Wednesday, January 16, 2008

Applying the Polly Conundrum: Ian Williams

As regular readers will know, the Polly Conundrum is very simple: when faced with a particularly egregious statistical error, one simply asks whether the writer is a moron or a liar. When faced with anything in Comment Is Free, the answer is usually that the writer is both a moron and a liar.

But, in the spirit of charity, we'll actually bother to ask the question of Ian Williams, a writer who is so-enamoured of the European model of society, and so contemptuous of the US one, that he lives in New York. Most of his article is utter balls, but the main paragraph that we shall focus on is this one:
The same week that Theil's diatribe was published, the Oxford Economics consultancy calculated that Britain—National Health Service and mandatory holidays notwithstanding—has outstripped the US in terms of GDP per capita. In fact the figures probably understate European living standards compared with the US.

So, what is wrong with this, you ask? Well, let's turn to Timmy's post, on dodgy figures, at the Globalisation Institute.
That is, of course, an entirely allowable bias to have, but somehow the statement that "equity makes a good health system so more equitable ones are better" isn't all that surprising a finding.

We've had a recent one here in the UK, following a report from Oxford Economics:
LIVING standards in Britain are set to rise above those in America for the first time since the 19th century, according to a report by the respected Oxford Economics consultancy.

The calculations suggest that, measured by gross domestic product per capita, Britain can now hold its head up high in the economic stakes after more than a century of playing second fiddle to the Americans.

It says that GDP per head in Britain will be £23,500 this year, compared with £23,250 in America, reflecting not only the strength of the pound against the dollar but also the UK economy’s record run of growth and rising incomes going back to the early 1990s.

That's really a rather surprising finding, that living standards in the UK will be higher than those in the US. So much so that it has to be wrong, as it is indeed incorrect. The same report states:
With an adjustment made for this “purchasing power parity”, the average American has more spending power than his UK counterpart and pays lower taxes.

Which is where the problem is. We cannot measure living standards across countries simply by using market exchange rates. We have to use the PPP ones, and by that measure the US is indeed still much richer than the UK or any other large European economy.

So, we need to apply the Polly Conundrum to Ian Williams: is he a moron or a liar? Or, do we simply apply the CiF Modifier and asume that he is just a lying fucking moron?


Machiavelli's Understudy said...

It never fails to amaze me, the number of people who put great store on the 'GDP per capita' dick-waving competition. PPP never gets a look-in...

Mark Wadsworth said...

Who gives a shit about whose GDP per capita is higher than whose?

What matters is that this country is being run into the ground by the Nulab, the Scots mafia (who aren't trusted to run Scotland any more!) and the EU.

Turning this country round wouldn't be that difficult, whether we catch up or overtake the USA, Switzerland, Norway in terms of GDP, crime, educational standards is neither here nor there.

Roger Thornhill said...

Earnings in currency terms ignoring tax and purchasing power! He'll be rattling off tractor production and "employment" next, forgetting we have "salaried unemployed" by the 100,000's*

An FLM or a LFM...not sure which scans better...

* shall we call these people "sprinkles", I wonder?