From Forbes:
Fact and Comment
Steve Forbes, Forbes Magazine, 09.03.01, 12:00 AM ET
UNINDICTED ANTAGONIST
The Bush Administration recently announced that it is seeking quotas on foreign steel imports, arguing that foreign producers are selling their steel below real costs.
Quotas, long term, won't save steel industry jobs, which have been declining for decades as productivity has risen. Moreover, quotas will impose higher prices on steel-using industries, which employ 40 times as many people as do U.S. steel mills.
But the real villain here is not price-cutting importers but the Federal Reserve-induced deflation the Fed inadvertently began nearly four years ago. Despite rate cuts, the Fed still isn't pumping enough liquidity into our economy. That's why commodity prices, including steel, have been in the cellar since the late 1990s. The Dow Jones-AIG Commodity Index has slumped more than 40% since the Fed deflation began, and steel--down 40%--has been no exception. After all, before the deflation hit, U.S. steel mills were doing rather well. In 1998 most steel companies were profitable; shipments were about the highest they'd been in 20 years.
Steelers' ire should be directed at the misbegotten policies of Alan Greenspan & Co. rather than at their foreign competitors.
forbes.com
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For The Economy, Waiting Is The Hardest Part
Mark Lewis, Forbes.com, 08.22.01, 1:11 PM ET
NEW YORK - Do rate cuts matter? The Federal Reserve keeps cutting short-term interest rates, but businesses stubbornly refuse to take the bait and increase their capital spending. As a result, some on Wall Street are losing faith in the Fed's approach.
Investors should remember that a watched pot never boils, even when Alan Greenspan is turning up the heat. The economy may already be responding to the Fed's rate cut regimen, but the bottom line is that it's too soon to tell, and there's nothing investors can do about it except wait.
forbes.com
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Body Count Update: Aug. 22, 2001
599,601
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