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Politics : Ask Michael Burke

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To: BGR who wrote (48492)	2/23/1999 4:56:00 PM
From: yard_man	Read Replies (1) of 132070

You argue from effect for the most part ... Re productivity gains: Productivity gains are very narrow --- high tech outfits are better at producing high tech using high tech -- some fat has been cut in some areas as well ... such gains are not only overstated, but there is a real problem in that people have extrapolated such one time percieved productivity gains indefinitely in to the future ... The seeds of deflation are malinvestment (especially over-investment) brought on by easy money -- the seeds of this were sown many moons ago in the US -- the bubble is not the problem (it is a symptom), it is the underlying distortions brought on by an easy money policy Your solution and Greenspan's (just add liquidity when capital asset values start to decline or credit spreads tighten) does not provide for the natural adjustment that needs to take place for there to be a sustainable period of growth ... The Fed is hypocritical in the extreme when it has criticized the practices in the Asian tigers, for the Fed actually had a hand in fomenting what happened over there.

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