Grossly Distorting Perception

Several months ago a professor at the University of North Carolina published research that turned beliefs about the economy upside down. Health improves, he said, as the economy shrinks. And as the economy declines, deaths, smoking, obesity, heavy drinking, heart disease and some kinds of back problems all decline as well.

‘Sounds unlikely’, said a New York Times correspondent. And indeed it is, at least by standard reckonings. We all know that an expanding economy makes us better off. Or do we? Another study, from the UK, found that shopping, which is the driving force of the entire economy and which is supposed to make people feel good, can actually make us depressed. ‘For significant numbers, dissatisfaction is now part of the shopping process,’ one of the authors wrote. (As though we needed a study to tell us that.)

What is going on here? How could we feel better when the experts say we should feel worse, and worse we should feel better? Could it be that economists have got it all wrong? 
 
This is the world’s hidden accounting scandal, the one that neither the government nor the media will touch. It concerns the accounting for the entire...

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