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To: Les H who wrote (58621)	1/17/2001 1:02:01 PM
From: GraceZ	Read Replies (3) \| Respond to of 436258

I used the car as an example to support the government assumption that people will substitute cheaper when prices rise. The used was 3 years old with 40k miles , but it was a much better car. I realize that you have to compare apples to apples as well. As in my example of the airfare from 1978 and wages I pay my workers. You have to admit the computer example is a stunning example of how some things are getting magnitudes better and cheaper at the same time. How do you account for that when measuring output, you can't simply ignore it, can you? It's not just buying computers outright, it's how they are used in producing goods. If you look at furniture now you can see how they are using CAM to produce effects with wood that only a highly skilled craftsmen could produce in the past. Inexpensive furniture is magnitudes better than stuff from ten years ago. The environmentalists are blamed for the loss of jobs in lumbering operations.....but if you saw what automation has done in that industry you'll see that two men can do what used to take twelve with the new machines. These kinds of improvements only became possible with cheap abundant processing power. It's caused a deflation in the price of a lot of goods. Go shop for a TV if you don't believe me. You will be shocked and astounded at how cheap a standard color non-digital TV is now. Target was selling a 10" B&W TV for $5 the other day. I paid more for a sandwich yesterday. The problem with you guys is that you don't shop and you are basing your observations from the price at the pump. I would almost venture to guess that gasoline as a percentage of income is lower now than it was when gas was $.35 gallon. Everyone complains that medical expenses have risen so hard and fast....yet anyone can get a freakin organ transplant now and walk out of the hospital five days after heart bypass surgery.

To: Les H who wrote (58621)	1/17/2001 7:56:59 PM
From: Thomas M.	Respond to of 436258

Two great posts on your part, both of which I think went right over the heads of the intended. If computers really do improve productivity of their users, let it show up in the improved production numbers of those users. The problem is not that GDP and CPI numbers are flawed and need to be properly adjusted by the government. The problem is that technocrats like those at the Fed and the World Bank tend to worship numbers like GDP. For example, South African blacks likely had their GDP rise dramatically after the opening of the diamond mines. However, their social order was disrupted. Another example is that pollution restrictions improve quality of life, even as they hurt the economy. Trying to measure these changes is the height of arrogance. Tom