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To: BGR who wrote (17924)	10/31/1999 11:22:00 PM
From: Cynic 2005	Read Replies (5) \| Respond to of 18056

<<In today's economy, wealth is dictated by technology driven productivity and freedom to trade and innovate. >> Keep that "new era" crap in your locker. Or, go and sell it to those on the Dell thread or Intel thread - there are several folks out there who would love to be lied to! -ng- prudentbear.com <<Last night, Greenspan spent considerable time espousing the incredible virtues of today's technology and information-based economy, stating clearly that he sides with the view that our economy has experience a paradigm shift in greater productivity. This is quite interesting, as the productivity issue has become a key focus for current economic debate. Just Tuesday, Federal Reserve Bank of St. Louis President William Poole stated that productivity improvements outside of manufacturing are "downright tepid." Continuing, he states, "The last few years have certainly seen stronger labor productivity growth. But if we look at the data in more detail, things don't look as reassuring. It appears that growth of total factor productivity has not increased…Although the workers who produce computers have become immensely productive, the overall productivity data don't seem to support the idea that computers enhance productivity growth." Here, Poole is endorsing the excellent analysis of Dr. Robert J. Gordon of Northwestern University. Gordon has studied the data extensively and has come to the conclusion that the consensus analysis of major economy-wide productivity improvements, emanating from new technologies, is simply erroneous. In fact, it is little more than myth that new technologies are fostering general productivity gains. Instead, almost all of the reported productivity improvements are derived specifically from the actual production of technology hardware and software. From the July 12th Business Week, Gordon states "there has been no productivity acceleration at all in the 98.8% of the economy located outside of computer and related technology manufacturing." This is quite important analysis as it strongly refutes the notion of a "new era." As such, it is certainly our view that a historic bubble in technology spending has led to widespread distortions. Clearly, this boom has had a major effect on the financial markets, and we also believe there has been a profound, if misunderstood, impact on the real economy. And we certainly side with Gordon and Poole who realize that the so-called technology-based miracle economy is much more hype than reality. It is just very unfortunate that Fed Chairman Greenspan sees it differently, having become the leading cheerleader for the so-called "new economy.">> I know you will mock at it because Tice wrote the article. But, he was only quoting one of the bubbleheads.