I just finished reading one of the most disturbing articles I've seen in some time: Numbers Racket: Why the Economy is Worse Than We Know, by Kevin Phillips, in May's Harper's Magazine.

Phillips documents the changes that various administrations have made to the statistical methodology used in calculating the three major economic indicators: GDP, CPI, and Unemployment. Since 1961, nearly every U.S. president has "tweaked" the calculation of these numbers to mask certain politically inexpedient economic realities.

The cumulative result of these successive tweaks has been a severe case of what Phillips terms "Pollyanna Creep." The true health of the economy has come to be severely overstated by inflated statistics. Keep Reading >>

Cory Doctorow has a new column over at the Guardian about the information economy. Much like the video below, Cory argues in this latest column that our leaders have fundamentally misunderstood (perhaps at the behest of the media lobby) the idea of the information economy:

The thinking is simple: an information economy must be based on buying and selling information. Therefore, we need policies to make it harder to get access to information unless you've paid for it.

That means that we have to make it harder for you to share information, even after you've paid for it. Without the ability to fence off your information property, you can't have an information market to fuel the information economy.

But this is a tragic case of misunderstanding a metaphor. Just as the industrial economy wasn't based on making it harder to get access to machines, the information economy won't be based on making it harder to get access to information. Indeed, the opposite seems to be true: the more IT we have, the easier it is to access any given piece of information — for better or for worse.

Ultimately I believe that Doctorow is correct - the ability to copy and move information is the essence of the information economy. Unfortunately traditional property rights seem to collide head-on with this new paradigm, and it remains to be seen whether the legal/poltical system can adapt.

There are a couple of great articles in the June Atlantic Monthly, which I picked up on my recent trip to Key West.

In 'Stoking the Beast', Jonathan Rauch explains new findings from William Niskanen, of the libertarian Cato Institute.

The Republicans, starting with Ronald Reagan, have long said that the road to smaller government is paved with lower taxes. That is, if there is less tax revenue, the government will be starved of funds, and forced to decrease spending.

Niskanen's findings turn this notion on its head. In reality, decreasing taxes artificially lowers the apparent cost of government to the public. As the cost of government appears to be inexpensive, the demand for government services increases. As the demand for government services increases, the government responds to demand by engaging in deficit spending, not by cutting vital services. Keep Reading >>