Intrinsic value: New recipe for the GDP leaves sour taste
Anyone who listens to economists knows the U.S. economy has been doing pretty well, with productivity booming, capital spending on a tear, and cost pressures modest. This is the payback for laying off all those workers. The poor souls may be out of jobs, but look how lean and mean everyone else is.</br></br>Except that now the Commerce Department has changed its mind. It has cooked up -- just what you were waiting for -- a new way of calculating the gross domestic product.</br></br>Breathless as you may be for the math, it's the result that matters. The government (assuming it ever reopens) is about to air-brush its old GDP numbers, and in the process reverse much of the evidence for formerly well-accepted economic trends.</br></br>Growth will suddenly shrink by a half percentage point a year or more. In a $7 trillion economy, that's a lot of shrinkage. What's more, the "productivity revolution" will vanish into some storage cellar of the Bureau of Economic Analysis, or wherever they wind up stashing the old numbers.</br></br>Productivity -- output per worker -- was rising in the '90s at 2.2% a year, more than double the rate of the '70s and '80s. Under Commerce's new math, the figure for the '90s will be only 1.4% -- now nearly identical to prior eras.