CB,..Re:.Higher Interest Rates are the Cause, then the Symptom of Inflation,
Look at the GDP chart below and please notice that during periods of high output corresponding interest rates. For instance, during mid '74 to mid '79, GDP exceeded 5%; however, interest rates, (10 yr treasury) for the same time period were in the 7 to 9% range and rising.
stls.frb.org
Real Gross Domestic Product
stls.frb.org
Interest rates
For the same time period, Fed Funds rates were all over the place from 12% to 4 2/3%.
stls.frb.org
Fed funds - historical
So I'm not sure about your theory regarding rates. If you compare other periods of healthy GDP, you might find that rates were also higher than current, for instance in 1984.
Re:.Greenspan's policy are simply wrong for America and for the Market. Liquidity and lower interest rates are the answer
I think you might be misinformed about Fed policy also. These are not "Greenspan's" personal policies but a complicated assemblage of econometric models which are supported by years and years of empirical data.
Re:.Competition creates productivity, higher supply, lower prices, and with greater wealth, consumption that means demand, not exceeding it, as more productivity from high technology in a FREE MARKET competes to supply that demand at the lowest price and highest quality.
Finally, in order for you to understand that there are physical constraints to unlimited growth, please observe in the chart below, that for 4.2% unemployment, that the labor force participation is almost equivalent to the bodies available for employment.
stls.frb.org
Unemployment, Labor Force Participation and Employment Rates
Also, please notice in the capacity utilization graph, that although we have some remaining capacity, we are at relatively high levels. If you compare this graph with the GDP graph you'll find that in periods of high output, capacity utilization has been highest.
stls.frb.org
Output per hour and Manufacturing Capacity Utilization.
bog.frb.fed.us
current cap. util. = 80.7% (notice durable goods production in bottom graphs)
For instance, in 1988 when GDP was close to 5%, cap util got up to 85.1%, (Dec.). I can link further tables for historical data if you want additional evidence, but you'll have to convert the raw numbers to per unit data. <g>
| Q1 Q2 Q3 Q4| Annual
1988 | 83.0 83.5 83.9 84.7 | 83.8
1989 | 85.1 84.4 82.9 82.1 | 83.6
Re:.Greenspan's thinking is just how the US lost its steel mills, auto industry, televisions, computers, and computer chip industry....now he is after internets.
I think you really need to educate yourself on "Greenspan's thinking" by reading some or all of his speeches. Otherwise you might come across as 'uninformed'.
Cheers,
Lee
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