’s suppose that the head of a federal agency came before this committee and reported with pride that agency employees had burned 10% more calories in the workplace than they did the year before. Not only that – they had spent 10% more money too.

I have a feeling you would want to know more. What were these employees doing when they burnt those calories? What did they spend that money on? Most important, what were the results? Expenditure is a means not an end; and to assess the health of an agency, or system, or whatever, you need to know what it has accomplished, not just how much motion it has generated and money it has spent. . The point seems obvious. Yet Congress does this very thing every day, and usually many times a day, when it talks about this thing called “the economy.” The administration and the media do it too. Every time you say that the “economy” is up, or that you want to “stimulate” it, or get it going again, or whatever words you use, this is what you actually are saying. You are urging more expenditure and motion without regard to what that expenditure is and what it might accomplish – and without regard to what it might crowd out or displace in the process.

More

Throughout the tumult of the elections last year political commentators were perplexed by a stubborn fact. The economy was performing splendidly, at least according to the standard measurements. Productivity and employment were up; inflation was under control. The World Economic Forum, in Switzerland, declared that the United States had regained its position as the most competitive economy on earth, after years of Japanese dominance.

The Clinton Administration waited expectantly, but the applause never came. Voters didn’t feel better, even though economists said they should. The economy as economists define it was booming, but the individuals who compose it–or a great many of them, at least–were not. President Bill Clinton actually sent his economic advisers on the road to persuade Americans that their experience was wrong and the indicators were right.

More