To: Jim McMannis who wrote (48270 ) 7/30/2000 5:45:15 AM From: John F. Dowd Read Replies (5) | Respond to JMM: Lettuce at my supermarket is still 99 cents a head . Remember that is after being shipped by fossil fuel burning trains or trucks across the US. Your argument about energy is incorrect. Although energy costs are indeed going up they tend to drain $$ from the system by acting as a tax (fiscal restraint) and diminishing consumer spending. Stock market profits?? Good for you but I haven't seen any this year - NAZ is down 9% from January. Labor shortage? Reread my post citing mammoth layoffs taking place beginning with B of A laying off 10,000. Home Capital Gains Abatement? When people sell homes they usually buy new ones which results in the recycling of $$ from real property A to a different real property B. This has little to no effect on inflation other than the fortuitous effect that the capital gains that would have gone to the government and therefore to government employees to spend in the non durable consumables area has gone back into a durable good (a home) and actually provides little to no inflationary pressure. There has never been any need to hike interest rates and the inverted yield curve is screaming that at the Fed. In case you don't understand there is no inflation penalty for longer maturities - no it is quite to the contrary. In fact we could get along quite well without the Fed finagling. AG controlling inflation through his monetary machinations is like me controlling the advance of aliens in Maine by snapping my fingers and whirling a dead cat over my head. We both can claim success while scaring those watching us. We have had 4 or 5 interest rate hikes and the economy is still humming along and there is no significant if any inflation to be found. Contractors margins? My carpenters over the last three years haven't changed there prices more than 3% if at all. You Jim must be some kind of victim. On the labor front, I don't think it is wrong for an employee to expect a 3% wage increase per year especially when the GDP is growing much faster and commodity prices (ex oil- cartel driven) are holding steady or decreasing. Look at the following and think again. Yes the economy is growing at a nice clip but there is no inflation. Conclusion: AG keep your hands and mouth off the economy and its markets as you don't understand it-Keynes and the Phillip's curve are dead.Dow Jones Business News
