Credit score and GDP: a master class in how using bad measurements gives you terrible results

Economics is a belief system, not a science, wielding the wrong tools for the job

Thermometer photo by Polina Tankilevitch from Pexels, Tools on table photo by Tima Miroshnichenko from Pexels, Peeler image by Walter Bichler from Pixabay, and photoshop by author

One way to build something wildly awful is to use the wrong measuring tools. Even the most skilled carpenter in the world will be incapable of building something wonderful if you take away his ruler and replace it with a thermometer. It can be a crazily accurate thermometer, but it will still be measuring the wrong thing to get the job done.

So let’s imagine that what you’re measuring is the economy. If you revisited political discussions about the economy from the 1930s, you would find them refreshingly unfamiliar. You would hear questions like “how well is the economy serving the needs of people living within it?” Governments responded to the Great Depression by building, not by cutting. America instituted its first income tax, and with that money they built a mighty infrastructure of bridges, dams, roads, parks, schools, and libraries, and created an old age pension. Imagine how the right would react if public schools and libraries didn’t exist and you proposed creating them with tax dollars today.

We need to measure the macro — the big picture — and the micro — the individual parts. The way we…