On Sep 3, 2007, at 2:12 PM, Eugene Coyle wrote:
The FED and its constituency, no more able to think outside its preconceptions than we are, blamed inflation on workers demanding too much, hence the mantra was "Let's throw another million out of work."
Well, yeah. This is straight out of Kalecki, too: if the unemployment rate gets too low, the balance of power will shift toward labor and away from capital. The Fed (why the caps? it's not an acronym) can think in clear class struggle terms, even if "progressive economists" can't.
They believed in the aggregate U-shaped cost curve, despite all evidence that the aggregate cost curve was flat -- flat until some as yet un-experienced level. As an aside, I think Henwood has internalized that belief which is why he always jumps into the fray on PEN=L at the appropriate moment, pointing out that that the national capacity utilization rate had reached some astonishingly high level of, say, 81.6 percent, or worse, 82.6 percent.
Let's take it up to 105%! Not sure what your point is here, though I'm sure you have one. Doug
