Monday, August 16, 2010

Thinking in a blizzard.

The news seems to be everywhere. China's economy--measured at $1.33 trillion has surpassed Japan's at $1.28 trillion to become the second largest in the world. So naturally everyone and his cousin starts spouting, thanks to China's rapid growth, that it's only a matter of time until China's economy passes that of the United States.

Let's put this in perspective. China's GNP is $1.33 trillion. The US's is more than 10 times that at $14 trillion.

And China has roughly five times as many people as the US. Which means that per capita, the US is 50 times as productive as China.

Of course, our national mood is today very negative. So no one investigates the data. They instead jump to conclusions.

No one thinks. We prefer to blurt.

It's so much easier.


Anonymous said...

shurely shome mishtake...?

I believe trillion would be more appropriate.

george tannenbaum said...

Oops. A million thanks, Anon.

Anonymous said...

One rather significant correction: The $1.33 trillion reported for China's economy reflects GDP for the second quarter of 2010. The US's $14 trillion GDP is for all of 2009. Annualize China's GDP using the second quarter as a baseline and you get $5.32 trillion for the year. Yes, it's still a good deal smaller than the US GDP (about 38% of its size), yet substantially larger than you suggest. But hey, what are a few trillion dollars among friends?
All that being said, sloppy presentation of the information in the original New York Times report made this error much more likely. Comparing numbers that have not been standardized for comparison is amateurish. Shame on the NYT editorial staff.

george tannenbaum said...

Thanks, Anon, for the clarification. My point was less about our economy and more about muddled thinking based on spasms of news bits and fads.

Anonymous said...

of course the US economy is propped up by Chinese buying tons of bad US paper which you overlook