>Mr Henwood, you provide no grounds for this conclusion. During the
>past 25 years, the cost of computers has dropped approximately one
>millionfold.
The output of computers isn't megaflops, it's the useful manipulation of data. I doubt the average user feels 20% more productive than last year.
> Yet the BLS shows merely an annual drop varying between 14.9% in
>1992 and 6.7% in 1994.
Where? They only started reporting PCs in the CPI in 1997, and that price index is off 20% over the last year. The implied deflator in the BEA's computer output measure is off 18% a year since 1987, and around 20% over the last year.
> 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.
You know, government statistical geeks aren't stupid people. But no doubt you're much much smarter than they are.
>I have given examples of how and why productivity is indeed
>underestimated in the brokerage and banking industry--no reply.
Ever take up your concerns with a BLS economist? They're very accessible - call the number on the latest productivity release and have a chat.
> Through Mr Forstater, Mr Wray simply replied that an increase in
>shares traded does not register in GDP--which was completely
>question-begging.
So you're claiming that faster share turnover is an improvement in human welfare? Even though nothing is produced as a result?
> 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.
<yawn>
>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.
They were a lot better in the days of the Old Economy. But that's history, which involves books, and all that tedious stuff.
Doug