[inaudible] [inaudible] [inaudible] and that concludes our live coverage from lit fest in chicago for day one. Well be back again live on sundays. Now, if you missed any of the events we covered today, theyll only air beginning at midnight eastern. [inaudible] book tv tapes hundreds of authors throughout country all year long. Heres a look at some of the empts well be covering this week on monday at Barnes Noble Book sell rs in maryland former Washington Post reporter dale quinton will be discussing his latest book one month of murder. About a homicide squad in maryland. Tuesday at the new york union with league in manhattan, syndicated radio host eric argues that america has moved away from the founders original ideas on liberty and justice. That same evening hair Harvard Bookstore talking about the impact of fracking on l environment and public health. And on wednesday at kramer books in washington, d. C. , Police Science professor Melissa Deckman will look at role women play in the leadership of the Tea Party Movement and africanamerican studies professor Carol Anderson will argue that every time africanamericans make social progress, they are met by a deliberate pushback. And next saturday, well be at thage Yule Roosevelt reading festival hosted by franklin d. Roosevelt president ial library and museum in hyde park new york. Book book tv it covering this week many of these events put to the public. Look for them to air on booktv on cspan2. Youre watch ling booktv on cspan Tv Television for serious readers. Heres a look at whats on prime time tonight and kick off with mary, executive director of the authors guild. Discussing how the guild representing authors. Then at 8, Joshua Cooper describes what he calls the secret to power. His book is the 7th sense. Representative tom cole sits down with booktv to discuss the books that have influenced his life and career. At 9 15 p. M. Eastern and at 10 on booktv afterwars program, senator Barbara Boxer talks about her book, the art of tough with senator amy and finish up our programming at 11 with manuel her book is this brave any world. That all happens tonight on cspan twos booktv and first up mary. Were going to get started. Theres a lot of books to mention i want to make sure i get them right. Sorry were starting a little late. Thanks for all being here and thanks especially to folks on our scout steve forbes and george guilder pleased that youre here. The last, been a lot of talk about over the last generation. Even last 40 years really highlights the challenges of measuring economic values and a lot of people take the view that there hasnt been much progress. Much rosen income. Academic stagnation over that period and i often try to put the lie to that assertion by asking people whether theyre low income, high income raise your happened if you want to go back to 1975. And they usually arent a lot of takers. But one thing is undenial over o the last ten or 15 yearses, we truly have been living through a period of time economic stagnation and peter joined the Cato Institute and trying to explore reasons for this growth slowdown. Published two book us i have them ebooks one is understanding growth slowdown. And another is reviving Economic Growth. For the first time weve had a tenyear period in which real gdp growth has not reached 3 in any single year. And at the time i joined kato i was hope powerful because during the period of my lifetime and lived through two time of economic stagnation or sharp economic contraction,s its created a lot of pressure, tension, and anxiety that often has been the impetus of cause on the change of policy front, and i think over the last few months ive realized that i was correct in expecting that economic anxiety would create some turmoil and stimulate some change. I was wrong because its not kind of change that i had anticipated. Clearly rlg really luck to have three gentleman today that i dont think need much much an intrux but try to provide one. Between them i think theyve written more books than ive ever read. But i think its a great opportunity for each of them to comment on their views of how were going to revive Economic Growth in the United States and there shall continue the course of progress and prosperity our nation has enjoyed for such a long period of time, and they each have books that have been released recently. That actually speak to this i spoke with a donor to cato recently and he has a son who will be starting college in the fall. And he told me that he was considering attendingcato university this summer. So that his son could be inok inoculated in college before he attended. When i was getting ready for college, i need such inoculation but in senior year of my high school days, george guilder bock wealth poverty was release ed and during the summer between high school and college i read it. And it gave me no or shortage of ammo to use against the marks as professor i encountered when i attended School Including in classes as capitalism and its critics. I think things have changed some things havent changed i think faculty at the university was the same it was at that time. But i felt that in my classes we were able to engage in lively debate and disagree without fearing as many students do today that it can hurt their grades. And a transcript and disagreement is not permitted. So i actually thank you george for providing me so many of ammo to use against fraternity brothers, professors and others with whom i didnt who Department Agree with me on the case for enterprise and free markets. Ammo started at cato. Rntion thanks so much for that. Thanks so much for that. Gormings book is the scamgdz of money. Were delighted i think one of the ysdz that cato promoted for a long time is that the fiat money system and power of the Federal Reserve is a great threat not only to our economic well being. But to our freedom and cato held a prominent annual monetary conference thats coordinated by our Vice President jim dorn and we start for monetary and financial at tiffs to highlight these risks and to promote free market allative to our Current System so george east book is very important and timely in addition steves last book i believe was similar topic highlights the threat that lack of sound money poses to our country so those are both tremendous contributions to popular literature. I told steve earlier that for most of my life ive not been affiliated with other major party but that in late 1995 i registered republican so that in the 1996 connecticut primary, i could cast my first primary vote for Steve Steve Forbes for president. Steve replied that he wishes a lot more people [laughter] registered and voted for him. But even in defeat he made great contributions to the debate and the the case for freedom and enterprise, sound money, and a flat tax, and he is still at work. His book that he wrote with Elizabeth Ames reviving america how appealing obamacare replacing the tax code, and reforming the fed will restore hope and prosperity. And i think he did does a fantac job really prioritizing three key areas particularly areas such as health care and money where many of the problems are actually created by Government Intervention and for some reason the prescription that many people suggest is more Government Intervention. Finally mark we know as an academic professor an author economist, but many also know as the freedomfest which he accurately called World Largest gathering of free minds which takes place in las vegas every summer. Delighted to have mark here. I mentioned that the outset that while we can agree that theres been income and economic stag nation of late, the measurement problems with reflected in our economic aggregate, i think do fool us because there are many things that arent captured in gdp and i again reject assertion that americanss really have any income level have experienced stagnation in their well being in their lives in the last four years. Mark has proposed and now has an updated version at least an alternative to Gross Domestic Product as a measure of our economy. And its proposed a alternative called gross output. Im going to let mark explain it because one of the reasons rational he gives for it being a improved and accepted version of the measure of the economys prns is that it is now published convertly by the government along with the gdp figure quoit an achievement but libertarians we dont necessarily take Government Action as a as an endorsement. So im looking forward to his remarks explaining some of the work hes done in developing and promoting more effective measures of Economic Performance and we will proceed with the speakerses in the reverse order by which i introduce them. So please join me in offering a warm welcome to cato mark. Peter your comments about slow Economic Growth and the fact that we havent experienced 3 growth and sometimes reminds me of this, this program that george w. Bush set up called the 4 growth plan. And when i talked to the organizer of it, i said 4 growth plan now did he mean growth of the economy or o growth of government . So she didnt appreciate that comment. But unfortunately under george w. Bush economy never did using standard gdp statistics never did grow never did grow 4 during entire year of full employment. So kind of unfortunate. What id like to talk today is what had peter mentioned gross output. I think its a very important statistic. And the fact my main thesis is that gross output or go as we call it offers a better, more comprehensive picture of the economy. Is a powerful Unifying Force between accounting, finance, and economics. It links micro and in many ways go is missing piece of what had the elitist economist calls the prosperity puzzle which had their latest issue and interesting they talk pate in there about problems with gdp which im sure is will come up in this discussion. But in in case, my argument that this is a unifying approach that its a more comprehensive picture of the economy had its a tall order and so like to get started. I actually see it as a paradigm shift in the way we treat mac koa economics. So we start off with basic what is is gdp and supposed to measure, annual spepgding one way to look at it in the economy. Consumer, government, and business c plus i plus g is the way they normally talk about it in classes. And theres a problem with gdp a lot of problems with gdp but one i want to focus in particular is according to gdp statistics what u drives the economy . And so what we find out what we break it down, you see that had it breaks into Consumer Spending as the biggest sector of the economy. Government spending second, and business spending poor third and what does that say in terms of policy implication thats the issue. And of course because Consumer Spending represents such twothirds basically of gdp you get the media constantly making, creating a myth thats one of the most common myths in economics. And this is an example of it from the wall street journal. You got it from all of the cases Household Spending generates twothirds of total economic output. Says the wall street journal so steady spending gains that is Consumer Spending gains should translate into Economic Growth. If only consumers would spend more thats all it takes. And, of course, you have New York TimesConsumer Spending makes up 7 7 of the economy and driving growth during economic roifers and finally another one from wall street journal consumers are are the engine of the u. S. Economy. Consumers not producers, not entrepreneurs. Consumers accounting for 77. Of the economy so you can see the problem thats inherent with using gdp as a statistic. It is this are we coming to an accurate conclusion is our question. So we have to ask ourselves a question what is missing from gdp . Well, again gdp is c plus i plus g18. 6 trillion my is that the economy . So we break it down into consumption 66 , 12. 4 trillion dollars. Investment and free tradein, so what is missing in gdp . This is the surprise factor. The supply chain. Gdp does not major the supply chain and it does not measure all the business spending, the bw spending to bring products to their final use. You see gdp just measures value of finished goods and services. Your clothes, your shoes, the internet. All, everything that were enjoying right now. This cup of water. Thats all counted in gdp but the spending by business to get you to the finished products is left out. And that is its achilles heel in in ways and a look at the supply chain in which ive been measuring in which the government is measuring. Bureau of Economic Analysis 20. 3 trillion. Its more than Consumer Spending which 12. 4 and more than Government Spending and more than fixed see the eye part is fixed investment. Now, what is gross output . Well it can be for those of you economist and urban fishers equation of exchange is measures total transactions. Its also a measure of high acts triangles, and so this is taken from prices and production and this great book that frieda wrote in 1931 when he was lecturing at the London School of economic hads. And theres a picture of the triangle that he used now it was purely theoretical with no breakdown and no statistics backing it. It was pure theory and it has had a rough road of acceptance. But what im suggesting is that high x triangle is being measured today now by the government. And this is a fantastic break through, and im pleased that this program here today is taking place in the high auditorium so appropriate considering that government is now measuring high ax triangle so we know the background of kayak i thought i would post this up her and particularly hes no more for his book the road to surf them in the constitution of liberty but hes also author of this microeconomic work which has had porld the foundation of my own o work and the structure production called prices and production accomplished accompli have a First Edition signed by kentucky yak. Today ive come out or o fair books has published his two essays on the Business Cycle called high ax triangle an they ask me to write the introduction. But heres a modern day version of high ax triangle and shore four stage of production. Resources, production distribution, and final output so you can see gd sprks in there but then so are the stages, the supply chain prior to that with stages one, two, and three. So this is a great wie to capture universal four stage model of the economy. Every good service that you and i use has gone through resource, production stage, the distribution are or wholesale and resale stage and final use represented number four by gd rks. Well the big news in april 1914 bureau analysis that puts out gdp statistics has now started to measure great gross output and measure high ax triangle or o total transaction under or bonn fisher depending on how you want to look at it and we have steve who is pioneer of the director of the bea who said gross output has a perspective on the economy in powerful new set of tool and analysis one that is closer to the way many businesses see themselves. And isnt that true. Business sees themselves as producing, moving the product along the production process. And thats what gross output is measuring. So whats really interesting a lot of people havent noticed this. But wherever bea has a quarterly announcement of data which they did just recently, notice how they define, how they define gross, gdp. They define it in term was gross output first and subtract intermediate production, plus intermediate input equals gross output or another way of the way they define it, gdp is is gross output minus intermediate input so basically what theyre doing is getting you, the audience, the consumer of gdp statistics to get used to the idea of a what had i call a topline of National Income accounting and a bottom line. The bea also for those of us who are austrians who believe in disaggregating the economy and looking at industry by industry sector by sector. And delighted thatted bea introduced gross output by industry to dig segregate the economy and based on stages of production. So based on this announcement, i wrote a lead editorial commentary in april 2014 in the wall street journal at last a better economic measure. And they came out with a new third edition of my production. Basically my book structure of production was had virtually disappeared nobody was reading. But suddenly when the government starts using this statistic, it is come of obscurity and now it being used in in being read and what can we learn from the new go . K you may ask yourselves well so what . So what that theres a new statistic. Well first of all you can see that gross output from this statistic is much more volatile. Its a much better indicator of the Business Cycle. You can see here that gross output especially during the recession of 2008, 2009 how it dropped precipitously gdp in nominal terms declined 2 is that an ac rat reflection of what happened during the Great Recession . Not at all. But you can see in terms of gross output and see what happens in the intermediate stages,s thrftion a significant drop that is better evidence of what is going on. So according to new geo molds everythi