That argument used to be common. Unfortunately, it makes too much sense. I have not heard it proposed for decades.
On Fri, Sep 21, 2007 at 02:39:59PM -0700, Eugene Coyle wrote: > 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 -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
