On Sep 3, 2007, at 6:57 PM, Jim Devine wrote:
I think that it could be that AG decided to allow the economy to produce lower U rates (1) because the federal government was running surpluses -- which AG loves -- and (2) because of the "trauma" that workers were suffering (see Michael P's post below): all else constant, any given U rate had more "oomph" in preventing inflation during the 1990s than in the 1970s, because the cost of job loss had risen.
AG also believed in the productivity revolution, driven by IT and free markets, so that provided some space for wage increases, which he allowed. Doug
