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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (51473)	1/26/2006 7:36:10 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 110194

Digital photography. I can do things at home that even a professional would not dream of doing 20 years ago. It is entirely new way of doing things. It is not only productivity gain, it is a rapid shift. I can attest to tremendous increases in productivity in my line of work as well. No longer i have to call a broker and wait until he answers his phone and ask him how he's doing. I can execute transactions in fractions of a second, 24 hours a day. My cost for trading 2000 shares of stock is $12.50 as opposed to $39.95 for 100 shares (at a discount broker). My cost of trading half a million dollars worth of gold is exactly $16.10 per trade. No longer i have to store chart books floor to ceiling, i can scan charts in multiple time frames in thousands of instruments in seconds. In the old days one had access only to daily or weekly charts. With internet, i can do research for free, that wasn't even available to individual investors. I don't have to manually enter every transaction to do my taxes, the trades are tabulated automatically by my broker. And i don't have to wait for tomorrow's paper to check stock prices. There are a lot of other areas that we had incredible productivity gains, all because of the PC and the internet. But you cannot extrapolate productivity gains and progress in your narrow field of work into the economy as a whole. A friend of mine works in IT in a financial firm. He earns in excess of 150K for at most 100 minutes of effort a day, which leaves him enough time to surf the net, write, read and drink coffee. Is it because of increased productivity or his superior skills as a problem solver or maybe his position is corporate "fat"? On the other hand there are many industries that cannot increase productivity that easily and rapidly: construction, manufacturing, mining, transportation, customer service, technical services, waste management, utilities, health care, leisure, media, entertainment, retail, repair and installation, renovation, education and training, security and protection, wholesaling etc While every industry group has benefited from the use of the computer, those are one time shifts in productivity. Your industry is a tiny part of the economy. Products have to be manufactured, transported, marketed, sold, serviced. Many services require on-site presence. Tremendous inflation in recent years and the way it is measured has contributed to a situation where some inflation is captured as "productivity growth".