What's wrong is that when statistical data interpretation rules societies, disaster results. That's the truth, the whole truth about what's wrong with today's USA; everything else is blither spewed by superficial thinkers.
The fastest way to understand what I've told you is to gather your attention and plow through a lengthy, tortured article by Gwynn Guilford,, who spent six years in China researching their economy and trying to explain it for hedge funds. In her 2018 writing for Quartz, The epic mistake about manufacturing that’s cost Americans millions of jobs, she sets out to explain the thinking that led a majority of economists to misinterpret the statistics they used to interpret the American manufacturing sector. To call what they did a mistake, even an epic one, hardly conveys the disaster that resulted.
Here are a few passages from the writing:
... Manufacturers’ embrace of automation was supposedly a good thing. Sure, some factory workers lost their jobs. But increased productivity boosted living standards, and as manufacturing work vanished, new jobs in construction and other services took its place. This was more of a shift than a loss, explained Bradford DeLong, economics professor at the University of California, Berkeley.
So when Trump won the presidential election, the true-blue data believers dismissed his victory as the triumph of rhetoric over fact. His supporters had succumbed to a nativist tale with cartoon villains like “cheating China” and a shadowy cabal of Rust Belt-razing “globalists.”
But it turns out that Trump’s story of US manufacturing decline was much closer to being right than the story of technological progress being spun in Washington, New York, and Cambridge.
Thanks to a painstaking analysis by a handful of economists, it’s become clear that the data that underpin the dominant narrative—or more precisely, the way most economists interpreted the data—were way off-base. Foreign competition, not automation, was behind the stunning loss in factory jobs. And that means America’s manufacturing sector is in far worse shape than the media, politicians, and even most academics realize.
Here I'll skip over several paragraphs to get to this part:
In other words, the method statisticians use to account for these advances can make it seem like US firms are producing and selling more computers than they actually are. And when the computers data are aggregated with the other subsectors, the adjustment makes it seem like the whole of American manufacturing is churning out more goods than it actually is.
Misreading the manufacturing statistics
It’s this adjustment that is the crux of economists’ misinterpretation of the health of manufacturing. There’s nothing wrong with accounting for product quality. But most economists and policymakers have failed to take into account how adjusting for quality improvements in a relatively small subsector skews the manufacturing output data.
Later in the writing Guilford observes:
Two decades of ill-founded policymaking radically restructured the US economy, and reshuffled the social order too. The America that resulted is more unequal and more polarized than it’s been in decades, if not nearly a century.
In effect, US policymakers put diplomacy before industrial development at home, offering the massive American consumer market as a carrot to encourage other countries to open up their economies to multinational investment. Then, thanks to the popular narrative that automation was responsible for job losses in manufacturing, American leaders tended to dismiss the threat of foreign competition to a thriving manufacturing industry and minimize its importance to the overall health of the US economy.
Guilford stays away from the larger inference, but the tortured tale she unravels speaks for itself. We -- the American society as a whole, not only economists -- have reached a stage where we are simply overwhelmed by our attempts to interpret the shifting and changing statistics we wring from masses of collected data.
We are in over our heads. The awful state of American society reflects this.