The problem is that hedonic crap (see Jim Grant's comments below)
And dont forget if you buy into the investement in capex, someone produces those products and someone has money to spend etc.
LOL! Good one. Just remember, Kudlows are properly taken with many grains of salt. If you followed his recommendations too closely you'd have been broke last year. What a shill... Like a stopped clock he's right sometimes, and may be right now, up to a point. My investments have done much better avoiding cheerleaders like that.
Stop reading krugman--you will feel better. Take two kudlows and call me in the morning.
cumber.com
Grant on Hedonics:
“So what effect does this scenario
have on the statistics? For one thing,
obviously, inflation will be under-stated,
because the government aver-ages
a lot of huge price drops for com-puters
that really only had small price
drops. The other side of the coin is that
growth will be overstated.
... Therefore, real output
growth, and anything derived from it,
is overstated. Productivity appears to
be growing quickly, and anything ‘real’
in the national accounts—real GDP
growth, real profit growth, real con-sumption
growth, etc.—is actually less
sources: James Medoff and Andrew Harless |
