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Today’s revisions to the second quarter’s figures on gross domestic product (GDP) growth conveniently provide an opportunity to comment both on the vital issue of the quality of that growth, and on a related subject raised by one of the most boneheaded points raised recently by a Mainstream Media Journalist (a high bar as most of you recognize).

The quality of growth matters decisively for the U.S. economy because a prime lesson Americans should have learned once the financial crisis struck (but in too many cases didn’t) is that the wrong kind of growth (e.g., fueled by mutually reinforcing credit and housing bubbles) eventually tends to crash and burn. That’s why President Obama deserves lots of credit for speaking about the need to create a U.S. economy that’s “built to last.”

As per previous posts, however, it’s hard to spot much progress being made by the U.S. economy toward this vital objective, and the new GDP numbers leave that problem essentially unchanged. Once more, let’s look at the share of the economy taken up by personal consumption and housing together – the toxic combination that inflated most of the bubble.

The new figures show that these two sectors made up 71.30 percent of gross domestic product after inflation. That’s a smidgeon better than the 71.34 percent recorded in the advance estimate of GDP, which was released last month. (A third and “final” – for a while, anyway – estimate will come out next month.) But it’s higher than the 70.94 percent level in the second quarter of 2009. In other words, the recovery has rendered the economy even more consumption- and housing-heavy.

Even more troubling, the economy is more consumption- and housing-heavy than when the last recession began at the end of 2007. Then, those two sectors comprised 71.16 percent of real GDP, and according to the President, the economy at that point was definitely not built to last. The trend only looks good when the latest data are compared with those at the height of the previous decade’s bubble – the 73.24 percent of inflation-adjusted GDP taken up by housing and consumption in the third quarter of 2005. And this improvement looks all the less impressive given that now everyone with a lick of sense now understands that the economy was on an insanely reckless course at that time.

Wall Street Journal chief economics correspondent Jon Hilsenrath showed in a post Tuesday that he’s thinking about the quality of growth, too, which is encouraging. If only his thinking weren’t so inanely ignorant. Hilsenrath bemoaned how little growth since the end of the recession has been fueled by “ideas” – meaning what the Commerce Department calls “intellectual property products.” These products consist of “Expenditures for research and development (R&D) and for entertainment, literary, and artistic originals.”

What has upset Hilsenrath so is that business investment on intellectual property products has risen only by 17.18 percent in real terms during the recovery, whereas investment on business equipment has surged by 58.30 percent. His interpretation? “American firms have been investing much more aggressively in stuff than in ideas in this upturn,” and he concludes that “An ideas-driven recovery would be…more encouraging.”

The author doesn’t explain his reasoning, but it looks like he views creating a movie as being more valuable than producing a machine tool. And here’s why such (widespread) views are so utterly goofy – at best: It’s not because machine tools etc are in fact necessarily more valuable than movies. It’s because machine tools – and other types of business equipment and manufactured goods more generally – necessarily incorporate lots of intellectual property (i.e., “ideas”). And these ideas come both on a product side and on a process side. Unless Hilsenrath thinks that these devices, along with aircraft and semiconductors etc, result from mindless brutes wielding hammers and bellows and working from blueprints that come from – actually, where does Hilsenrath think the blueprints come from?

The flip side of course is true, too. The creation of many intellectual property products often requires lots of what Hilsenrath dismisses as “stuff.” In fact, the author would know this had he read one of the Commerce Department’s announcements of the decision to track intellectual property spending in its GDP data. The first example of such investment is the development of “a new cancer drug.” In other words, a manufactured good. Which was conceived with the help of major investments in laboratory equipment.

Of course, maybe Hilsenrath isn’t entirely to blame for drawing such sharp distinctions. At the least, the government’s very decision to break out intellectual property spending from other types of business spending strongly encourages this practice. At the same time, the observations in this post aren’t exactly rocket science. But they do spring from something that’s vital to economic (and analytical) success even though it’s not tracked (yet) by the Commerce Department – common sense.