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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 230.84

-0.7%

Dec 31 3:59 PM EST

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To: GST who wrote (129441)	8/1/2001 12:58:21 PM
From: Skeeter Bug	Read Replies (3) of 164684

>>. So the chain-weighted term refers to weights which change the impact of computer technology investments to reflect changes in processing speed -- is that right?<< gst, processor aand memory speed, yes. keep in mind that the weight given is based on someone's personal opinion (this is subjective - almost everyone would devise a different system of weightings if given the task of doing this). >>I have always paid about the same dollar amount for every computer I bought in the last 20 years -- but each one is "better". So in a chain weighted world these product improvements are captured as productivity improvements. Hmmmmmm.<< the change took effect in 1996 so pre 1996 the adjustment wasn't made. here is the crux of the matter: something is more economically productive if it increases the gdp/hours worked ration. IF faster computers did this then the old system captured it perfectly. all economic productivity benefits were already properly accounted for. the issue here is that alan just flat out didn't like the results he saw so he added fake dollars to goose the figure to a level he thought was appropriate. if you invest in a machine and it 1. doesn't increase output and 2. doesn't reduce labor then did you increase productivity? alan says YES! just call the machine a computer and change the measurement system. VOILA - a HUGE productivity growth (reported, not actual) is created out of thin air! the problem arises in the fact that the buyer of the machine can't improve his standard of living b/c he can't spend chain weighted dollars - even though reported productivity is skyrocketing! the net effect is that reported productivity is faked higher - and that is all that occurs. there are no other benefits. it gets even better when they compare current productivity under the new system to old productivity under the old system and make claims about growth. the comparison is apples to oranges and intellectually dishonest. same holds true for comparing us productivity to foreign nation productivity - the system of measurement is just plain different and not comparable. POOOOOOOOF! the economic miracle, the new economy, VANISHES, when it is put under the light of TRUTH.

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