During the '90s, when Greenspan kept supplying funds to the economy, he marveled about how "productivity" was keeping the lid on inflation.
He spoke of "productivity gains" as a sort of mysterious blessing, not knowing how long the gains would continue, nor where they came from. But was he causing the productivity gains? As long as people keep buying stuff, won't technology, better work organization, and other productivity gains keep coming? In other words, isn't productivity a function of consumption? So as long as Greenspan fed in the funding of consumers (via easy credit, 100% mortgages, sub-prime mortgages,cash-out mortgages, etc.) productivity would roar on? What are your thoughts? Gene Coyle
