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Economic News, Data and Analysis

CheneyEBayGate

First, the 2004 Economic Report of the President suggests that McDonald’s might be manufacturing.
“When a fast-food restaurant sells a hamburger, for example, is it providing a ‘service’ or is it combining inputs to “manufacture” a product?” (see p.73)
Now this…

TAPPED
IT’S WORSE THAN THAT. Yesterday, Dick Cheney took the time to say something really dumb:

Indicators measure the nation’s unemployment rate, consumer spending and other economic milestones, but Vice President Dick Cheney says it misses the hundreds of thousands who make money selling on eBay.
That’s a source that didn’t even exist 10 years ago,” Cheney told an audience in Cincinnati on Thursday. “Four hundred thousand people make some money trading on eBay.”

Message: He doesn’t care. John Edwards had a witty riposte:

“If we only included bake sales and how much money kids make at lemonade stands, this economy would really be cooking,” Edwards said in a statement.

But now here’s the thing — as Brad DeLong notes we actually do include eBay’s domestic revenues in our economic statistics. It’s a pretty big company, and the fact that it’s relatively new doesn’t change that. To be generous, I assume Cheney was thinking of the fact that GDP systematically understates the value of new products, but that’s something that’s been going on since the dawn of time, not an excuse for the economy’s poor performance under Bush’s allegedly employment-boosting tax cuts.

As for the GDP claim… GDP measures the total value of goods and services produced in a given year. Most of ebay is stuff being moved around from one garage to anther and shouldn’t be included in GDP.
Why don’t we all just stick to the official government data for the time-being, and not make even more denials about how the economy is doing.

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