>If I have read him correctly, Jha would point to perverse
>de-industrialization, meaning relocation of low productivity sectors
>of US industry abroad without commensurate growth in service sector
>and advanced mfg jobs.
>
1. First of all, if this were true - if low-productivity sectors had been relocated elsewhere without being replaced by other sectors - then by definition we would be left with greater unused resources, i.e., unemployment. Yet the percentage of adults (over 16) with jobs was exactly unchanged from Dec 1996-Dec. 2006 (63.4%).
2. Secondly, why the need for these guesses and hunches? You know, bourgeois economics, whatever you think of it, has produced some extremely rich empirical analyses of the 1995-2005 productivity acceleration.
Try studies by McKinskey - http://www.mckinsey.com/mgi/reports/pdfs/usproductivity/US_Prod_After_Dot_Com.pdf....
...or Robert J. Gordon http://faculty-web.at.northwestern.edu/economics/gordon/Productivity-Brookings.pdf
I'll summarize them for you. The vast majority of the productivity acceleration was due to sharply improved productivity growth in a small number of sectors: retail, wholesale, securities trading, domestic IT hardware production. It was mostly due to technological improvements. It has nothing to do with offshoring low-productivity sectors.
Seth