Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is.    The Honorable Governor of Texas, George W. Bush

I hate quotations. Tell me what you know.    Ralph Waldo Emerson

Sunday, October 03, 2004

Back to the Future

Let's start with some things from the past. This first was written one unemployed morning after having watched Mr. Greenspan deliver his death knoll on the bubble.

August 1, 1999

It's not at all a new notion that the rich get richer and the poor get poorer, this is a fact that will always be. A more appropriate choice of terms in our economy would be that the owners get richer and the workers get poorer.
The truth is that each deserves what they get.
The owners of America, major and minor alike, are for the most part clever people who work hard to position themselves to take advantage of a powerful capitalistic system. There is nothing evil in this.
And the workers? Oh, we make it so easy! We are as disorganized as they are organized. We are as uneducated about economics as they are educated. We are as innattentive to government as they are attentive.
And so, following a few short years in which they have seen their wealth double, it appears that they need all of us to continue growth. Nearly full employment leads to better wages. Employment costs, as measured by that government we don't pay any attention to, increased 1.1% over the second quarter of 1999, the biggest increase in eight years. Most of that likely went to doctors, lawyers and the government, but that's another issue.
The point is that those costs pass to the consumer, they do not come from profits that create soaring stock evaluations. This means inflation fears, and the feds step in and raise interest rates.
The feds' goal, and we give them no need to be subtle, is to nip wage increase in the bud by tossing some of us out of work. A 4% annual wage increase is intolerable. Business will have to cool their heels for a while until that number is seen to decrease.
When things quiet down, maybe they can double their money again.


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