Redefining productivity, Soviet-style.(Insider Report)

In his September 9th column, New York Post economics writer John Crudele addresses a puzzling economic anomaly--the ongoing "jobless recovery." Job losses continue, despite a resurgent stock market and reports of robust growth in the Gross Domestic Product. According to Bush administration shills like Rush Limbaugh, job growth is always a lagging indicator of an economic recovery. But as Crudele points out, the real culprit here is the Federal Reserve's Soviet-style method of calculating economic growth.

"As Wall Street continues to re-inflate the [stock market] bubble, this one troubling question lingers for those who are blowing air into the stocks: Why aren't any jobs being created if the economy is improving as much as it is?" writes Crudele, who answers himself: "Maybe there are no jobs being created because economic growth is still dismal." In recent weeks, Fed Chairman Alan Greenspan and the Bush administration have insisted that productivity has risen dramatically because "the United States was becoming a more efficient producer of goods." However, a revealing statement made by Senator Robert Bennett (R-Utah) in a September 5th television interview "may call the whole productivity miracle into question."

"If you go back into the 90's and Alan Greenspan's ...