“Adam Ruins Everything (Season 2, Episode 11: Adam Ruins the Economy)” (2017)
Explaining economic concepts and measurements of how well economies are performing to the general public in the space of 20 minutes is a tall order so this episode of “Adam Ruins Everything” deserves praise for trying. Firstly host Adam Conover explains why US taxpayers are forced to fill in their income tax returns in the most time-consuming and agonising ways possible when the US government already knows to a large extent how much most taxpayers are earning and how much tax they are paying (or should be paying) thanks to information sent to the Internal Revenue Service by employers and banking institutions, and to pay-as-you-earn withholding taxes. Conover says the US could adopt a return-free tax filing system that would enable US taxpayers to file income tax returns in a few minutes and send them off but due to lobbying by companies that work out and prepare tax returns for their customers (that is, US taxpayers), Congress ends up rejecting legislation proposing such a system or similar.
Conover then takes his new pal, the recently laid-off factory worker Hank (Marlon Young), on a trip where he explains to the increasingly astonished ex-worker why economic and stock market performance measures such as GDP (Gross Domestic Product) and the Dow Jones Industrial Average are not really accurate guides as to how well the economy or the stock market is performing. GDP only really tells us the market value of the total goods and services produced by an economy in a given period and actually says nothing about the well-being of most people in that economy; a far better measure of people’s well-being is GDP per capita by purchasing power parity (which controls for differences in the cost of living and, when comparing living standards of various countries, in the exchange rates of their currencies). The Dow Jones measures how the stock prices of the 30 largest public owned companies have traded in a given period; in that respect, the index is not an accurate measure of how healthy the US economy is, especially if some of the 30 companies have heavily traded (and thus highly priced) stocks which then influence the index more than they should.
Conover also tackles the US government’s definition of unemployment and finds it doesn’t include unemployed people who have given up looking for work or people who might be underemployed (that is, they are working in jobs that are beneath their qualifications and experience levels, or in part-time jobs when they would prefer to be working full-time). Finally he explains to Hank why he is not likely to find another manufacturing job that is the same as the last job he had or his father had: for one thing, American manufacturing industry experienced a Golden Age from 1945 to the early 1970s, supplying 50% of the world’s manufactured products, due to everyone else around the planet recovering from the ravages of World War II; and secondly, China – the world’s pre-eminent manufacturing economy – enjoys advantages (such as being located on the Eurasian heartland that puts the country at the centre of a supply chain network) that the US can’t gain or create. China also invests far more in educating and training workers than the US does.
While much of what the episode has to say can be contentious – particularly in the segment on how the US has lost out to China in manufacturing and the effect of automation on the demand for workers in manufacturing – it deserves credit for trying to explain clearly in a matter of minutes some complicated and controversial issues. Unfortunately the last couple of minutes in the episode rush by in a patch-up job about retraining schemes to cheer up Hank and those viewers who identify with him.
Much more could have been said on how the US lost out as the world’s major manufacturing nation – spending money on wars and military toys when the US could have spent the same amounts on basic education and on colleges aimed at retraining the unemployed and upgrading their skills goes unremarked – and at times the episode comes perilously close to China-bashing. Nothing is said about how the Chinese provided a low-cost source of labour in the first place and the historical circumstances before 1978 in China that made the country such an attractive place for Western firms to offshore their manufacturing. Anyone want to know about the devastating effect the Cultural Revolution had on China from 1965 to the mid-1970s?