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Thursday, September 22, 2011

Words have meanings Ms. Maddow

When you, yes you, Ms. Rachael Maddow, have a nationally syndicated television show, and you want to talk about the news and economics, you better know the meaning of words.

 She graduated college with a doctorate from Oxford...
Must be some British diploma mill...

Tonight she compared the combined net worth of the Koch Brothers (combined net worth of $50 billion) with the gross domestic product [GDP] of several nations. She declared "the Koch brothers have more money than..." those nations, as a list of several countries crossed the screen.

That simply isn't true. As it turns out, Rachael Maddow doesn't know the meaning of "Net Worth" or "Gross Domestic Product."

Gross domestic product is the final market value of all goods and services produced within a nation in a single year. Net worth is the total market value of all assets less liabilities. Assets include cash but also includes stock, bonds, and other things like homes. Liabilities are your debts.

In other words, net worth is the value of what you have accumulated over your lifetime, less debts. GDP is the value of what is produced in a single year.

 Rachael, buy one, you can afford it!

Notice she's comparing the value of what is produced to the value of assets less liabilities. She is making an apples to oranges comparison - it is nonsensical, illogical and wrong. It is like comparing the value of all Ford cars produced in 2011 with your retirement portfolio and house. Take note, Ford will produce another batch of cars next year and you will most likely have the same retirement portfolio and home (which may or may not have gone up in value).

In no way, shape, or form, is she actually comparing who has more cash (especially since the Koch brothers don't even have $50 billion in cash as most of their net worth is in the value of their family company and stocks they own - both of which only hold value so long as people are willing to buy the products their companies create).

To make an accurate comparison she would have to compare the Koch's $50 billion combined net worth with all the stocks, bonds, cash, value of homes, etc of every person within each of those countries. She didn't do that.

Words have meanings - apparently Maddow didn't learn the meaning of these two words at Oxford or in the real world.