When economists use only traditional statistics to paint a picture of the economy, they tend to brush past some of the things that matter to many of us.
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But without those traditional statistics, their picture of the economy could wind up too much of a freehand effort, created without the proper tools to provide precision.
Just ask the Eggerts-Jim and Bob. Both are economists, but they bring widely differing perspectives to their profession, all in the context of an enduring father-son relationship.
Bob Eggert is the traditionalist, and the numbers he produces tend to be accepted by many as the ultimate measure of America’s well-being. Jim helps him out from time to time, but believes his dad’s numbers are just part of the story.
The senior Eggert, 80, is a retired corporate economist who has become famous for his numbers. “Eggert’s Blue Chip Indicators” have taken on the ring of household words among his peers. Each month for the last 16 years, he has gathered forecasts of U.S. economic growth, inflation, interest rates, income and a variety of other statistics from 50 of the nation’s best-known economists.
He uses these numbers to calculate what he calls a consensus forecast, which over the years has been more accurate than that of any single forecaster. Then he puts all the numbers into a newsletter that he pumps out to an attentive audience that includes many of the nation’s top economic policymakers.
Son Jim, 50, is an ecological economist at the University of Wisconsin-Stout in Menomonie, 60 miles east of St. Paul. He has written four books outlining alternative ways of looking at economic progress. His main text, first published in 1975 and dedicated to his father, has sold more than 75,000 copies. His most recent book, “Meadowlark Economics,” is a collection of 15 essays focusing on ways to bridge gaps between traditional economic theory and broader values.
The working title for Jim Eggert’s latest book, which he hopes to publish next year, is “Cosmic Journey: From Quasars to Consciousness, a Celebration of Evolution.”
“That’s a little bit puzzling to me,” quips his dad.
The younger Eggert stresses the limitations of the gross domestic product, which is widely accepted in government, business and media circles as the measure of American prosperity. He views that statistic mostly as a good starting point in understanding what’s really happening.
Jim Eggert’s examples as he elaborates on that view can be compelling. The GDP, he notes, counts virtually all forms of economic activity, often with little regard for the nature or social value of the activity. Hence a best-selling video that degrades women or glorifies violence has equal footing with sales of the Bible or tickets to a Mozart symphony.
He illustrates this blind vision of the economy by citing the success of “Night Trap,” a video game being sold by Sega of America. The game, a play-by-play of an assault on a woman in her bedroom, is a hot seller.
Score one for the gross domestic product.
Then there was the Exxon oil spill, one of the most far-reaching environmental disasters ever recorded. Jim Eggert notes it stimulated more economic activity by churning up business for an endless parade of lawyers, consultants, lobbyists and cleanup crews.
Bingo again for the GDP.
Or consider the security industry. Sales of guns and home-security systems are booming. So are outlays for police forces, guard systems and prisons. People don’t enjoy spending this money, but they do it because they feel a need for more protection against crime.
Ring up yet another triumph for the good old GDP.
“We’ve got to look inward to solve some of our problems, and they’re not going to be solved solely by the GDP rising,” says Jim Eggert. “That doesn’t mean a healthy economy doesn’t solve some problems. It just goes beyond that.”
Jim Eggert thinks his father’s consensus forecasts are extremely valuable tools in understanding the economy.
“We need these statistics,” he says. “Heaven forbid if we didn’t have some of them. We just need to realize their limitations.
“I certainly respect dad for his accuracy, his effort, his organization, his networking, his creation of a knowledge product in the best sense of the word. I’ve got to add the word integrity. When he’s wrong, he says it. He wants people to be better.”
Unlike many people who appear to have deep disagreements, Bob and Jim Eggert don’t talk past each other about such matters.
“I’m rather proud of Jim for taking the strong positions he has on the environment,” says the elder Eggert.
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Bob Eggert agrees with his son that something like the “Night Trap” video does not add value to the country. “It’s not useful output per unit of input,” he says. “It’s harmful.”
That comment hints at a critical tendency of most traditional economists. They can’t agree on what constitutes “useful” output, so they simply count everything.
The Eggerts aren’t in accord on that point, yet they have remained professional colleagues.
“It’s mostly a matter of emphasis,” Bob Eggert says of the differences between their ways of looking at the economy. “I wouldn’t want you to indicate that we’re too far apart on these things.”