Q4 2023 GDP, 50 States & DC

[Crawford]

I'm not sure a digital camera is a great proxy for relative buying power. Or, in 2024, even picture-taking proclivities. An iPhone 15 likely has satisfactory photo capabilities for most non-professional photo enthusiasts.

And I don't object to basket-of-goods type comparables. But it's inherently messier than just comparing nominal output. Arguing about bread costs in Mongolia vs. Bolivia seems sillier than just nominal snapshots.

[Yuri]

Originally Posted by iheartthed

Are you saying that garbage men in NYC live a higher standard relative to NYC than garbage men in São Paulo do in their own city? I strongly suspect that's not true, and possibly the opposite.

No. He's actually saying that garbage men in New York are richer than millionaires in São Paulo.

[SIGSEGV]

I can compare to my colleagues in Belgium, the Netherlands, Germany, Sweden and Spain, who mostly nominally make significantly less money than I do but somehow can afford to take much nicer vacations and have nicer things (since so much of my income is evaporated into healthcare, childcare, retirement savings, higher living expenses, etc.).

edit: and also, I want to point out that GDP includes things in the US that are not included in many other countries, like healthcare profits, which are not a thing in many places.

[SIGSEGV]

Originally Posted by Crawford

I'm not sure a digital camera is a great proxy for relative buying power. Or, in 2024, even picture-taking proclivities. An iPhone 15 likely has satisfactory photo capabilities for most non-professional photo enthusiasts.

And I don't object to basket-of-goods type comparables. But it's inherently messier than just comparing nominal output. Arguing about bread costs in Mongolia vs. Bolivia seems sillier than just nominal snapshots.

It's a proxy for disposable income for hobbies, even more so that smartphones can replace entry-level point and shoot cameras. Unless somehow we think there are way more professional photographers in other countries than the US... (maybe that's true, I don't know).

[Crawford]

Originally Posted by iheartthed

Are you saying that garbage men in NYC live a higher standard relative to NYC than garbage men in São Paulo do in their own city? I strongly suspect that's not true, and possibly the opposite.

Oh, most definitely. A sanitation worker will likely have a decent-sized house & yard on the South Shore of LI, a pair of SUVs, and quite often a boat or other toys. His kids will play youth sports, go to Kalahari waterparks on weekends, and eventually attend SUNY schools.

When my dad gets his SUV rental on his Germany trips (the same vehicle he drives in Michigan- the GLE 350), my relatives joke that he's a Russian gangster, as no one in Germany drives these things. It's actually embarrassing. You'll see 100 Skodas or Dacias before you see a U.S.-sized SUV.

[SIGSEGV]

Originally Posted by Crawford

Oh, most definitely. A sanitation worker will likely have a decent-sized house & yard on the South Shore of LI, a pair of SUVs, and quite often a boat or other toys. His kids will play youth sports, go to Kalahari waterparks on weekends, and eventually attend SUNY schools.

When my dad gets his SUV rental on his Germany trips (the same vehicle he drives in Michigan- the GLE 350), my relatives joke that he's a Russian gangster, as no one in Germany drives these things. It's actually embarrassing. You'll see 100 Skodas or Dacias before you see a U.S.-sized SUV.

All you're succeeding in arguing is that Americans are more wasteful... Give me a Skoda or Dacia before any oversize SUV tank on wheels.

[Yuri]

Originally Posted by SIGSEGV

I can compare to my colleagues in Belgium, the Netherlands, Germany, Sweden and Spain, who mostly nominally make significantly less money than I do but somehow can afford to take much nicer vacations and have nicer things (since so much of my income is evaporated into healthcare, childcare, retirement savings, higher living expenses, etc.).

edit: and also, I want to point out that GDP includes things in the US that are not included in many other countries, like healthcare profits, which are not a thing in many places.

Apparenly he believes only things Americans care (big cars, ugly, cheap-looking big houses on the middle of nowhere) are the only signs of wealth that matter.

Go abroad every year or buy a nice camera or go to fancy restaurants all that doesn't matter. They're poor because they don't (and don't want to) drive a 5 ton car.

[Crawford]

Originally Posted by SIGSEGV

All you're succeeding in arguing is that Americans are more wasteful... Give me a Skoda or Dacia before any oversize SUV tank on wheels.

I agree, but this is a cultural/lifestyle observation, not an economic one. A European might prefer a Skoda but that's also the economically prudent choice.

[iheartthed]

Originally Posted by Crawford

Oh, most definitely. A sanitation worker will likely have a decent-sized house & yard on the South Shore of LI, a pair of SUVs, and quite often a boat or other toys. His kids will play youth sports, go to Kalahari waterparks on weekends, and eventually attend SUNY schools.

When my dad gets his SUV rental on his Germany trips (the same vehicle he drives in Michigan- the GLE 350), my relatives joke that he's a Russian gangster, as no one in Germany drives these things. It's actually embarrassing. You'll see 100 Skodas or Dacias before you see a U.S.-sized SUV.

Those are cultural and/or values based choices, though. Not really something that proves one place is more affluent than another. Also South American countries slap massive import taxes on foreign built cars that can drive up the price tag for them to roughly 2x what it would cost for the same car in the United States or Europe. So it's actually cheaper to buy a GLE in the United States than it is in South America. It's also cheaper to buy iPhones, laptops, TVs, etc. But yeah, if you see someone driving a GLE in Brazil, they are probably much more affluent than a person driving the same car in the United States.

I think a sanitation worker will be of the same class in both cities. Brazil has a pretty long history of organized labor that protects heavy labor and public class workers.

[Nouvellecosse]

I don't think the two arguments are incompatible. Yes having more money is no guarantee of a high quality life. There are other types of wealth and value. But people who have more money are by definition wealthier monetarily. If someone chooses to, say, work a job that require a long commute and huge amounts of overtime their life may not be better than someone who values a work-life balance. That's a perfectly fair thing to say, but the person who prioritizes making as much money as possible will tend to have more money.

If you want to compare things like quality of life, life satisfaction, or social function you can look at happiness surveys, HDI stats (which includes GDP), crime and inequality figures, social mobility and trust etc. Lots of different options. But if you want to compare monetary wealth you would look at GDP percapita, mean/median incomes, household net wealth, etc. As with any stat you just have to remember what they do and don't mean. and avoid imputing inappropriate meaning.

[MolsonExport]

Maybe part of the apparent discrepancy is, as some have insinuated, that in Europe/Canada, things that many people would have to pay out of pocket for are largely covered by the welfare state (healthcare, by and large, dentalcare for many) and where publicly-funded quality alternatives are widespread, rather than hit-or-miss like in much of the USA (public schooling, transit). For example, in most of Canada's big cities, you can get by without a car (and many do). Can the same be said of most American big cities, aside from the very biggest, like NYC and Chicago?

[iheartthed]

Originally Posted by Nouvellecosse

I don't think the two arguments are incompatible. Yes having more money is no guarantee of a high quality life. There are other types of wealth and value. But people who have more money are by definition wealthier monetarily. If someone chooses to, say, work a job that require a long commute and huge amounts of overtime their life may not be better than someone who values a work-life balance. That's a perfectly fair thing to say, but the person who prioritizes making as much money as possible will tend to have more money.

If you want to compare things like quality of life, life satisfaction, or social function you can look at happiness surveys, HDI stats (which includes GDP), crime and inequality figures, social mobility and trust etc. Lots of different options. But if you want to compare monetary wealth you would look at GDP percapita, mean/median incomes, household net wealth, etc. As with any stat you just have to remember what they do and don't mean. and avoid imputing inappropriate meaning.

The problem I have with cross border comparisons of wealth based on incomes in local currency is that it only matters when these two people come into contact with each other. The means of comparison (exchange rate) is also extremely volatile. Ten years ago, if I traveled to Europe I would have to pay much closer attention to what I spent than I do now because the euro was trading at like a 20-25% premium to the US dollar. Back then Europeans had much more spending power when visiting the United States, and they flooded major cities during vacation season because of that. Today it's the reverse. The US dollar is close to parity with the euro and that has weakened their spending power here, while simultaneously increasing our spending power there. Americans are flooding European cities during vacation season. But the lifestyle for the average resident in the U.S. and average resident in the Eurozone has not changed over time. It is about the same today as it was a decade ago.

This has also kind of been the case throughout history. Throughout antiquity, organized states have relied on natural resources for currency (commonly gold and silver) that had different value to each state. States commonly manipulated currency by trading materials that had little value to them (say silver) for materials that were extremely valuable to them (say gold).

[Steely Dan]

Originally Posted by SIGSEGV

All you're succeeding in arguing is that Americans are more wasteful....

And stupid.


I'm so glad I'm my father's son.

He's not a very good American.

He always told me "NEVER put your money in a car. Cars are appliances, not investments. Find the sweet spot on the venn diagram between affordability, reliability, and gas mileage, then buy that car and drive it into the ground. Put your money into actual investments like stocks, bonds, or real estate".


By not owning a car as a bachelor, and now only owning a single modest car as the head of a 4 person household (and driving it very little), I couldn't even begin to calculate how much extra wealth I've built over the decades simply by following my father's sage and frugal car advice.

[jmecklenborg]

Originally Posted by SIGSEGV

Ok, maybe Americans are so productive (i.e. working too hard)

Almost nobody, as a percentage, does hard and dangerous physical work in the United States.

The simple fact that almost everyone reads and speaks the same language in the United States gives its domestic and international businesses an enormous advantage over Europe.

Also, the United States has many natural ports on two oceans and the interior is mostly flat. Switzerland and Austria are spending huge money right now to build record-breaking tunnels under the Alps. Similarly, Japan has built many major bridges and tunnels. By contrast, there are relatively few major bridges or tunnels in the entire United States, and there is no pressing need to build any more.

So yes, the United States does in fact have natural productivity advantages over every other country.

[Steely Dan]

Originally Posted by jmecklenborg

By contrast, there are relatively few major bridges or tunnels in the entire United States, and there is no pressing need to build any more.

Baltimore says, "hold my beer".

[iheartthed]

Originally Posted by Steely Dan

Baltimore says, "hold my beer".

Detroit's building a humongous one now too.

I would argue that the U.S. is falling behind on infrastructure development. We're leaning very heavily on a lot of infrastructure that is already 100 years old (and older). We also have not been able to keep pace with even other developed countries in building and maintaining our infrastructure. Most of our problems are political, but then again a stable political system is fundamental to a rich country.

[JManc]

Originally Posted by Crawford

Oh, most definitely. A sanitation worker will likely have a decent-sized house & yard on the South Shore of LI, a pair of SUVs, and quite often a boat or other toys. His kids will play youth sports, go to Kalahari waterparks on weekends, and eventually attend SUNY schools.

Sustained by easy credit, not actual wealth. There is as reason why people are financing cars for 6-7 years now and credit card debt is an at all time high.

[MolsonExport]

Originally Posted by Steely Dan

And stupid.


I'm so glad I'm my father's son.

He's not a very good American.

He always told me "NEVER put your money in a car. Cars are appliances, not investments. Find the sweet spot on the venn diagram between affordability, reliability, and gas mileage, then buy that car and drive it into the ground. Put your money into actual investments like stocks, bonds, or real estate".


By not owning a car as a bachelor, and now only owning a single modest car as the head of a 4 person household (and driving it very little), I couldn't even begin to calculate how much extra wealth I've built over the decades simply by following my father's sage and frugal car advice.

Your darn tootin'. While I had cars during (some of) my bachelor years, they were beaters (and when I was a full time student, for much of those years, I did the ol' BMW: Bus-Metro-Walk). As the head of a household of four, we have but one car (7 years old now), a boring Nissan Rogue. I don't have the most impressive stock market portfolio, but it is nearly 7 figures, and I own (well, partly, the bank still owns half) a pretty nice house.

[SIGSEGV]

Originally Posted by jmecklenborg

So yes, the United States does in fact have natural productivity advantages over every other country.

Yes, like minimal vacations, sick days, and parental leave.

[Shawn]

Originally Posted by Yuri

Most offices are deemed reliable anyway and I don't think IMF uses an alternative GDP for China on their official list. It's pretty much the same number provided by Chinese and specially as multilateral organization they just can't dismiss the 2nd most important country in the world as "liars" on their most important report.

Offices from countries with a century of transparent market economics, yes.

But no one goes to Ipsos and says, "Hey, can you give us a market risk assessment of this massive capital project we're thinking about financing in the Netherlands? We're just not sold on Dutch geopolitical stability or market transparency." They ask for these when thinking about investing in emerging markets where offices are decidedly not transparent.

The IMF "officially" respects numbers submitted by Beijing, but in private company, individuals working for the IMF encourage investors to "do their own diligence." I've personally been part of such conversations.

2 minutes of glancing at the SERPs for "How reliable is China's GDP official data" should tell you how often this question gets asked. Just remember: at literally every level of reporting, local Party officials are highly incentivized* to "correct the data" so it tells the story its supposed to tell. That's how mixed command economies work. The US Fed discounts official GDP numbers from Beijing. This is precisely because the Chinese NBS offers no transparency on their data-gathering process and statistical procedures. None at all.

* negatively incentivized that is: report the "correct" numbers or lose your job/go to jail