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How Sandy Reveals the GDP’s Twisted Logic

By: Daphne Wysham Wednesday November 7, 2012 11:08 am

By John Talberth and Daphne Wysham

Extreme weather doesn’t boost the economy.

Devastation on Staten Island - Good for the Economy?

As he waded knee-deep in an Atlantic City street, pummeled by Superstorm Sandy’s winds, CNN’s Chief Business Correspondent Ali Velshi declared that it was too early to tell whether Sandy would be a plus or a minus for the U.S. economy.

The authorities are starting to tabulate the stupendous toll in Sandy’s wake — in lost lives, homes, businesses, infrastructure, and water pollution. While they crunch numbers, Velshi’s callous viewpoint is flowing naturally from the twisted logic of using the gross domestic product (GDP) as the economy’s most ubiquitous measure of economic well-being. GDP counts everything we spend money on as a plus. So it follows that the $50 billion (and counting) we’ll spend burying the dead, and replacing lost homes and businesses will make us “better off.”

Take University of Maryland Economist Peter Morici. Back when the cleanup estimates stood at $20 billion, he was already predicting that the multiplier effect of that money being spent on post-Sandy construction would yield a positive economic impact of as much as $36 billion. Morici also predicted an additional $10 billion in benefits from replacing hurricane-damaged structures, and another $12 billion in “delayed spending” that will come in once those countless uprooted people get settled again.

Doesn’t your gut tell you that this arithmetic is suspect? Yet we continue to be seduced by what mainstream economists and the media tell us: Whenever the GDP grows, we’re better off. Well, listen to your gut. The GDP doesn’t reflect our well-being. It doesn’t count the things we value most, such as having enough family time or good health. It merely tabulates the cost of things we buy. The GDP is like a giant calorie counter that tabulates how many calories are in that plate of French fries. It doesn’t tell us if we’re better or worse off as a result of eating those greasy fries or an apple.

In fact, so much of what is counted in the GDP are so-called “defensive expenditures” that merely keep us treading water rather than moving forward or getting back to where we were. Consider the not-so-hypothetical act of cleaning up after the latest extreme weather event. No matter how much cleaning up after the storm costs, much of what we’ve lost is irreplaceable. That’s something GDP entirely overlooks.

New Jersey Governor Chris Christie gets this point. That’s why he said: “We will rebuild it…But for those of us who are my age, it won’t be the same…because many of the iconic things that made it what it was are now gone and washed into the ocean.”

Fortunately, great headway has been made on new metrics that are far more sophisticated than GDP. One such metric, the Genuine Progress Indicator (GPI) assesses whether our economy is really growing or not. It takes into account spending that doesn’t make us better off, along with growth or contraction of the amount of built, human, social, and natural capital on which all economic activity ultimately depends.

Maryland Governor Martin O’Malley was the first state leader to implement the GPI. Vermont has embraced this yardstick as well, and the roster of state and international initiatives is growing daily.

The contrast between the two metrics is striking. While GDP has grown significantly over the past 25 years — over 60 percent in our own nation — GPI growth studies in multiple countries all show a similar trend: Genuine progress has stagnated as the negative costs of air and water pollution, lost leisure time, commuting, highway accidents, loss of forests and wetlands, climate disasters, unemployment and underemployment are canceling out gains associated with increased economic activity.

In his last annual economic report, President Barack Obama concluded that the nation must move beyond GDP and develop “new indicators of societal well-being.” Ben Bernanke agrees. In August, the Bush-appointed Fed Chairman called for “better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”

But as long as the GDP remains enshrined as our standard indicator, its twisted logic will continue to affirm that we’re better off with more frequent and deadly disasters like Sandy.

This piece was originally published by Other Words.

Photo by Paul Soulellis under a Creative Commons license on Flickr.

On Not Scaring Ourselves to Death: Moving Beyond the Adrenalin Rush of “Frankenstorm” to Real Energy Independence

By: Daphne Wysham Monday October 29, 2012 1:49 pm

There’s nothing quite like the adrenalin high of a good storm.  It’s like a horror film we can’t stop watching: And this “Frankenstorm,” coming right on Halloween, is giving us the best of the worst of storms.  As the waters rise, the weathercasters feed our high, red circles and arrows signaling danger. We are glued to the set, knowing exactly what comes next: They wade into thigh-deep water; they stand at the ocean’s edge, buffeted by high winds; they shout into the microphone; they take risks we secretly wish we could take. It is as if the whole thing is choreographed, like some archetypal play being enacted before our eyes for the one-thousandth time.

A satellite image of Hurricane Sandy hitting the East Coast

Hurricane Sandy (Photo: NASA Goddard Space Flight Center / Flickr)

Just as we have come to expect this adrenalin rush from our weather-men and -women, so too, it seems, we have come to expect the testosterone surge from the endless parade of men (and they are largely men): mayors, governors, presidents, military leaders, all looking manly, in control, surrounded by more men, looking on, somberly, from behind. What they say is less important (we already know the advice, but, like children, must be told again and again: “Things are bad;” “Don’t take any risks;” “Stay off the roads”) than how they say it, and what the optics are: Does he look presidential? Is he a man in charge? How calm does he sound in the face of catastrophe? We need that “father figure,” it seems, when times are tough. And our media and our politicians willingly oblige.

We are so good at this, in America, so good at responding to the crisis. We cheer on our National Guard, our Coast Guard, our everyday heroes, and then, when the danger has passed, when the tide recedes, we congratulate ourselves and them by digging deep into our pockets and sending money to the Red Cross and the homeless shelters, saluting our men and women in uniform, as though this, and this alone, were the price of admission.

And yet…we are fooling ourselves, again and again, just as our children do every Halloween. This Frankenstorm, can we stop fooling ourselves? Our planet desperately needs us to act like adults and get beyond the adrenalin rush of responding to one storm after another, as though each one were a unique shock, and not related to an overall climate crisis of enormous proportions. We need our political leaders and weather-casters to end the silence on climate change, to tell us the truth: That these storms will only grow more intense as our oceans warm and the Arctic melts. And we need to start to think long-term, to start claiming responsibility and not blame Mother Nature for our plight. Climate change is upon us, folks, and if this is what a 1 Degree Celsius rise looks like, imagine what a 2, 3, or 4 degree rise looks like.

For leadership, we may have to look beyond our borders, to the Danes or the Germans: They have taken their blinders off, looked around, taken stock of who owns most of the oil and gas in the world, carefully reviewed what Japan is suffering in the wake of Fukushima’s multiple nuclear meltdowns, and both countries have made a firm commitment to going both fossil-fuel-free and nuclear-free. These countries are committed to true energy independence–not the short-lived kind that results from trading one poisonous addiction for another. It is a long slog. Their path does not involve instant gratification nor feel-good heroics. It involves tinkering with different policies–such as Germany’s feed-in tariff and Denmark’s multi-decadal experimentation with wind. It involves committing hundreds of billions of dollars to solving a problem that will ultimately save these countries and their people hundreds of billions of dollars, while saving millions of lives around the world. There are few heroes in these national dramas. There are plenty of ordinary people, including women, thinking of their children, their grandchildren, and of children on the other side of the planet, understanding that the energy commitments we make today affect the “Frankenstorms” our children will suffer tomorrow.

Can we grow up and out of scaring ourselves to death? Can we move into a long-term push toward the kind of energy future that will not bring real terror to millions around the world? Or will we just put on the costume of Superman and pretend we have saved Gotham City, yet again, while Frankenstorm 2.0 waits around the corner?

The Six Stages of Climate Grief

By: Daphne Wysham Monday September 3, 2012 9:23 am

Drought 2012 (photo: Crane Station / flickr)

Now that the hottest summer on record is drawing to a close, are we any closer to admitting that climate change is upon us? If not, why not?

It might have something to do with the five stages of grief. Elisabeth Kubler-Ross identified these stages as denial, then anger, followed by bargaining, depression, and acceptance. With record drought killing our cattle and our corn, West Nile virus sweeping the country, and Arctic ice sheets melting away, it’s no surprise that millions of people are responding to these frightening signs of environmental decline in stages.

Nobel Laureate Steve W. Running first proposed this frame for understanding the popular response to climate change in 2007. I’d like to go one step further and suggest a sixth stage: The Work.

Denial, the first stage of grief, can be quite comfortable. The U.S. media is in many ways co-dependent with the denialist camp. It rarely connects the dots between extreme weather events and climate change, making it easy to remain blissfully ignorant. Our politicians are also prolonging this denial stage by rarely uttering the term “climate change,” as though the words themselves were obscene.

The second stage — anger — sums up the likes of Sean Hannity and Rush Limbaugh. These talk show hosts are at their most vitriolic when they attack climate scientists or advocates of fossil fuel alternatives. Their ferocity gives license to the crazies who issue death threats against climate scientists: they would rather shoot the messenger than listen to the message.

The next stage, bargaining, comes when the deniers begin to acknowledge that global temperatures are indeed rising, but claim it’s due to natural causes. Or they take a stance like ExxonMobil CEO Rex Tillerson’s — admitting climate change is a major, man-made problem, but claiming that the answer is to “adapt” to it instead of changing our behavior.

Depression is a familiar state to me and my fellow climate change activists. If the truth will set you free, the truth about climate change may set you free to take anti-depressants for the rest of your life. Every weather abnormality comes with a sense of dread. It’s at this point that we lose people. Denial starts to look attractive.

Acceptance is the hardest stage, because what experts tell us lies ahead is so damn scary, it will make you want to hop into Rush Limbaugh’s lap and stay there: We are surpassing all of scientists’ worst-case scenarios by a long shot — we are now on track to an 11-degree Fahrenheit rise by the end of the century, according to the International Energy Agency. We’ve broken over 4,000 temperature records in the United States just this year, and scientists tell us record droughts, floods, storms, and forest fires all may become “the new normal.”

We must accept this dreadful prognosis if we are to act appropriately.

But acceptance does not mean that all is lost.

After years of working through these stages, I’ve discovered a new sixth stage: doing The Work. This means taking courage from each other as we look this monster in the eye and fight side-by-side in the battle of a lifetime. Systemic change — not just light-bulb change — is what’s required now. This must include everything from replacing the GDP as an outdated measure of progress to getting schools to teach climate science and arm the next generation with the facts.

Together, we can get a glimpse, beyond despair, of a world of transformation and rebirth that is possible if we’re courageous enough to fight for it. After all, our planet will eventually restore itself to a state of equilibrium — we just have to make sure humankind is around to witness it.

 

This op-ed was originally published by Other Words.

Greenhouse Gas Emissions are Down to Record Lows in the U.S… Or are they?

By: Daphne Wysham Friday August 17, 2012 12:06 pm

First the good news: According to government sources, U.S. greenhouse gas emissions have dropped to a 20-year low. Recent data released by the Energy Information Administration suggests that U.S. energy-related greenhouse gas emissions–roughly 98% of all U.S. greenhouse gas emissions–have dropped from a high of 6 billion tons in 2007 to roughly 5.2 billion tons today. This decline in emissions constitutes a drop of 14% below 2005 levels–very close to the target of 17% below 2005 levels set by the Obama Administration at climate negotiations in Copenhagen, Denmark, in 2009.  However, instead of reaching that goal by 2020, the U.S. is close to reaching it today, virtually without effort.

Government and industry officials are quick to attribute the drop in emissions to a corollary drop in the price of natural gas. This, they claim,  has encouraged a rapid switch from coal to gas at power plants in the U.S.

If  true, it would be ironic that the U.S., the number one naysayer at climate talks  is actually the one country to have reduced overall emissions more than any other nation.

But hang on a minute. Just how accurate is our assessment of the climate impact of the extraction and combustion of natural gas? This is a critical question, since the switch to gas is apparently the primary reason for a decline in U.S. emissions. It turns out when it comes to assessing the climate impact of fracking, there are a lot of unknowns. According to a recent Cornell study, the process of hydraulic fracturing for natural gas–or “fracking”–may be worse than coal, from a climate perspective.  The reason: Roughly 4-8% of methane leaks over the lifetime of a fracked well. Methane is roughly 22% more potent than CO2 as a global warming agent, if compared on a 100-year timeline. However, on a shorter time frame, which is actually more appropriate, Cornell study author and Professor Robert Howarth argues, given that methane attenuates and breaks down over 20 years, methane is even more potent. Depending on whether one assesses methane’s potency on a 100-year time span or on a 20-year time span,  its climate impact can actually by 33 times and as much as 100 times more potent than CO2.

If Howarth is correct, all of the fracking that has replaced the coal–which used to supply us with roughly 50% of our energy needs, and now supplies us with roughly 34%–a 16% increase, could mean we are back to where we were before switching to coal from a climate perspective. Or, sadly, we could be far worse off. Clearly, more study is needed.

Nevertheless, let’s assume the EIA numbers are accurate, and we have indeed reduced overall emissions back down to 1992 levels in a matter of 5 years. What does this tell us? The good news: It suggests we can make system changes quickly and seamlessly, if the incentives are correct.

In this case, the incentive was financial, which is one reason  placing a price on carbon at the wellhead would both discourage a return to coal burning should the price of gas rise back above the price of coal any time soon. And, done well, it would also make renewable energy like wind more cost-competitive with gas and coal for electricity.

A price on carbon could also be used to ensure that coal that is now being subsidized by the U.S. taxpayer for profitable export by Peabody Coal and others to China and India from Appalachia’s flattened mountains and Wyoming’s Powder River Basin has a price tag that returns some of the wealth back to the American people, while making it more expensive for other countries to burn it as well. After all, we will only come out ahead, climate-wise, if we can discourage other fossil fuels from being consumed elsewhere, too. A carbon tax does not have to be regressive; it could come with a monthly dividend, just like social security, to ensure only the over-consumers paid more.

Until a tax on carbon comes online, if we are to address true climate and energy security, we need a continued subsidy or, better yet, a national feed-in tariff for renewable energy, similar to that being deployed successfully in Germany and other countries, to encourage the widespread investment in and proliferation of renewable energy systems.

In the immediate future, we need to make sure the climate impact of fracking is fully accounted for, environmental laws are upheld and all of the externalized costs that are now borne by communities near fracking wells and coal mines are borne instead by the companies. Cheap energy should not be delivered to us at the cost of our health or the health and wellbeing of future generations.

 

One Reason Behind India’s Blackout: World Bank Policies and Neoliberalism

By: Daphne Wysham Wednesday August 1, 2012 12:14 pm

One-tenth of the planet’s people—one-half of India’s population– lost power completely this week, with a blackout covering most of north India’s highly populated states. What was the reason for the blackout?

Young workers by a train climb in a massive pile of coal.

Indian coalworkers by a coal train (Photo: nicksarebi / Flickr)

While pundits and politicians postulate on the reasons for the power failure, one answer is clear: an ideology of neoliberalism foisted on India by the World Bank and IMF was partly to blame for the blackout.

It is not the only cause. Climate change has clearly played a role in India’s blackout: A delayed monsoon season meant lower water reservoirs and higher rates of  water siphoning  for agricultural purposes rather than power production. This could have been foreseen by the Bank back in the 1990s when climate change was clearly viewed as a problem to be dealt with. Nevertheless, the Bank pushed large hydropower projects in India, ramping up debt, while resettling millions from fertile land near riverbanks.

Meanwhile, India’s biggest and dirtiest source of power, coal, providing over 70% of the country’s power, is increasingly hard to come by. This, too, was something the Bank could have foreseen; yet instead it pushed coal power dependency aggressively in India. There is less and less land available for open-pit mining, deemed more “efficient” than underground mines by the World Bank. The reason for its “efficiency”?  Underground miners were once one of India’s most powerful unionized labor forces. While their jobs were dangerous and dirty, they provided a decent living, and their underground mining prevented the widespread environmental and social destruction that open-pit mines ushered in. At World Bank’s behest, however, open-pit mines replaced thousands of underground mines, and miner’s unions were busted and replaced with a handful of workers driving large dump trucks. Efficiency gains may have been achieved, but at what cost?

Open-pit mines are literally hell-holes. They smolder in a constant state of combustion. They ravage the landscape, and cause acid drainage, which kills fish and makes the water unsafe for drinking or bathing. As with large dams, thousands of India’s poorest tribal people have been uprooted to make way for open-pit mines and placed in resettlement camps where prostitution and alcoholism are endemic. The World Bank once claimed they would provide an acre of  land for every acre taken from the most marginalized tribal peoples to make way for mines and dams. But that promise was long ago watered down, then forgotten. Ironically, many of the tribals remain without power to this day. The poorest of the poor the Bank claims to serve got the shortest end of the stick.

Add to that the fact that India’s coal is heavy in ash content, and population pressures on available land  means ash disposal is also a problem. So, often, the polluting ash—with heavy metals and radioactive elements—is merely dumped in the already polluted rivers.

As India runs out of space for open-pit mines and ash disposal, it’s increasingly turning to coal from abroad—which comes with lower ash content but at a higher price.  All of this could have been foreseen by the World Bank and IMF back in the mid-1990s. They were urged by NGOs such as ours to move toward solar, wind and other renewable energies in India—both in the interest of providing power to rural areas more cheaply and averting a climate disaster. And they were even urged by their own hand-picked “eminent person,” Emil Salim, a former board member of one of Indonesia’s largest coal companies, who headed up their 3-year Extractive Industries Review, to get out of coal completely by 2008. The reason? The poor were “worse off,” not better off, Salim determined, as a result of the World Bank investments in coal. Nevertheless, the Bank continued to provide billions to one of the most polluting of fossil fuels, while ignoring its climate impact.

Corruption certainly has played a role in India’s power failures for decades. At every step in the supply chain, money is siphoned off, resulting in a shoddy system– from backup systems to warning systems to good cables. Currently, good cables intended for transmission get sold and shoddy materials put in their place.

Electricity theft is also part of the problem, but simply identifying the problem as “theft”—as many do—rather than recognizing that people deserve access to electricity, minimizes the social and economic reasons that drive people to frustration to the point where they feel they have a right to steal power from the grid. Despite massive loans, debt, and the poorest paying for the power with their land or their lives, one-third of India’s households do not have enough electricity to power a light bulb, according to last year’s census. And so they steal it. And in stealing it, they increase energy inefficiency, by often grounding the wire they have hooked up illegally to the grid in the soil, thereby losing more power.

Ironically, one region that did well during the power crisis in India was Jodhpur, where, after a brief interruption, the windmills  kept hospitals and households powered up while the rest of the country went black. Were the World Bank to have pushed a model, such as that successfully employed in Germany and other countries, where a “feed-in tariff”—a guaranteed rate of payment for energy fed into the national grid– for renewable energy had been put in place, small farmers and others in rural areas would be able to both provide power to the grid and earn money in doing so. But instead, they foisted on the largest democracy a neoliberal model—where unions were busted, power was privatized, people were treated like pawns on a giant chess board, while they targeted the affluent and heavy industries first for energy delivery using some of the most environmentally destructive energy resources on the planet. The assumption: energy services would eventually trickle down to the poor. Nearly two decades later, after billions in investment, one-tenth of the world sits in the dark, the planet is rapidly heating up, and the only thing trickling down to the poor is contaminated water or, if they’re lucky, enough water to keep their parched crops alive.

 

A Perfect and Hot Storm: It’s time to save ourselves from a climate nightmare of our own making.

By: Daphne Wysham Monday July 9, 2012 10:21 am

It was the stuff of nightmares: I was driving home down Route 66 when I first saw the wind, blowing debris horizontally in front of me at up to 80 miles an hour.  Then lightning began forking all around. The night sky was ablaze. Large trees sprawled across several lanes of traffic. The rain pelted down so hard I couldn’t see further than a couple hundred feet.

Photo: A Derecho Afternoon in Indiana (NASA Goddard Space Flight Center / Flickr)

“If you’re going through hell,” the Rodney Atkins country song goes, “Keep on going … You might get out before the devil even knows you’re there.”

If I kept going, I reasoned, I would get through the storm faster — it was coming from the west, where I was headed. I later recognized my dumb luck. I had taken an extraordinary chance by driving on. At least 13 other less fortunate people are dead because of this storm. I merely came home to a house without power.

My luck continued. I had power the next day, but hundreds of thousands of others outside Washington, D.C., went without power for more than a week in the worst heat wave we’ve had in years. In the nation’s capital, cell towers and other facilities that motor our smart phones and Internet connections were knocked out, choking off the wonders of modern communications. Drinking water was being rationed in some areas.

This storm, a rare kind technically called a “derecho,” ripped through a large swathe of the Midwest and mid-Atlantic region. We may have to get used to this kind of thing.

This scorching summer is “what global warming looks like,” as a scientist quoted by the Associated Press plainly stated. As an expert on climate change, I agree. So, what’s our response? Now that it’s in the rear-view mirror, what have we learned from this storm?

We need to move beyond naming the crisis we are living through. Just as I had to confront my own reckless decision to drive through that vicious storm, all of us must begin accepting the huge and long-term costs of continuing with business as usual.

Economists now know with increasing precision exactly how much climate disasters are costing us. Conservative estimates put it on the order of $25 per ton of carbon emitted, reflecting lost agricultural productivity, storm damage, health impacts, and water shortages.

That’s nearly $250 billion in damages each year. We could start to cover this cost now by scrapping fossil fuel subsidies, which cost Uncle Sam up to $52 billion per year.

Solar and wind power may seem like pricey alternatives to you, versus energy derived from coal, nuclear reactors, oil, and gas. But they also don’t enjoy the same hefty subsidies. People, governments, and companies are spending countless dollars adjusting to the costs of a crisis of our own making. It’s a big gamble. In the best-case scenario, we may just throw out a refrigerator’s worth of spoiled food or spend a night or two in a hotel. In the worst-case scenario, the Earth will become uninhabitable.

Is it really more expensive to switch to greener power sources and drive less? When you add up all the costs of doing otherwise — no way. By investing in cleaner energy sources now, we can save the lives of countless innocent victims — perhaps even those we love the most — from storms that should only appear in our nightmares.

 Daphne Wysham commutes once a week to the Institute for Policy Studies in Washington, DC, in a car that gets more than 50 miles per gallon. www.ips-dc.org
Originally posted via OtherWords (OtherWords.org)

Coal Smoke and Planetary Fever: As the climate changes, a deadly disease is on the rise.

By: Daphne Wysham Tuesday February 21, 2012 12:27 pm

I recently returned to my childhood home in India with my siblings for a final walk down memory lane with my elderly mother. As expected, it was a powerfully emotional experience. But in ways unexpected, it brought home to me how our planetary fever — climate change — is inflicting a deadly fever on those least to blame for it.

The author with her sister and Parveen.

The author with her sister and Parveen.

One of our destinations on this trip was the city of Ludhiana, which houses one of the best medical schools in India, Christian Medical College. My father taught and practiced medicine there for many years. Ludhiana is in the Punjab on the border with Pakistan, and is one of India’s industrial and agricultural powerhouses.

Some of my earliest childhood memories include my father pushing me on our backyard swing, my nightgown billowing in the warm evening air. I remember him pushing me so high so I could see the flickering oil lamps in neighboring houses. I remember the pungent smell of the dung fires cooking the evening meals in hundreds of homes. The meow of wild peacocks in the fields behind our house, the flocks of chattering parakeets, the evening arguments of crows, the morning dove’s coos on hot summer days. I remember bougainvillea blossoms cascading around our porch in the sunlight, and carrots so fresh from the garden they were like candy. Most fondly, I remember the love of my Indian “ayah,” or nanny. Parveen, only 14 years my senior, helped my parents raise me.

As we stepped off the train from nearby Delhi, we hoped to relive many of these memories. But instead the sky was a gray pall, and the black dust of diesel and coal-fired power emissions coated our nostrils. No amount of filtering the air through our scarves could prevent us from coughing.

Ludhiana is now the fourth-most polluted city in the world, according to the World Health Organization. The water, too, has become contaminated by pesticides, heavy dyes, and other chemicals dumped by industry and leaching into the water table.

The World Bank ranked Ludhiana No. 1 in India in 2009 for creating a friendly business environment. We saw evidence of this at our hotel: foreign businessmen meeting in the lobby, negotiating business deals on couches and in corners, hovering over laptops. Well-heeled Indian women idled away the hours eating expensive lunches in the hotel’s restaurant, trading gossip and playing bingo.

This once relatively small industrial town has become a magnet for global markets — car parts for Mercedes Benz, BMW, and other automakers are produced here, as well as a good share of Asia’s bicycles and many other heavy industrial goods. Much, if not all, of that manufacturing is powered by coal.

Ditching GDP for a “Genuine Progress Indicator”?

By: Daphne Wysham Thursday November 3, 2011 6:23 am
Synchronism Indicator! (Photo: mbiddulph, flickr)

Synchronism Indicator! (Photo: mbiddulph, flickr)

Tent cities and shacks sprung up on empty lots across the country. Food lines at soup kitchens wrapped around city blocks. Unemployment soared to 25 percent. Farmers watched helplessly as crop prices plummeted, then lost their land. The evidence was clear, yet at the height of the Great Depression, Congress lacked the tools to accurately measure just how the economy as a whole was faring. With no commonly accepted national income data, they had no guideposts upon which to base sound economic policy.

And so Congress turned to a young and promising Russian-American economist. U.S. lawmakers asked Professor Simon Kuznets of the National Bureau of Economic Research, who would go on to win the Nobel Prize in economics, to develop a data set to assess the state of the national economy. In 1937, Kuznets presented a vast volume of data on income to Congress. It became the Gross National Product (GNP).

With remarkable foresight and humility, Kuznets warned that his newly minted GNP shouldn’t be used as an instrument of social policy. It could never adequately measure the things we value, he said, such as housework or caring for elderly parents. Nor, he warned, could the GNP distinguish between the growth of good and bad jobs. The data would be the same if workers earned their pay from employers who endangered their lives or guarded their health and safety. “Goals for more growth should be more growth of what and for what,” Kuznets said.

Alas, Kuznets’ warnings on the GNP — later renamed the Gross Domestic Product (GDP) — went unheeded. Instead, the GDP became the barometer of health not only for the U.S. economy, but for the entire global economy.