Friday, July 8, 2011

The Tenacity of a Textbook Truism

Listen to the Obama administration as it vainly attempts to counter bad employment news with increasingly feeble metaphors. Last month, President Obama said, "there are always going to be bumps on the road to recovery." This month, his Council of Economic Advisers Chairman Austan Goulsbee blamed the dismal BLS employment situation report on "headwinds faced in the first half of this year." The takeaway message should be that it is important not to read too much into any one monthly metaphor.

What the two images have in common is that they refer to some sort of vehicle traveling in a direction with a velocity toward some destination: recovery. Meanwhile, economists cling to more amorphous and thus, presumably, more robust figure of speech -- "growth." It goes without saying (doesn't it?) that something that gets bigger, grows. A plant grows as it metabolizes sunlight, water and nutrients into chlorophyll. A dirt pile grows as a backhoe scoops buckets out of the earth and dumps them in one place. They are the same, no?

No. In one case there is an organic transformation of matter and energy to augment an organism. In the other, there is a mechanical displacement of matter as the result of the combustion of energy. The economic growth metaphor makes no distinction between the two kinds of processes and thus implies the substitution of one for the other, as if a tree could grow by adding ornaments to it or a dirt pile, given a bit of a kick-start can continue to increase of its own accord.

The metaphor of economic growth is a mixed bag that shape shifts with no particular regard to what is growing or how. The truism that "labor-saving technology creates more jobs than it destroys" arose within an old, archaic, sense that implicitly assumed a naturally-unfolding, plant-like organic process. The neoclassical model of exogenous growth is more akin to the mechanical -- or in this case mathematical -- enduced piling up of dollar values. Yet economists speak of "growth" -- and of stimulating it -- as if there were no discernable difference or contradiction between the two types of processes. Throw in that vehicle, rambling down an uneven path at a variable speed, encountering headwinds and soft patches and you have a dog's breakfast of mixed metaphor.

UPDATE: Headwinds or hot air? Goulsbee takes the headwinds explanation to town at Marketplace: "we had some significant headwinds that slowed the growth rate down in the economy." "You know, I would add also we've added some uncertainty as where people are actually going out in public and saying well maybe the U.S. government shouldn't pay its bills. As some of the kind of headwinds that we've been facing."

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