>
> Is this Black hole a metaphor , or is it mathematically exact analogy ?
>
> CB
In either the July or August Federal Reserve Bulletin, they do sound pretty
scared about the trade deficit. Also the latest issue of Foreign Policy has
a piece by Martin Wold titled "The Mother of All Meltdowns"
http://foreignpolicy.com [the essay ain't on the site unfortunately]. Also,
does the Krueger report go into the whole ergonomics controversy over carpal
tunnel and repetitive strains [litigation that was first broughtforward by a
NYTimes writer if I recall correctly]?
Ian
==============
> __The current account deficit -- the broadest measure of the U.S.
> trade gap
> -- hit yet another record high last quarter. But there is little evidence
> so far that it is hurting the U.S. economy or the dollar, according to The
> Wall Street Journal (page A2). The Labor Department said that over-all
> import prices climbed 0.2 percent in August, after remaining unchanged in
> July. The price of petroleum imports rose a moderate 0.6 percent
> in August,
> after dropping 1.6 percent in July and soaring 10.6 percent in June.
> __Lurking in the middle of an otherwise perfect American economy
> is a black
> hole in the form of an enormous trade deficit -- more than $400 billion (4
> percent of the gross domestic product) and still rising, as the Commerce
> Department reports. In astrophysics, a black hole sucks everything,
> including light, into them, and nothing ever gets out. Everyone
> -- from Fed
> Chairman Alan Greenspan to public and private analysts in the rest of the
> world -- worries that, like a real black hole, the trade deficit
> will cause
> America's current economic success to simply disappear. In fact, Congress
> is so worried that it established a U.S. Trade Deficit Review
> Commission to
> investigate the dangers and how they might be avoided. The commission
>
> >>> [EMAIL PROTECTED] 09/18/00 03:33PM >>>
> BLS DAILY REPORT, THURSDAY, SEPTEMBER 14, 2000:
>
> Today's News Release: "Producer Price Indexes -- August 2000", indicates
> that the Producer Price Index for Finished Goods decreased 0.2 percent in
> August, seasonally adjusted. This index showed no change in July and
> increased 0.6 percent in June. The index for finished goods other than
> foods and energy edged up 0.1 percent in August, the same rate as in July.
> Prices received by manufacturers of intermediate goods fell 0.2 percent,
> following a 0.2 percent advance a month earlier. The crude goods index
> decreased 1.5 percent, after falling 1.1 percent in July.
>
> With little fanfare, the workplace has become a safer place to be, writes
> Alan B. Krueger, Bendheim Professor of Economics and Public Affairs at
> Princeton University, writing the "Economic Scene" in The New York Times
> (page C2). Since 1992, the number of work-related injuries and illnesses
> has fallen 25 percent, to 6.7 per 100 full-time workers from 8.9. This
> unexpected improvement translates to at least a $125 billion
> annual lift for
> the economy. The decline in injuries is remarkable because it reverses a
> historical pattern discovered by Robert S. Smith of Cornell in 1972:
> Injuries usually rise when unemployment falls because work intensity
> increases and many inexperienced workers are hired. Yet the
> tightest labor
> market in a generation has coincided with the lowest work-related
> injury and
> illness rate since the Bureau of Labor Statistics started
> tracking it. The
> decline does not appear to be a mere reporting phenomenon.
> Although studies
> have found that employers tend to under report injuries about 10 percent,
> the under reporting appears constant over time. Also, the Bureau of Labor
> Statistics' Census of Fatal Occupational Injuries -- which are unlikely to
> be underreported -- indicates a 13 percent drop in the fatality rate since
> 1992. In response to escalating costs, some states tightened eligibility
> standards for benefits and restricted employees' choice of
> medical providers
> in the 1990's. But a new study by Leslie Boden of Boston University and
> John Ruser of the Bureau of Labor Statistics suggests that only a small
> share of the decline in injuries and illnesses can be traced to these
> factors. Probably a more important effect of ballooning workers'
> compensation insurance costs is that many managers recognized that
> occupational injuries had a significant effect on the bottom
> line. Instead
> of viewing injury costs as unavoidable, they developed safety programs to
> cut risks. The 1990's investment boom in new and safety plants and
> equipment probably abetted this effort.
>
> The United States current account deficit the broadest measure of foreign
> trade, widened to a record in the second quarter as imports outpaced
> exports, the Commerce Department says. The deficit rose 4.6 percent, to
> $106.14 billion in the second quarter, surpassing the earlier record of
> $101.51 billion set in the previous quarter. The widening was driven
> primarily by a rise in the deficit for goods. Earlier, the Labor
> Department
> said import prices in August rose a modest 0.2 percent (The New
> York Times,
> in a Reuters dispatch, page C2).
> __The current account deficit -- the broadest measure of the U.S.
> trade gap
> -- hit yet another record high last quarter. But there is little evidence
> so far that it is hurting the U.S. economy or the dollar, according to The
> Wall Street Journal (page A2). The Labor Department said that over-all
> import prices climbed 0.2 percent in August, after remaining unchanged in
> July. The price of petroleum imports rose a moderate 0.6 percent
> in August,
> after dropping 1.6 percent in July and soaring 10.6 percent in June.
> __Lurking in the middle of an otherwise perfect American economy
> is a black
> hole in the form of an enormous trade deficit -- more than $400 billion (4
> percent of the gross domestic product) and still rising, as the Commerce
> Department reports. In astrophysics, a black hole sucks everything,
> including light, into them, and nothing ever gets out. Everyone
> -- from Fed
> Chairman Alan Greenspan to public and private analysts in the rest of the
> world -- worries that, like a real black hole, the trade deficit
> will cause
> America's current economic success to simply disappear. In fact, Congress
> is so worried that it established a U.S. Trade Deficit Review
> Commission to
> investigate the dangers and how they might be avoided. The
> commission -- I
> am one of the 12 members -- is to report shortly before this fall's
> presidential election, writes Lester C. Thurow, a professor and
> former dean
> of MIT's Sloan School of Management in USA Today (page 27A). For
> all of the
> worry, though, the U.S. has been running trade deficits for more than 20
> years without being sucked into a black hole -- and could for another 20
> years. The sequence of how the trade deficit would destroy America's
> current prosperity is well known. Foreign lenders who feared a future
> decline in the value of the dollar would decide to withdraw their
> funds from
> the U.S. In addition to U.S. investors, average American consumers would
> see large increases in the prices of imported goods. The drop in
> purchasing
> power would be compounded by a direct fall in Americans' dollar earnings.
> Unemployment would skyrocket, because the Fed would have to raise interest
> rates to levels so high that they would induce a sharp U.S. recession.
> Could it happen? If you're an optimist, the answer is "no". Pessimists
> point out that a constant trade deficit requires ever-larger
> flows of funds
> from abroad. Eventually, the sums that have to be paid simply are larger
> than the sums that the rest of the world is willing to invest in the U.S.
> The bottom line is uncertainty. No one knows whether the financial black
> hole actually exists.
>
