“The economy is looking up, and that’s a challenge for the Federal Reserve.” Those are the words of Hoover Institution visiting scholar Mickey Levy. We must be a really rich country, or something like that… Too many people working and too many businesses prospering is a challenge?
The answer to the above question is that prosperity is a problem to economists. That is so because economists near unanimously believe against all logic and evidence that economic growth causes prices to rise. Levy and his fellow PhDs get the effect of economic growth exactly backwards.
Rising productivity is just another term or phrase for economic growth. And rising productivity is a consequence of a growing number of hands and machines cooperating in the production of exponentially more in the way of market goods. This is basic stuff. Think the pin factory Adam Smith was reporting on back in the 18th century. One man working alone could maybe produce one pin per day, but several men working together in specialized fashion could produce tens of thousands.
Read the entire article at Forbes
