Unlike the post-depression generation of US economists, recent generations of economists have been indoctrinated with confidence in business. They believe that business knows best and that the free market will prevent or correct any mistakes. Many economists today are well paid shills for special interests. Others, simply careless, have assumed that statistical measures of high rates of US productivity and GDP growth were indications of the benefits that offshoring was bringing to Americans.
Only a few economists, such as myself and Charles McMillion, noticed the inconsistency between alleged high rates of productivity and GDP growth on one hand and stagnant real median incomes and rising income inequality on the other. Somehow the US economy was having GDP and productivity growth that was not showing up in growth in the incomes of Americans.
Thanks to economist Susan N. Houseman and the March 22 issue of Business Week, we now know, as I reported in the print edition of CounterPunch (June 1-15, 2007) and on online at vdare.com, that much of the growth in US productivity and GDP was an illusion created by statistics that mistakenly attributed productivity gains achieved abroad to the US economy.