>>What if a car firm doubles the horsepower of a car and sells it… Does the increase in horsepower and fall in price add to economic activity and GDP growth? Everybody would regard this as ludicrous. But that is what is being done with computers.
GDP is supposed to measure economic activity. …To be economically relevant, it requires a related income flow. But except for the $7.6 billion in current dollars, by >>which spending on computers actually increased, those $87.6 billion which the computer component added to US real GDP growth in the first half of 1999 are purely statistical fiction. It suggests "real" growth that has in no way taken place. All this is so absurd that we can’t help but to think of it as statistical fraud. - Kurt Richebacher, The Richebacher Letter, 12/99<<
remember, the $87 BILLION in add'l phony dollars was for 6 months. 2h 2000 was even more if i recall correctly.
>>That so many economic and financial experts let themselves be fooled by such plainly ludicrous statistics is hard to believe. Yet there are two obvious reasons: general ignorance of the actual facts and an overwhelming prejudice and wishful thinking.
As to ignorance, it has to be realized that the reported computer data are, in general, virtually unknown. To find them, [analysts] need availability and study of the Commerce Department’s quarterly GDP reports in full detail of which… hardly any economist can be bothered. Most are satisfied to glance over the brief extracts offered by various financial services (Bloomberg, Reuters, Datastream) or at athe sparse numbers published by the media. …What are the famous words of Keynes? "Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally." - Kurt Richebacher, The Richebacher Letter, 12/99<< |
