by Robert Reich

Tom Paine

04/07/05

Just 110,000 jobs were added in March -- not nearly enough even to keep up with population growth. Meanwhile, the wages and benefits of non-supervisory workers -- about 80 percent of the American workforce -- continue to drop, in real terms. This is unusual for this stage of a so-called recovery. What's going on? Blame higher interest rates.

... The Fed continues to raise them in order to prevent an outbreak of inflation. But the Fed is fighting a ghost. Inflation is in no danger of getting out of control. Greenspan worries that the huge federal budget deficit will bring on inflation. That may be something to worry about over the long term. But right now, ... the Fed's war against inflation is a pre-emptive one. [They want] to tackle inflation before inflation becomes a problem to be tackled. That might be okay, except that this pre-emptive war is imposing a huge toll -- especially on the nation's poor...

http://www.tompaine.com/articles/drafted_for_the_inflation_battle.php?dateid=20050408


Informant: Thomas L. Knapp