<machine seizes a bearing> In his speeches,
Greenspan seems mainly concerned with wage
inflation. I have not even had econ 101, but
my guess is that what seizes things up is
the wealth effect allowing the most productive
members of the work force the ability to drop
out, retire early, etc. But I don't feel
really good about my theory--so many folks
just turn around and start their fantasy
business etc. Take me for instance, suppose
I load the boat on one stock and get lucky
(not likey, but nearly happened once, ooof)
I'd be out of the Weather Bureau so fast and
starting my own company it would make my head
spin. So the wealth effect can lead to an
increase in productivity, hmmm, now I'm going
around in circles.
Consumer spending: I wonder if that part of the
equation hasn't been overstated. The average
consumer is always tapped out, he spends all
he has on cigs, booze, and a new pickup every
five years. I think that is pretty constant, how
do you slow that consumption down? And yet we
know that there are economic cycles, with the
Fed ever pretending that they run the show--but
I think it hasn't an awful lot to do with the
consumer. |
