Wall Street Journal: Don’t Trust the Feds’ Happiness Index

My piece in Monday’s Wall Street Journal on one of the more ludicrous recent efforts to redefine reality…

Wall Street Journal

Don’t Worry (About GDP), Be Happy
With the economy slow and joblessness high, the feds want a new way to measure well-being.

by James Bovard

In recent years, numerous experts have declaimed that the gross domestic product is a flawed measure of whether citizens are truly thriving. President Obama’s designee for World Bank president, Jim Yong Kim, for example, warned that “the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”

In light of this growing concern, the Obama administration is financing research to devise a new measure of happiness. A National Academy of Sciences panel is analyzing proposals for surveying Americans’ “subjective well-being” to guide federal policy making. But constructing a federal happiness index would be a tricky undertaking.

The Census Bureau is advising the happiness survey panel. Measuring moods is far more difficult than counting people, but Census doesn’t even do a good job of that—as I learned working for the bureau in southern Illinois in 1980. As long as census takers didn’t get arrested for drunkenness or public indecency and returned at the end of the day with a stack of filled-out forms, the bosses were satisfied.

There are other perils to be considered. Would the feds manipulate happiness statistics like they jigger the unemployment rate? If someone failed to actively seek joy during the previous six-month period, would they be formally excluded from the official count? Would government officials invent “seasonal adjustments” to disregard month-to-month swings in reported despondency?

Another question worth pondering: Is there any reason to expect a federal happiness index to be more credible than the inflation rate? Would official mood surveys disregard any unhappiness felt by middle-aged men losing their hair—the same way the Consumer Price Index often ignores jumps in housing and food prices?

The Bureau of Labor Statistics now reduces the official inflation rate by “hedonic adjustments” purportedly related to the rise in quality of consumer products. Perhaps the feds could then ratchet up the reported happiness rate by imputing the extra contentment that would exist if people actually recognized all the wonderful things government did for them.

At a Brookings Institution workshop last November, leading happiness-survey experts (including National Academy of Science panelists) suggested that “policy makers may want to educate the public and present metrics so that a growth in well-being from, say, 7.2 to 7.4 provides as much meaning as would a 2 percent growth in GDP.” Could the presentation of such metrics “educate” people to the point that it distracted them from the misery they suffered in recessions? Probably not, unless accompanied by massive doses of Prozac.

Anyone who still reveres federal statistics should remember the “multipliers” of the past few years. We were told that every dollar spent on the 2009 stimulus package would produce $1.57 in economic activity. That every dollar of food stamps “generates $1.84 in economic activity.” That every dollar of unemployment benefits begets a $2 increase in economic activity. According to those formulas, a robust recovery arrived two years ago.

With “subjective well-being” surveys to guide federal policy-making, might we be assured that deficit spending automatically has a “happiness multiplier” of 2.4? The proliferation of such multipliers would be limited only by the number of social scientists eager to receive federal grants to produce them.

Politicians will use happiness surveys as a trump card against any attempt to limit spending. Suppose an inspector general’s report obliterates any sober justification for a program’s existence. Congressmen can respond by invoking survey results showing that lofty rhetoric about the program’s noble intentions spurs a wave of mass contentment. Make-work boondoggles like AmeriCorps could be magically transformed into “make happiness” triumphs.

A common saying during the 1930s was that “we cannot squander our way to prosperity.” Similarly, we cannot statistically delude ourselves to national happiness.

Mr. Bovard, the author of “Attention Deficit Democracy” (Palgrave, 2006), is working on a memoir.