Q4 2023 GDP, 50 States & DC

[Shawn]

As for using GDP per capita to compare the wealth of individuals from different countries, it's a flawed logic - but more so because it deals with means instead of medians, and medians far more accurately capture what we're trying to compare here.

PPP has its own flaws: the weightings are assumed, universal, and means-based. Spending habits vary from country to country, both in terms of which staples are purchased and at what ratios. People in Country A spend relatively more on car fuel and less on rice than people in Country B as a percentage of their overall spending, but PPP weightings assume universal spending ratios. And we're dealing with averages (means) again, not medians. PPP also doesn't account for taxes, fees, unofficial costs (bribes, etc.), it's just looking at the pricing of staple goods and trying to find equilibrium between two currencies.

Which introduces more flaws you've got to keep in mind: sometimes currencies trade temporarily at artificially high or low rates due to policy choices, not true market demand. The yen is artificially weak now because until two weeks ago, the BoJ kept central rates negative - the only OECD market to do this, making Japan wildly out of step with the rest of the world's major economies. This was done to drive inflation (something we actually need in Japan and hadn't experienced in close to 30 years), as opposed to curbing inflation like US monetary policy has been concurrently trying to do. It doesn't matter that Japan's underlying economic health is now better than it's been in two decades, with record wage increases and a booming stock market: which fiat are you gonna plow into, one with negative rates or one paying out 5.5+%?

[Yuri]

Originally Posted by JManc

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.

A very good point. Debt is not wealth and in the US, debt (public and private) is massive.

[Yuri]

Originally Posted by Shawn

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

I imagine they can pay much more detailed reports and don't even bother that much about GDP, but they're after more specific details about the economy.

However, people are here making comparisons between the US and other countries based on the official numbers publicly released, not on those private reports. IMF just compiles and put the PDF on their website.

Originally Posted by Shawn

As for using GDP per capita to compare the wealth of individuals from different countries, it's a flawed logic - but more so because it deals with means instead of medians, and medians far more accurately capture what we're trying to compare here.

PPP has its own flaws: the weightings are assumed, universal, and means-based. Spending habits vary from country to country, both in terms of which staples are purchased and at what ratios. People in Country A spend relatively more on car fuel and less on rice than people in Country B as a percentage of their overall spending, but PPP weightings assume universal spending ratios. And we're dealing with averages (means) again, not medians. PPP also doesn't account for taxes, fees, unofficial costs (bribes, etc.), it's just looking at the pricing of staple goods and trying to find equilibrium between two currencies.

Which introduces more flaws you've got to keep in mind: sometimes currencies trade temporarily at artificially high or low rates due to policy choices, not true market demand. The yen is artificially weak now because until two weeks ago, the BoJ kept central rates negative - the only OECD market to do this, making Japan wildly out of step with the rest of the world's major economies. This was done to drive inflation (something we actually need in Japan and hadn't experienced in close to 30 years), as opposed to curbing inflation like US monetary policy has been concurrently trying to do. It doesn't matter that Japan's underlying economic health is now better than it's been in two decades, with record wage increases and a booming stock market: which fiat are you gonna plow into, one with negative rates or one paying out 5.5+%?

That's precisely the point I was making: it's impossible to assume anything about people's income or wealth based on GDP and worse, GDP converted from the local currency to USD.

GDP measure only what a country produces in a given year. It's a country-country comparison on that only. It's not about people's income or comparing people's consuming habits from very different countries.

About Japan, Japanese are much wealthier now, live longer, work less, have access to way more goods and services than they had in the early 1990's, when the "Imperial Palace worthed more than the California GDP" (another nonsensical comparison people did at time). The Imperial Palace doesn't cost US$ 4 trillion today and that means nothing to people. In fact, it's way better: Tokyo is very affordable and normal people can actually live there.

[iheartthed]

IMO, the real differentiator between wealthy and emerging countries is infrastructure. Drive for 4-5 hours away from the big metros in Brazil or Argentina and you will quickly understand that the road networks in the United States are far superior. The quality of airports in the United States in medium American metros will rival the quality of airports in the biggest cities. And while passenger rail in the United States is, overall, far behind other developed nations, rail in the U.S. is more advanced than most of the developing world (China being the notable exception).

[Yuri]

I think you’re generous regarding Brazil. There is São Paulo state where you actually have an actual hood infrastructure, with 2x2 (or more) highways cutting even the most remote corners of the state and all the rest. Outside SP, even on wealthy states, highway infrastructure is horrible, even very close to big cities. Things improve very slowly as they just upgrade the bad and old simple highways, adding lines and that’s it.

“Unfortunately” we’re not China. Environmental laws, public hearings with everybody involved, bureaucracy of all types. It takes ages. And of course, the strong welfare state has its the downside: it takes a massive share of the budget and very little is left for investments.

[iheartthed]

Originally Posted by Yuri

I think you’re generous regarding Brazil. There is São Paulo state where you actually have an actual hood infrastructure, with 2x2 (or more) highways cutting even the most remote corners of the state and all the rest.

Outside SP, even on wealth states, highway infrastructure is horrible, even very close to big cities. Things improve very slowly as they just upgrade the bad and old simple highways, adding lines and that’s it.

“Unfortunately” we’re not China. Environmental laws, public hearings with everybody involved, bureaucracy of all types. It takes ages. And of course, the strong welfare state has its the downside: it takes a massive share of the budget and very little is left for investments.

Yeah, I was being generous lol. I've driven across a large chunk of Brazil, mostly near the coast. I haven't driven between SP and Rio, but I just assumed the road network was high quality. You can go east, north east of Rio for about three hours and still be on the equivalent of interstate grade highway. I think it's just after Cabo Frio/Buzios it really starts to go downhill and stays like that until you hit the next major city.

It's similar in Argentina. The road networks in Buenos Aires are just as well developed as any global major city I've visited. But the inter-city highways are all two lane highways without center median barriers. Most Americans alive today can't remember when the U.S. highway system looked anything like that.

[Crawford]

Mexico actually has very good roads, but they're all expensive toll roads owned by American firms. Generally called cuotas. Nowadays, there's no issue getting around Mexico. And the prices are high enough that it's just trucks and middle class or higher drivers.

In contrast to cuotas, the libres (free roads) are terrible, congested, slow and unsafe.

[Yuri]

Originally Posted by iheartthed

Yeah, I was being generous lol. I've driven across a large chunk of Brazil, mostly near the coast. I haven't driven between SP and Rio, but I just assumed the road network was high quality. You can go east, north east of Rio for about three hours and still be on the equivalent of interstate grade highway. I think it's just after Cabo Frio/Buzios it really starts to go downhill and stays like that until you hit the next major city.

Actually, highways between São Paulo and the upstate/coast are the best ones: large, modern, world-class. Campinas is a massive highway hub as well, second only to São Paulo. SP-Rio is a federal highway, and even though it's a full highway with several lines, it's not as good as the rest of the SP state-owned.

Crawford knows Santa Catarina, a state as wealth as São Paulo and it's actually booming (Texas vs California thing) and their infrastructure couldn't be worse, from highways to sewage systems.

One thing about Brazil that except for São Paulo, no highways was built from scratch, outside some ringroads here and there. The very few 2x2 highways outside São Paulo is roads, with bad gradients where they simply add lines (we call "duplicação" in Portuguese).

Originally Posted by iheartthed

It's similar in Argentina. The road networks in Buenos Aires are just as well developed as any global major city I've visited. But the inter-city highways are all two lane highways without center median barriers. Most Americans alive today can't remember when the U.S. highway system looked anything like that.

I don't know Argentina but I imagine it's very easy to have good roads there. It's big flat land everywhere. Brazil, it's the opposite, it's very rugged.

Originally Posted by iheartthed

But the inter-city highways are all two lane highways without center median barriers.

I'm not sure if I understood it quite well. Do you have an Street View example?

[iheartthed]

Originally Posted by Yuri

I'm not sure if I understood it quite well. Do you have an Street View example?

Roads like these:

https://maps.app.goo.gl/SwJXFDRfcqfrkx4u8

https://maps.app.goo.gl/fckT5CroSHcFAcoW7

I believe the second link is a main road from the southwest into Buenos Aires. A road of that importance feeding a U.S. city of any size will be an 8 lane highway from end-to-end lol.

[Yuri]

Originally Posted by iheartthed

Roads like these:

https://maps.app.goo.gl/SwJXFDRfcqfrkx4u8

https://maps.app.goo.gl/fckT5CroSHcFAcoW7

I believe the second link is a main road from the southwest into Buenos Aires. A road of that importance feeding a U.S. city of any size will be an 8 lane highway from end-to-end lol.

Oh yes! That's how virtually all highways in Brazil are except for few kilometers nearby state capitals. It's only in São Paulo 2x2 (and more) highways cross the entire state and are found everywhere.

Paraná, 11 million people (5 million cars), and one of the wealthiest states, is only now completing the 2x2 connection (adding extra lines, not a new road) between Curitiba (3.3 million people) and Londrina-Maringá (2 million people). It was just like those Argentinian roads.

Imagine how nightmarish it was, specially considering Paraná produces a massive amount of soybeans and maize (1/4 of country's production) and most of it goes by trucks to the port right on that highway.

[JManc]

Originally Posted by iheartthed

Roads like these:

https://maps.app.goo.gl/SwJXFDRfcqfrkx4u8

https://maps.app.goo.gl/fckT5CroSHcFAcoW7

I believe the second link is a main road from the southwest into Buenos Aires. A road of that importance feeding a U.S. city of any size will be an 8 lane highway from end-to-end lol.

Four lanes tops (Interstate or US Highway) until you get closer to the metro area then it widens up to more lanes but this was quite a bit away from civilization. This Argentinian highway is unique because it's only two lanes where ours are four no matter what apart from a few exceptions.

[Yuri]

Originally Posted by JManc

Four lanes tops (Interstate or US Highway) until you get closer to the metro area then it widens up to more lanes but this was quite a bit away from civilization. This Argentinian highway is unique because it's only two lanes where ours are four no matter what apart from a few exceptions.

That's nothing. This Argentinian one seems to be in the middle of nowhere. Just take a look at this: https://www.google.com/maps/@-29.255...8192?entry=ttu

Connecting Porto Alegre metro area (4 million inh.) and Caxias do Sul (600k inh.). And that's one of the richest part of Brazil, heavy industry, German kind of mid-sized industries, the Italian vineyards, the whole thing.

And then I see those 2x2 in Wyoming or Montana and I think wtf...

[iheartthed]

Originally Posted by JManc

Four lanes tops (Interstate or US Highway) until you get closer to the metro area then it widens up to more lanes but this was quite a bit away from civilization. This Argentinian highway is unique because it's only two lanes where ours are four no matter what apart from a few exceptions.

I was being sarcastic about 8 lanes, but all U.S. cities of any note are connected by 4 lane highways at minimum, with a wide center median made of concrete or a 100 foot grassy median and are 100% grade separated. Maine to Miami, Manhattan to The San Francisco Bay, you will likely travel the entire distance by car on at least a four lane highway. It's much the same in Europe too. So it is a bit of a culture shock when you get into countries where that is not the norm, and most long distance driving is done on two lane highways that are not grade separated.

[Yuri]

Originally Posted by iheartthed

I was being sarcastic about 8 lanes, but all U.S. cities of any note are connected by 4 lane highways at minimum, with a wide center median made of concrete or a 100 foot grassy median and are 100% grade separated. Maine to Miami, Manhattan to The San Francisco Bay, you will likely travel the entire distance by car on at least a four lane highway. It's much the same in Europe too. So it is a bit of a culture shock when you get into countries where that is not the norm, and most long distance driving is done on two lane highways that are not grade separated.

Today you can go from Porto Alegre (and soon from Pelotas, 300km south) to Brasília only using 2x2 or more: https://www.google.com/maps/dir/Port...!3e0?entry=ttu but that's very recent development, maybe since 2020, I don't know exactly when the last "duplications" were completed.

2,114 km in 27 hours. In comparison, New York to Tulsa (Chandler Bing): 2,161 km in 21 hours.

[twinpeaks]

Originally Posted by MolsonExport

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). .

We have something similar in San Francisco, we say "take the BMW (BART-MUNI-Walk), lol

[ColDayMan]

Originally Posted by iheartthed

So it is a bit of a culture shock when you get into countries where that is not the norm, and most long distance driving is done on two lane highways that are not grade separated.

Indeed.


https://www.shutterstock.com/

[SIGSEGV]

Romania enters the chat:
https://www.google.com/maps/@45.3829...8192?entry=ttu
https://www.google.com/maps/@45.2933...8192?entry=ttu
https://www.google.com/maps/@45.2916...8192?entry=ttu
https://www.google.com/maps/@44.6886...8192?entry=ttu
https://www.google.com/maps/@45.2052...8192?entry=ttu

[jmecklenborg]

Originally Posted by Steely Dan

Baltimore says, "hold my beer".

That was a very minor bridge. 30,000 vehicles per day doesn't place it on even the top 100 most important bridges in the United States and maybe not the top 500.

The interstate highway loop highway bridges in several metro areas smaller than Baltimore carry much more traffic.

Anyone here heard of the I-275 Combs-Hehl Bridge? It carries 2X the traffic as the destroyed Key Bridge in Baltimore:
https://en.wikipedia.org/wiki/Combs%E2%80%93Hehl_Bridge

[jmecklenborg]

Originally Posted by iheartthed

IMO, the real differentiator between wealthy and emerging countries is infrastructure.

This website is centered around urban infrastructure like high speed passenger rail and subways but those things are ancillary to other types of improvements and then the general character of the land.

The U.S. has the greatest system of interior navigable waterways in the world. There is more cargo traversing America's navigable rivers than every other river in the world combined. Transport by river barge is significantly cheaper than ocean shipping because the equipment is significantly less sophisticated and can be operated by unsophisticated crews that require just 2-3 days of training.

On top of this, the US has the largest continuous swath of farmland on the globe. It's much more efficient to farm X amount of land when it's contiguous and served by the above-mentioned waterway system as compared to the same amount of farmland but divided into 10+ pockets. The U.S. Midwestern farmbelt is like the Saudi oil fields compared to having the same amount of oil but in 25 different pockets that each require different technology to access and refine.

People here don't want to believe that the U.S. has fundamental advantages but it really does.

[shadyunltd]

Originally Posted by Yuri

That's precisely the point I was making: it's impossible to assume anything about people's income or wealth based on GDP and worse, GDP converted from the local currency to USD.

GDP measure only what a country produces in a given year. It's a country-country comparison on that only. It's not about people's income or comparing people's consuming habits from very different countries.

About Japan, Japanese are much wealthier now, live longer, work less, have access to way more goods and services than they had in the early 1990's, when the "Imperial Palace worthed more than the California GDP" (another nonsensical comparison people did at time). The Imperial Palace doesn't cost US$ 4 trillion today and that means nothing to people. In fact, it's way better: Tokyo is very affordable and normal people can actually live there.

Shawn's point was that these differing habits do matter when looking at GDP on a PPP basis.

As for Tokyo being affordable, you'd have to look into Tokyo's rent/mortgage affordability (i.e., as a multiple or % of Tokyo salaries), and compare that to other cities. London rents at face value look better than New York or San Francisco, but not so much based on actual affordability.