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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (3188)	10/18/2001 12:56:27 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

To:ahhaha who wrote (2637) From: ahhaha Monday, Jul 2, 2001 10:47 PM View Replies (1) \| Respond to of 3190 I made an earlier comment which must be repeated because of its importance: During the '80s it was stated by the FED that their only commission is price stability. Congress forced them into the concession of employment. That concession undermines price stability, since they must pump in excess of non-inflationary output to maintain full employment. The marginal worker always costs more than the average one, and so the average one will sue for a wage higher than the price of the output from the marginal worker. This is the essence of what drives ever rising price. Monetary authority sooner or later has to disemploy the marginal worker. The longer the monetary authority waits, the greater is the ensuing price increase. The statement in bold is extremely important to understand. To a certain extent it seems like a revival of Phillips' Curve theory. It isn't. The difference is in the subtlety of average labor cost to marginal labor cost. The average laborer responds to increased compensation to the marginal laborer by raising demands. It isn't a matter of envy. It is a matter of pride and of self worth. Monetary authority must provide a level of prosperity maintaining the compensation of the marginal worker. The average worker must strike to raise their compensation because the prosperity undermines the average worker's growth of compensation through inflation. The marginal worker is protected because the average demand they experience is artificially propped by monetary authority, but the stimulus doesn't provide the same degree of prop to the average worker because the demand they experience is relatively less. It's like an employer keeping the low cost employees and dumping a lot of the higher cost ones even though the higher cost ones are worth it. It's like baseball's salary cap. From a macro economic standpoint the monetary authority takes actions which undermine the very thing they seek to do, and so the rational right action is the wrong one. All the right actions lead to a bad outcome. This is very difficult to understand and it is why bear markets evolve naturally from the best of intentions.

To: ahhaha who wrote (3188)	10/18/2001 1:36:36 PM
From: KailuaBoy	Read Replies (2) \| Respond to of 24758

So much for hard times. The workers of the transit system in the SF Bay Area, BART, are contemplating a strike. The average BART worker receives $77,500 per year with full benefits and other perks. They're striking to get 22% raise over the next 4 years with increased benefits. Can someone explain how this isn't inflationary? Bad example. You know as well as I do that the Bay Area is not representative of anything other than the Bay Area. What other community would harbor Berkeley? Were you in attendance earlier this week when they declared that the proper course of action for the US is not to attack, but rather to file a lawsuit against the Taliban in an international court. Did you lead the Give Peace a Chance closing song? KB