>From: Doug Henwood <dhenwood at panix.com>
>Reply-To: lbo-talk at lists.panix.com
>To: lbo-talk at lists.panix.com
>Subject: RE: small not beautiful
>Date: Thu, 28 Sep 2000 12:41:53 -0400
>
>jan carowan wrote:
>
>>By the way, I note that Mr Wray, Mr Henwood and you seem not
>>interested in the question of whether the productivity measures or
>>consumer price index is biased against the high technology
>>revolution.
>
>Biased against? The productivity numbers are, if anything,
>overstating the tech revolution (a topic dear to my heart, as the
>author of a book called A New Economy?). The price adjustments have
>high-tech output rising at a 50% annual rate, which strikes me as
>implausible.
Mr Henwood, you provide no grounds for this conclusion. During the past 25 years, the cost of computers has dropped approximately one millionfold. Yet the BLS shows merely an annual drop varying between 14.9% in 1992 and 6.7% in 1994. In 1998, the government finally recognized that computer prices were dipping 40 percent per year. But meanwhile, the spearhead of real price reductions shfited to a collapse in the price of communications, which is mismeasured as a modestly declining cost of long distance voice telephony.
But industrial output outside high-tech is rising at a
>2% annual rate. Since employment is roughly flat in both sectors,
>these translate into equally lopsided productivity figures.
>Productivity in heavy computer-using services is rising at extremely
>unimpressive rates. Of course the optimistic thing to do would be to
>redefine the measurements, and presto, reality would look much more
>pleasing.
I have given examples of how and why productivity is indeed underestimated in the brokerage and banking industry--no reply. Through Mr Forstater, Mr Wray simply replied that an increase in shares traded does not register in GDP--which was completely question-begging. The Popkin and Co. report indicates why industrial output is being underestimated. Again no reply. You simply scoff at these reasoned attempts to redefine the measurements. In the FT, Mr Grant recently argued against the American use of the hedonic price index while alleging that its inability to truly capture product innovation leads to an overestimation of productivity increases! As I said to Mr. Forstater, the more revolutionary the new economy, the more painful the adjustments and the less pleasant reality should soon be. So I do not understand the logic of your argument at all. It should be noted that the inevitable downturn period for adjustments will most probably be prolonged by anti business tax and regulatory policy forced upon the American people by leftist business observers and their ilk.
>Can't speak for anyone else, but I am all for technology, as most
>Marx-tinged leftists are. I doubt, though, that Moore's law is
>contributing much to the 40-something million Americans without
>health insurance.
And what exactly does that have to do with your rant against the new economy. The problem of health insurance predates the new economy. However the recent bottom up income gains do not.
I am also all for self-promotion, so no dissent
>there either.
It seems that you are deaf to the contradictions in your self promotion. I assure you that they cannot be missed by those not among your disciples here.
JC
_________________________________________________________________________ Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com.
Share information about yourself, create your own public profile at http://profiles.msn.com.