(The Blaze/AP) — Ben Bernanke wants to know if you are happy.
The Federal Reserve chairman said Monday that gauging happiness can be as important for measuring economic progress as determining whether inflation is low or unemployment high. Economics isn’t just about money and material benefits, he asserted. It’s also about understanding and promoting “the enhancement of well-being.”
Bernanke and Fed policymakers rely on reports on hiring, consumer spending and other economic data when making high-stakes decisions about the $15 trillion U.S. economy, but according to Bernanke, “we should seek better and more-direct measurements of economic well-being,” as well.
In a video-taped speech for a conference of economists and statisticians in Cambridge, Mass. Monday, Bernanke said promoting well-being is “the ultimate objective of our policy decisions,” while acknowledging that many people aren’t very happy right now.
Unemployment rose in July to 8.3 percent, and economic growth has slowed sharply from the start of the year. The Federal Reserve Chairman called the recovery “frustratingly slow” when he testified to Congress on July 17. Regardless, aggregate statistics can mask important information about how individual Americans are faring, Bernanke says.
Here is video of his speech, via the Federal Reserve:
Bernanke’s speech Monday was the latest foray into a relatively new specialty in economics known as “happiness studies” that he brought to the public’s attention in 2010.
At the time, he said that research has found that once basic material needs are met, more wealth doesn’t necessarily make people happier.
“Or, as your parents always said, money doesn’t buy happiness,” Bernanke explained. “Well, an economist might reply, at least not by itself.”
In his remarks, Bernanke reportedly focused on the more practical – and difficult – task of measuring a subjective emotion. So far, most efforts have involved surveys in which people are asked about whether they are happy and what contributes to their happiness.
Those surveys have found some consistent answers: physical and mental health, the strength of family and community ties, a sense of control over one’s life, and opportunities for leisure activity.
The Kingdom of Bhutan has been tracking happiness for four decades. The tiny Himalayan nation stopped tracking gross national product in 1972 and instead switched to measuring Gross National Happiness.
Perhaps, on the heels of Elizabeth Warren’s suggestion that America become more like China, Ben Bernanke will soon suggest America become more like Bhutan.
On Monday, Bernanke sketched out a few other questions he would like to know: How secure do Americans feel in their jobs? How confident are Americans in their future job prospects? How prepared are families for financial shocks?
These indicators “could be useful in measuring economic progress or setbacks as well as in explaining economic decision-making,” he explained.
So how does Bernanke define happiness? According to the Associated Press, his definition “might baffle some.”
He called it a “short-term state of awareness that depends on a person’s perceptions of one’s immediate reality, as well as on immediate external circumstances and outcomes.”
It’s not exactly how the classic comic strip Peanuts described it when it said, “Happiness is a warm puppy,” but perhaps Bernanke’s version can be more easily measured in surveys.
Either way– Bernanke will likely receive some criticism for worrying about how “happy” people are in the current economy, when he clearly has a hard enough time with his given job of managing low inflation and full employment.