Productivity

[mjkst27]

I'm trying to wrap my ahead around the idea of productivity in the economy, so I recognize all the ramifications.

 

We know that the recent high productivity growth is impacted significantly by many companies laying off workers since they are not pursuing growth in this environment. They are waiting for confirmation of economic recovery before looking to expand and rehire. This is not the "good kind" of productivity for the economy.

 

It would seem to me that increasing productivity is good only in an environment where there are other projects and opportunities into which marginal (excess) labor and capital can be put to work. Otherwise, the excess simply goes idle, depressing aggregate demand. I really think this is the environment we are in today. What is the new driver of economic growth? What's the next big thing that everyone is going to be spending their money on, and in turn will be providing workers with the money to spend in the first place? Is it homes, cars, boats, atv's, computers, enterprise software, cell phones, PDA's?? I doubt it. What's the buzz out there? What's the next killer app, be it software or realworldware?

 

Looks like what we need is a good old fashioned productivity slowdown.