Recently, we all have been bombarded by
the "Good News".
And the "Good News" is that productivity
seems to be riding a rocket ship to the moon
as 2001 fourth quarter productivity was
revised upwards to a 5.2% rate !!!!
As well, GDP in Q4 was reported to have
risen at a 1.39% yearly rate, this at a time
where hundreds of thousands of people
were laid off, airlines were nearly shut
down, imports and exports dropped and the
general economy activity dropped around
the nation.
Indeed it would seem that nirvana has
arrived. What the pundits fail to mention is
that "labor Non-farm Business"
productivity was so good mainly due to a
rise of 1.2 % in the output rate AND a
FALL of 3.8 % rate in hours worked.
Please put your seat belts on now, as the
"Good News" only gets "better":
Manufacturing productivity was up 4.1%
for the same quarter. While output
DECLINED at a 6.7% annual rate, hours
worked DECLINED at 10.4% annual rate.
If that was not enough, non-farm business
productivity increased at a 1.9% rate in
2001, while output increased at a 0.9% rate
and hours worked DECREASED at a 0.9%
rate.
It even gets better with Manufacturing
productivity, which was up at a 1.1% clip in
2001, while output FELL at a 4.3% rate
and hours worked FELL at a 5.3% rate.
So you see now, how the system works....if
we need to improve "GDP" and
"Productivity" in any given quarter we just
need to fire some workers, say 500,000 or
so for good measure, then we just need to
have a BIG fire sale of cars at 0% interest
rates, and then we just sit tight on the price
of oil through derivatives, arm twisting and
manipulations to force a negative inflation
rate into the equations so that it "appears"
as if we have actually more output.
Last, but not least, we need to "infuse" a
couple hundred billion of freshly created
dollars into the aggregates and another few
into the international banking system.
Presto chango !!!! we could be hired any
minute by the Fed or by the government in
order to help them devise more creative
ways to cook the books and DECEIVE the
economically illiterate general population.
We even have right now very important
people saying that last year's recession
"maybe" never occurred and others saying
that the recovery is "well under way".
Who do you believe ? The one that says
that yesterday never happened or the one
that says that today is not happening ?
These people don't even bother to
cross-check their stories between
themselves.
Maybe we need another major disaster this
quarter so that we can have some more
rising GDP and Productivity figures !!!!
Let us put the data in other ways:
While the Multifactor productivity, which
tries to account for the resulting output
based on the combination of several inputs,
seems to be increasing, the assumptions
made to support these results are wrong,
since they do not account for the looting of
the infrastructure of the economy or of
other countries for that matter.
Multifactor productivity measures reflect
the joint effects of R&D, New Technologies,
economies of scale, management skills and
organizational changes, etc. It tries to
measure the anti-entropic gain in the
economy, which we have attempted to
describe in previous essays.
While Output per Hour is up from an index
of 89 in 1989 to 107.9 in 1999, a GAIN of
21.2% in 10 years, we have that Output per
Unit of Capital (capital defined as
equipment, structures, inventories and
land) dropped in the same period from an
index of 100.8 to an index of 98.1 or -2.7%.
So it would seem, as if output is
increasingly INTANGIBLE or UNREAL,
because how can you have a continued
increase at a 2% annual average when you
need more capital in order to produce it ?
Put in other words, the decreasing
productivity per unit of capital can only
mean that we need increasingly more
TANGIBLE or REAL or PHYSICAL
capital in order to produce a given output.
What this is telling us directly is that we are
degrading the infrastructure and we are
not growing, but going backwards.
In effect the exchange value of the labor is
being surreptitiously undermined in order
to try to maintain a sense of normalcy with
the use value of said labor.
The reader can see clearly that effect in the
increasing number of families in which
BOTH parents HAVE to work in order to
make ends meet.
This is the OVERALL DECREASING
LIVING STANDARD we are all putting up
with now.
The Delusion of the masses is getting larger
and larger as the economic literacy
continues to drop by the day. This of course
goes hand in hand with the current massive
moral degeneration.
Meanwhile, worldwide events suggest an
unpleasant war mongering scenario coming
from the politicians and a brewing energy
and commodity inflationary crisis coming
from the real economy side which wants
higher parity prices in order to jump-start
real production and diminish the
Conceptual part of GDP which is
constricting and looting it.
In these times of uncertainty, market and
information manipulations, war threats,
inflationary and depressionary collapses
and derivative meltdowns, it makes sense to
be prepared with REAL MONETARY
ASSETS.
It also makes sense to start using Reason,
which is the ONLY gift of humanity apart
from Love, and which we seldom use. |
