he shouldn't be worrying about productivity growth. Rather, what's important is profitability trends...
------------------------ Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine > The Bear's Lair: Greenspan's Ponzi Scheme > By Martin Hutchinson > UPI Business and Economics Editor > Published 11/24/2003 5:36 PM > > > WASHINGTON, Nov. 24 (UPI) -- A Ponzi scheme requires three > things in order > to be (temporarily) successful: a massive source of outside money, a > sophisticated PR campaign, bloviating about its glories, and a "magic > mushroom" to make people believe in it. U.S. monetary policy > currently has > all three. > > For those not around in 1920, Charles Ponzi ran a scam in > which money was > supposed to be invested in international postal coupons (the > exchange rate > disruptions of World War I had made it at least theoretically > profitable > to buy Spanish coupons and use them to pay U.S. postage.) The postal > coupons were the "magic mushroom" -- providing the hallucinogenic > ingredient that people didn't really understand, but that > appeared to make > it possible to make fantastic returns. By publicizing the > success of early > "investors," paying back investors who demanded their money, and even > agreeing to be audited, Ponzi created a PR campaign that attracted new > money. By operating in the major money center of Boston, he > maximized the > access to new investors, whose money could be used to pay off > old ones -- > he was taking in $1 million per week at the peak, real money in 1920. > > Needless to say, Ponzi was imprisoned -- one of three prison > terms he was > to serve -- after which he emigrated to Mussolini's Italy, followed by > post-war Brazil, scamming as he went. The equation of > Greenspan to Ponzi > does not suggest criminal intent -- just that many features of current > U.S. monetary policy strangely resemble Ponzi's empire, and > are likely to > lead to similar painful results for all of us. > > With the exception of what seems now like a brief halcyon period in > 1945-73, the last couple of centuries have been full of > British financiers > prognosticating gloomily about the unsoundness of the U.S. > economy. In the > 19th century, this gloom stemmed from experience -- more good British > money was lost down the rat-holes of U.S. state finance in > the late 1830s > and U.S. railroad finance in the early 1890s than I care to > think about.
