At 9:24 AM 1/30/95, Michael Perelman wrote: >High capacity utilization may have been associated with inflation in the >past. > >Some recent studies by Fed economists suggest that this association will >continue. I do not believe it for two reasons. > >1. We do not have very good measures of CU. No, but the best we have show tightness. Employment/pop ratios also show tight labor markets. > >2. CU causes nothing. It is only associated with higher employment which >... > >Today, labor is in surplus. Jobs are shifted abroad. Goods are imported >more easily. And certainly, the legal structure will continue to work >against workers in the near future. That all may be, but from the point of view of inflationphobes it's irrelevant. The danger of rising prices is there, and policy must squash it. >Boy, Mr. Henwood is really going conventional on us. Hey I don't make the news, I just report it. This is the way powerful interests feel, and from *their class point of view they are right.* Is that conventional? I thought it was more in the Marxian spirit, to describe capitalism as it is, not as we would like it to be. Doug -- Doug Henwood [[EMAIL PROTECTED]] Left Business Observer 250 W 85 St New York NY 10024-3217 USA 212-874-4020 voice 212-874-3137 fax
