Need opinions on this
There's another force constraining inflation. Some 25 percent of American business is now subject to foreign competition. Raise your prices too far, and you lose customers to nimble competitors. Just ask Ford Motor Co. or Compaq Computer, which have had to cut prices lately.
Greenspan's defenders say that pushing the unemployment rate below its current level, 5.6 percent, would cause labor shortages and trigger the old wage-price spiral. But the nation's unemployment rate has been under 6 percent since September 1994, and last year employment costs rose at the slowest pace on record.
At its next meeting, May 21, the Fed's Open Market Committee should consider a small cut in interest rates to see if this economy can't grow at 2.5 or even 3 percent. The inflation hawks say wait and see, inflation isn't dead. They might be right. But the Fed has held inflation under 3 percent for four consecutive years of modest growth, and American workers are still waiting for a raise. Wait-and-see is no longer the right advice.
With my current custom title, how convincing was all that crap?
Email This To a Friend
Topic Commands
Click to receive email notification of replies 
Click to stop receiving email notification of replies