Our Biggest Lie of the Year award for 2010 goes to National Public Radio!
NPR wins for constantly repeating the mantra-lie that "Two-thirds of the economy is consumer spending." While other media also repeat this lie, NPR is supposed to be educational radio and ought to know better.
While the claim is statistically true, it is meaningless; just like it is true but meaningless that "Two-thirds of NFL football players have brown eyes." (stat courtesy of my brilliant co-author Julie Coates).
It is also a lie because the implication is that consumer spending drives the economy, which is totally false. Consumer spending is a result, not a cause. Two-thirds of the Bolivian economy is consumer spending, and one cannot find two economies more different than the U.S. and Bolivia.
THE TRUTH: Business investment drives the economy, not consumer spending. When business invests in the economy and its workers, then people will have more money to spend. British economists recognize this, unfortunately American economists are clueless.
Comments