Economist 4/28/16

  1. THE outcome from the five Democratic primary elections held on April 26th confirmed that Hillary Clinton is now virtually assured of clinching the Democratic nomination for president. She won four of the five states that were up for grabs, and is now less than 250 delegates away from securing the 2,383 needed for victory. Bernie Sanders won only in tiny Rhode Island. Mr Sanders had been on a roll in late March and early April, winning seven consecutive contests, though these were mostly in states that hold lower-turnout caucuses (local meetings of party activists) rather than primaries. In those states and elsewhere the overwhelming base of his support has been among the millennial generation, and exit polls from Tuesday reaffirmed that trend. In Pennsylvania, for example, he won 83% of the votes of those aged under 30. In the Democratic primaries and caucuses overall, Mr Sanders won 70% of the under-30 vote, but this made up just 17% of all voters.
  2. On April 22nd the Centres for Disease Control and Prevention (CDC), a US federal agency, released a report suggesting that America is in the grip of a sustained rise in the suicide rate across all age groups and for both sexes. The age-adjusted rate rose by 24% from 1999 to 2014, from 10.5 to 13.0 per 100,000 people. Men shoot themselves and women tend to take poison, although there has been a rise in suffocation and strangulation among both genders.The suicide rate declined steadily from 1986 until 2000, the date the CDC paper takes as its starting point.The rise since 2007, when the financial crisis got under way, adds weight to the idea that suicide studies are really just a branch of macroeconomics.When plotted on a map, what researchers refer to as a “suicide corridor” runs from Montana in the north to New Mexico in the south, with Nevada to the west and Colorado to the east. The best explanation for this seems to lie in demography. Native Americans and non-Hispanic whites both have a higher propensity for suicide than other ethnic groups.Surveyed by age, the group at the highest risk of committing suicide is not reckless young men but males aged 75 or over.
  3. It is tricky it is to compare living standards over time. Yet such comparisons are not just routinely made, but rely heavily on a single metric: gross domestic product (GDP). This one number has become shorthand for material well-being, even though it is a deeply flawed gauge of prosperity, and getting worse all the time.Defenders of GDP say that the statistic is not designed to do what is now asked of it. A creature of the 1930s slump and the exigencies of war in the 1940s, its original purpose was to measure the economy’s capacity to produce.If GDP is failing on its own terms, as a measurement of the value-added in an economy, its use as a welfare benchmark is even more dubious.But at least the direction of travel was the same. GDP grew rapidly; so did quality of life. Now GDP is still growing (albeit more slowly), but living standards are thought to be stuck. Part of the problem is widening inequality: median household income in America, adjusted for inflation, has barely budged for 25 years.
  4. Measuring prosperity better requires three changes. The easiest is to improve GDP as a gauge of production.Instead, statisticians should improve how GDP data are collected and presented. To minimise revisions, they should rely more on tax records, internet searches and other troves of contemporaneous statistics, such as credit-card transactions, than on the standard surveys of businesses or consumers.Second, services-dominated rich countries should start to pioneer a new, broader annual measure, that would aim to capture production and living standards more accurately. This new metric—call it GDP-plus—would begin with a long-overdue conceptual change: the inclusion in GDP of unpaid work in the home, such as caring for relatives.
  5. CARMAKERS have two methods for dealing with the gases that belch from exhaust pipes. One is to reduce emissions of carbon dioxide, nitrogen oxide (NOx) and other nasties by spending heavily to develop cleaner engines. Another is to devise methods to game emissions-testing systems but keep polluting the atmosphere on the road.Volkswagen and Mitsubishi opted for the second method, using means illegal in some countries.Mitsubishi admitted on April 20th that it had improperly conducted fuel-economy tests. Its potential punishment in court for 25 years of rule-breaking is, as yet, unclear.VW reached a deal on April 14th in an American court to fix cars, compensate owners and pay fines. The details are not yet public but reportedly VW will buy back around 480,000 cars and give a further $5,000 to each owner.Europe’s system relies on a gentle test cycle that fails to replicate how cars are actually driven on the road. Carmakers are permitted to test specially prepared prototypes.Testing agencies compete for business from carmakers by promising to “optimise” conditions. America’s system, in contrast, is more robust. Carmakers test their own vehicles. The Environmental Protection Agency subsequently checks their figures using randomly selected production cars. If the numbers diverge it has the power to levy eye-wateringly large fines on firms.

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