freeus, inquiring minds want to know! :-) that is good. i will try and find a link that explains it in depth. in the meantime, let me cover a few highlights.
the use of computers didn't add to gdp the way that greenspan and crew intuitively anticipated that it "should." since they didn't get the REAL results they wanted, in the mid 1990s they introduced "chained" dollars. they are a way of "monetizing" increased processor speed into "gdp dollars." since processor speed increase extremely rapidly, this has yielded HUGE amonts of "dollars" (not real, rather statistical) that make up nearly 50% of gdp growth.
take away these fictitious dollars and it then "productivity" improvements above historical norms disappear overnight. if productivity isn't driving this bull market and "new paradigm," then what is?
the answer is clear. credit creation and dissavings. nobody talks about those because they are not sustainable.
as for intuitive productivity improvements -
1. nobody counts the lost productivity due to trading stocks or shooting the breeze DURING WORK HOURS. etc, etc, etc. i've observed a lot of card games being played in my time, too ;-)
2. if i have one employee and make $100, purchase a productivity improvement and then need 2 employees to make $100, did i improve my productivity in an economic sense? (i inefficiently made $100 per employee and now i make efficiently make $50 per employee). ultimately supply and demand RULE.
the semi industry is a great example. they were many times more productive when their revenues were half of what they were when they were relatively inefficiently, in 1995.
folks are busy and they oversimplify issues. there is a saying. "there are simple solutions to complex problems (or issues). they are ALWAYS wrong."
if the results are counter to their belief system, they don't try and understand the dynamics that led to unexpected results. that would be work, after all. they do change the numbers as that is easy. and in their vested self interest.
then they don't make it obvious and wall street doesn't educate you. it is not in their self interest to do so.
but, repeating the mantra over and over does not make it true.
i'll post the link as soon as i get it.
good luck in your search for knowledge and understanding. we may not agree, but you, unlike most, will make INFORMED decisions. |
