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To: yard_man who wrote (3981)	4/8/2004 6:28:33 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 116555

In response to this statement you wrote: "We need to let markets work and stop the meddling." In fact, Laissez Faire capitalism has three main flaws: 1) It concentrates wealth in the hands of a few. This eventually is self defeating and lowers aggregate demand. Right now our fiscal policy is exacerbating this problem. 2) It can be in equilibrium at any level of unemployment. This is socially unacceptable (if the unemployment level is too high) and can lead to hidden costs associated with high crime or social unrest. 3) It ignores the costs of common assets like water and air ("Tragedy of the Commons") Therefore, we MUST meddle. We must meddle if unemployment gets too high. We must meddle if wealth distribution becomes too distorted (by shifting the tax burden more towards the higher income individuals). And we must meddle to protect our common resources. BTW, I am a small government, free market, capitalist. It helps to understand and correct the flaws rather than ignore them and allow them to fester.

To: yard_man who wrote (3981)	4/8/2004 7:01:22 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

From Federal Reserve Board Vice Chairman Roger Ferguson WASHINGTON (CBS.MW) - Interest rates in the United States will rise from their 45-year lows only when the economy is closer to full-speed ahead, Federal Reserve Board Vice Chairman Roger Ferguson said Thursday. "Interest rates will rise from their current low level only when the economic expansion is on more solid footing," Ferguson said in a luncheon speech to community leaders in San Francisco, Calif. Ferguson said the economy "appears to be engaged in a gradual process of recovery" but two main risks remain: a continuation of a labor market performing below expectations and the possibility that over-extended households could pull the rug out from under the recovery. "The evidence suggests that while neither risk can be ruled out, nor is either likely to come about," Ferguson said. ========================================================== This actually makes good sense to me. Yes, they are hoping for a miracle here as a result of failed policy, but what else do you want then to say or do? Mish